Metcalfe’s law

Metcalfe’s law is a principle in network theory that states that the value of a network is proportional to the square of the number of its users (or nodes). The more users that join a network, the number of potential connections between them increases exponentially, increasing the value of the network for each individual user.

This law underpins the economics of social networks, email, phone systems, and other network systems.

While Metcalfe’s law captures the exponential growth in value of network systems, it doesn’t account for negative effects of network growth, such as congestion of communication, decreasing quality of connections, and other negative externalities that can reduce the value of the network.

The same quadratic scaling appears as a cost rather than a benefit in team dynamics. The Mythical Man-Month observes that adding people to a project increases communication overhead roughly with the square of the team size, which is why adding manpower to a late project makes it later.