Two economists proved that hits–at least in show biz–were unpredictable. They plotted sales of first-run movies between May 1985 and January 1986 and discovered that “the only reliable predictor of a film’s box office was its performance the previous week. Nothing else seemed to matter–not the genre of the film, not its cast, not its budget.” The higher it was last week, the more likely it will be high this week–an increasing returns loop fed by word of mouth recommendations. The economists, Art De Vany and David Walls, claim these results mirror a heavy duty physics equation known as the Bose-Einstein distribution. The fact that the only variable that influenced the result was the result from the week before, means, they say, that “the film industry is a complex adaptive system poised between order and chaos.” In other words, it follows the logic of the net: increasing returns and persistent disequilibrium.

One final parable rooted in biology. In a pond one summer a floating lily leaf doubles in size every day until it covers the entire surface of water. The day before it completely covers the pond, the water is only half covered, and the day before that, only a quarter covered, and the day before that, only a measly eighth. While the lily grows imperceptibly all summer long, only in the last week of the cycle would most bystanders notice its “sudden” appearance. By then, it is far past the tipping point.

The network economy is like a lily pond. Most of the pond looks empty, but a few lilies are doubling in size. The web, for example, is a leaf doubling every six months. Despite the one million web sites to date, the web’s future has just begun. Other lily leaves are sprouting along the edges of the pond: MUDs, Irridium phones, wireless data ports, collaborative bots, WebTV, and remote solid state sensors. Right now, they are all just itsy-bitsy lily cells brewing at the beginning of a hot network summer. One by one, they will pass their tipping points, and suddenly become ubiquitous.

During the exponential gains peculiar to networks, compounding effects can pass a point of runaway growth. But it is before this point, before momentum builds, that one needs to pay attention.

Major U.S. retailers refused to pay attention to TV home-shopping networks during the 1980s because the number of people watching and buying from them was initially so small and marginalized that it did not meet the established level of retail significance. The largest U.S. retailers work in the realm of hundreds of millions. The first TV home shopping was dealing in the realm of thousands. Retailers discovered that shoppers would watch 50 hours of home-shopping programs before making their first purchase. The retailers considered this horrible news. But it turns out “watching others do it” was an initiation ritual. Shoppers trust other shoppers. Once shoppers were “invested” in the process by watching many others do it successfully, they kept coming back. So small numbers grew steadily and then rapidly as more shoppers brought in yet more shoppers. Instead of heeding the new subtle threshold of network economics, the retailers waited until the alarm of the tipping point sounded, which meant, by definition, that it was too late for them to cash in.

In epidemiology, the point at which a disease has infected enough hosts that it must be considered a raging epidemic can be thought of as the tipping point. The contagion’s momentum has tipped from pushing uphill against all odds to rolling downhill with all odds behind it. In biology, the tipping points of fatal diseases are fairly high, but in technology, they seem to be triggered at much lower points.

There has always been a tipping point in any business, industrial or network, after which success feeds upon itself. However, the low fixed costs, insignificant marginal costs, and rapid distribution that we find in the network economy depresses tipping points below the levels of industrial times; it is as if the new bugs are more contagious–and more potent. It takes a smaller initial pool to lead to runaway dominance, sooner.

Technology is no longer outside, no longer alien, no longer at the periphery. It is at the center of our lives. “Technology is the campfire around which we gather,” says musician/artist Laurie Anderson. For many decades high tech was marginal in presence. Then suddenly–blink–it is everywhere and all-important.

Technology has been able to infiltrate into our lives to the degree it has because it has become more like us. It’s become organic in structure. Because network technology behaves more like an organism than like a machine, biological metaphors are far more useful than mechanical ones in understanding how the network economy runs.

But if success follows a biological model, so does failure. A cautionary tale: One day, along the beach, tiny red algae suddenly blooms into a vast red tide. A few weeks later, just when the red mat seems indelible, it vanishes. Lemmings boom, then disappear as suddenly. The same biological forces that multiply populations can decimate them. The same forces that feed on one another to amplify network presences creating powerful standards overnight can also work in reverse to unravel them in a blink. The same forces that converge to build up organizations in so biological a fashion can also converge to tear them down. One can expect that when Microsoft’s fortunes falter, their profits will plunge in a curve inversely symmetrical to their success. All the self-reinforcing reasons to join a network’s success run in reverse when the success turns to failure and everyone wants to flee.

Here’s how this happened. Most of the technology in the early part of the century was relegated to the inside of a factory. Only businessmen cared about advancing technology–cheaper production methods or more specialized materials. The consumer products this advanced technology spun off into homes were, more often than not, labor-saving devices–sewing machines, vacuum cleaners, water pumps. They saved time, and thereby enhanced the prevailing culture. But the devices themselves (except for the automobile) were merely gadgets. They were technology–something foreign, best used in small doses, and clearly not the social and economic center of our lives. It was once very easy to ignore technology because it did not penetrate the areas of our lives we have always really cared about: our networks of friendship, writing, painting, cultural arts, relationships, self-identity, civil organizations, the nature of work, the acquisition of wealth, and power. But with the steady advent of technology into the networks of communication and transportation, technology has completely overwhelmed these social areas. Our social space has been invaded by the telegraph, the phonograph, the telephone, the photograph, the television, the airplane and car, then by the computer, and the internet, and now by the web.