I think the idea is to do whatever you can to get your product used by a lot of people in a small area (usually an offline community but can be a discrete online community too) rather than say the same number of people dispersed more broadly.
When you have a tighter group of people using a product you increase the chances they use it together or at least talk about the product together. And this increases likelihood people will stick with the product (their friends are buzzing about it too!) and beyond. this isn’t just software or network effects, it is even true for any brand — clothes, trying a new restaurant, etc. that all want to start by being buzzy within some community. Once you have that, you greatly increase the chances you can spread to other communities and can learn why and how to spread something faster. City by city rollout of some services is just one example of this method.