Book summary: The Cold Start Problem

Using network effects to scale your product

1 Paragraph Summary

  1. The Cold Start Problem — how do you build a first, small network with enough users to make the product valuable?
  2. Tipping Point — once you have built this first network each subsequent network gets a little easier.
  3. Escape Velocity — once scale is hit quickly three complementary advantages come into play: low cost user acquisition through networks, high engagement as the network is so robust & improved economics as the network grows.
  4. Hitting the Ceiling — something happens which stalls growth, this may be saturation, scams or something else entirely. Products must adjust to respond and to overcome this.
  5. The Moat — a strong, established network becomes a strong moat over time.
See, it’s simple!

The Cold Start Problem

The atomic network

The hard side

  • 1% of users create content
  • 10% actively engage with content (sharing, commenting etc)
  • The rest ‘lurk’ and get the benefits of these folks

The Tipping Point


Come for the tool, stay for the network

Paying for launch


Escape Velocity

The Ceiling


Reduced marketing efficiency

The Moat



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