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

Invite-only

Come for the tool, stay for the network

Paying for launch

Flinstoning

Escape Velocity

The Ceiling

Saturation

Reduced marketing efficiency

The Moat

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store