The Cold Start Problem: How to Start and Scale Network Effects

However, if for whatever reason the population of these social animals declines, the benefits can quickly go away, making them more susceptible to collapse. But if the population grows too quickly, and there are too many animals living in too small a space, then overpopulation negates their advantages—which

The Allee effect → The Network Effect Allee Threshold → Tipping Point Carrying capacity → Saturation

This is superior to a centralized PR-based launch, which can fizzle out and become diluted by different geographies, industries, and demographics. Invite-only mechanics amplify a networked product that is already useful for the first few dozen users.

In effect, a tool can be used to “prop up” the value of the network effects curve when the network is small.

Only three sourcing strategies account for every B2B company’s very early growth. [These are: Personal network, Seek out customers where they are, Get press.] Thus, your choices are easy, yet limited.

Importantly, he also advocates that B2B startups think about doing consulting to start, treating an initial set of customers as if they were consulting clients. By building the functionality they need on an ad hoc basis, and then generalizing, they have a better chance to hit product/market fit—even though this approach won’t scale.

Yet the track record speaks for itself—growth teams have emerged across the industry as a focused way to scale products toward Escape Velocity.

Content and communications might be a series of how-to videos teaching effective use of LinkedIn’s connection features. And an incentive might look like a free subscription when the user completes certain actions. A product road map can be generated with hundreds of these ideas, large and small, and then prioritized.

Networked products, on the other hand, have the unique capability to reactivate these users by enlisting active users to bring them back.