The Cold Start Problem: Using Network Effects to Scale Your Product

Of course he was talking about getting to product/market fit more generally, but for networked products, I would take this description and infuse it with network goodness—users are inviting other users, and sharing content from your product across the internet. You search on Twitter, Reddit, and other social media and it’s chock full of your loyal

Once you pass the Tipping Point, however, things start to work. Riders start getting cars in 15 minutes, and it becomes somewhat inconvenient but still usable. Get it down to 10 minutes or even 5 minutes, then it’s even better. The bigger the network of drivers, the more convenient it gets. The rideshare network in a city starts to see the classic

Driver referrals were typically structured as a give/get incentive—give $250 and get $250 when your friend signs up to drive.

The “effect” part of the network effect describes how value increases as more people start using the product. Sometimes the increasing value manifests as higher engagement, or faster growth.

The questions to ask are simple: First, does the product have a network? Does it connect people with each other, whether for commerce, collaboration, communication, or something else at the core of the experience?

You can always feel when product/market fit isn’t happening. The customers aren’t quite getting value out of the product, word of mouth isn’t spreading, usage isn’t growing that fast, press reviews are kind of “blah,” the sales cycle takes too long, and lots of deals never close. And you can always feel product/market fit when it’s happening. The c

When a new product carefully curates a network, followed by implementing invites so that it can copy and paste similar networks, then it can grow to take over the market.

The concept of atomic networks is powerful because if you can build one, you can probably build two. Each one often becomes easier, because each network can be intertwined with the next—Slack’s success within one company can help it become successful in another, as employees move about and introduce the product to new workplaces.

The technology product metaphor here is obvious—if a messaging app doesn’t have enough people in it, some users will delete it. And as the user base shrinks, it becomes more likely that each user will leave, ultimately causing inactivity and collapse of the network. This is what happened to MySpace as Facebook began to take away its users, or when