A startup executive and investor draws on expertise developed at the premier venture capital
firm Andreessen Horowitz and as an executive at Uber to address how tech's most successful
products have solved the dreaded cold start problem??by leveraging network effects to launch
and scale toward billions of users. Although software has become easier to build launching and
scaling new products and services remains difficult. Startups face daunting challenges entering
the technology ecosystem including stiff competition copycats and ineffective marketing
channels. Teams launching new products must consider the advantages of ?the network effect ?
where a product or service's value increases as more users engage with it. Apple Google
Microsoft and other tech giants utilize network effects and most tech products incorporate
them whether they're messaging apps workplace collaboration tools or marketplaces. Network
effects provide a path for fledgling products to break through attracting new users through
viral growth and word of mouth. Yet most entrepreneurs lack the vocabulary and context to
describe them?much less understand the fundamental principles that drive the effect. What
exactly are network effects? How do teams create and build them into their products? How do
products compete in a market where every player has them? Andrew Chen draws on his experience
and on interviews with the CEOs and founding teams of LinkedIn Twitch Zoom Dropbox Tinder
Uber Airbnb and Pinterest to offer unique insights in answering these questions. Chen also
provides practical frameworks and principles that can be applied across products and
industries. The Cold Start Problem reveals what makes winning networks thrive why some
startups fail to successfully scale and most crucially why products that create and compete
using the network effect are vitally important today.
