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They eschew a long list of features and instead emphasize the interactions among people using the app.
When the Cold Start Problem is solved, a product is able to consistently create “Magic Moments.” Users open the product and find a network that is built out, meaning they can generally find whoever and whatever they’re looking for.
Other categories like social networking and collaboration tools are the same, where just a handful of products have built audiences of over a billion users. Yet these categories remain attractive because they produce the most valuable companies in the world, and they shape the technology industry in which we live and work.
And how Slack users engage each other matters as well. It’s not enough to sign up, but they also need to be chatting away over time.
How many users does your network need before the product experience becomes good? The way to answer this is for companies to do an analysis on the size of their networks (on the X-axis) plotted against a set of important engagement metrics (on the Y-axis).
Users who come in with more friends have higher retention, so you want to maximize it, at least up to a point of diminishing returns.
The size of an initial network helps determine a launch strategy.
If you add more people, but add the wrong people, then it still won’t be enough. You need the right people on the network. Ten people using Slack all from the same team is better than ten random people in a larger company. Density and interconnectedness is key.
The solution to the Cold Start Problem starts by understanding how to add a small group of the right people, at the same time, using the product in the right way.
If you study the launch of products with network effects, you’ll see that one of the most common threads is that they often start small, in a single city, college campus, or in small beta tests at individual companies—like Slack’s story.
If you can create one stable, engaged network that can self-sustain—an atomic network—then likely you can build a second network adjacent to the first one. And if you can build 1, and then 2, you can probably build 10 or 100 networks.
The concept of an atomic network is immediately obvious here. Although Bank of America served all of California, they didn’t focus on trying to launch across the entire state at once, but rather, they focused on Fresno, a town where they had a high degree of penetration.
the “atomic network” is the smallest network needed that can stand on its own. It needs to have enough density and stability to break through early anti-network effects, and ultimately grow on its own.
The networked product should be launched in its simplest possible form—not fully featured—so that it has a dead simple value proposition.
And finally, the attitude in executing the launch should be “do whatever it takes”—even if it’s unscalable or unprofitable—to get momentum, without worrying about how to scale.
Each of these growth hacks gave an important, quick lift that established an atomic network, kicking off future growth.
Not only will the product initially look like a toy, but as a corollary to Disruption Theory, there is a huge benefit to picking a smaller and more targeted starting point.
Networked products often look like toys, and moreover, toys for a weird niche.
These erroneous predictions are understandable, because it’s hard for a product to resonate when its network doesn’t include you, your friends, or your colleagues.
Your product’s first atomic network is probably smaller and more specific than you think. Not a massive segment of users, or a particular customer segment, or a city, but instead something tiny, maybe on the order of hundreds of people, at a specific moment in time.
in the earliest days, the focus was on narrow, ephemeral moments—more like “5pm at the Caltrain station at 5th and King St.”
Years later, a company might talk about entire countries or mega-regions, like EMEA or APAC, but in the early days, it’s about something much more focused. It should be about building the smallest possible group.
—the language of launching new networks should be focused on groupings of a handful of people, with the right intent, in the right situation, at the right time.
If you need hundreds of users on the same platform at once, company-wide coordination is needed. In this situation, a top-down enterprise sale that gets a company to mandate usage for everyone might work better.
In the earlier example of Bank of America’s credit card launch, focusing on one city at a time made it more likely that customers would find local merchants that accepted this novel new method of payment. Contrast that to when you peanut-butter your efforts across a whole industry or geography—the active parts of the network rapidly dissipate as anti-network effects kick in, because a network of 1,000 random users of Slack will have less retention than 1,000 users all inside the same company.
there is a minority of users that create disproportionate value and as a result, have disproportionate power.
This the “hard side” of your network. They do more work and contribute more to your network, but are that much harder to acquire and retain.
But even in these cases, there are active, extroverted users who initiate conversations and organize get-togethers, and there are those who don’t.
When they work, they generate what academics often call “cross-side network effects”—when more users in one side of the network benefits the other side of the network.
Even though there are hundreds of millions of users, there are only about 100,000 active contributors per month, and when you look at the small group of writers who make more than 100+ edits in a month, it’s about 4,000 people.
As a ratio, it means that active contributors represent only 0.02% of the total viewer pool.
Steven Pruitt has made nearly 3 million edits on Wikipedia and written 35,000 original articles. It’s earned him not only accolades but almost legendary status on the internet.
Pulling from books, academic journals and other sources, he spends more than three hours a day researching, editing and writing.
And how much does he earn by doing this? Nothing. He’s a volunteer editor. While it might seem strange to some of us to spend hours per day writing on Wikipedia, when you look across user-generated products, this is actually the norm, not the exception.
Why is there a hard side at all? Hard sides exist because there are tasks in any networked product that just require more work, whether that’s selling products, organizing projects, or creating content.
Who is the hard side of your network, and how will they use the product? What is the unique value proposition to the hard side? (And in turn, the easy side of the network.)
Bradley Horowitz, now a vice president of product at Google, described the 1 percent of users who create versus everyone else:
1% of the user population might start a group (or a thread within a group) 10% of the user population might participate actively, and actually author content whether starting a thread or responding to a thread-in-progress
100% of the user population benefits from the activities of the a...
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For YouTube, Instagram, and other content-sharing platforms, there is a “power law” curve where the 20 percent of top influencers and content creators end up with the vast majority of engagement. They attract millions of followers, and make content that generates tens of millions of views.
Social media in its original construct is really about status, representing who you are, showing people that you’re cool, getting likes and comments. Those sorts of things. And that’s less accessible to the broad base of humanity, and has a narrower base of appeal. [There’s a] more limited frequency of engagement, because people only do some things that are cool once a week or once a month, and not every day.
In Spiegel’s pyramid, people have emotional needs—whether that’s self-expression, status, or communication—and create different forms of content to achieve them.
“If a piece of content was created, and no one saw it, would the creator be disappointed?” If the answer is yes, then social feedback is a key value. The combination of tools, aggregation of audience, and a networked product is what is needed to unlock the hard side of these networks—it’s all about the content creators.
It’s important to focus on this tiny slice of users so that messaging, product functionality, and business model are all aligned to serve them.
Social feedback, status, and other community dynamics encourage editors to keep creating content.
This provides status. They can make edits to correct others, which offers another form of status and satisfaction. There’s teamwork and a feeling of camaraderie, which create bonds that retain users over months and years. Steven
The answer is by building a product that solves an important need for the hard side.
The lesson is, unsurprisingly, that attractive people—particularly women—are the hard side of the online dating network.
Whereas men tend to swipe right (that is, to indicate interest) on about half of women’s profiles—about 45 percent to be exact—the ladies in the product swipe on only 5 percent of profiles they see.
The key insight in the stories of Homobiles or Tinder is—how do you find a problem where the hard side of a network is engaged, but their needs are unaddressed? The answer is to look at hobbies and side hustles.
