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

by Andrew Chen

For the most part, this concentration is the result of healthy loops that drive a network toward higher quality. A good content creator gets likes, shares, and follows, and features like algorithmic feeds will distribute their content even more widely. A bad creator gets none of that boost, and will lower their engagement level into just being a passive viewer, or just churn. A good team organizer will create projects, post new content, and invite coworkers into workspaces that stay active. A bad one will create projects that don’t pick up engagement, and they will eventually churn or their peers will pick up where they left off. A good restaurant on a food-delivery platform will get five-star reviews and eventually generate enough money to help them invest in a specialized kitchen for delivery, and expand into more markets. A bad restaurant will get bad reviews and eventually shut or churn. All of these feedback loops create more concentration within a small number of players, but to the benefit of the entire network.