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

by Andrew Chen

To amplify the Engagement Effect as it relates to reactivation, the key question to ask is, what is the experience of a churned user? If you’re inactive, what kinds of notifications are you getting from other users, and are they compelling enough to bring you back? Almost always, churned users don’t receive any communication at all. You can boost reactivation success rate significantly just by sending a weekly digest of the activity in a user’s network, or “Your friend X just joined” notifications. The other question to ask is, if a user wants to reactivate, how hard is it? At Uber, we had a staggering statistic where several million users were failing their password recovery per week—how do you make this much easier, and treat reactivation with the same seriousness as the sign-up process? While reactivation is typically not a concern for new products—they should focus on new users, since their count of lapsed users won’t be large—for products that have hit Escape Velocity, there will be a pool of many millions of users to draw upon. Reengaging them can become as big a growth lever as acquiring new users.