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

by Andrew Chen

Networked products are unique because they can embed their viral growth into the product experience itself. When a product like Dropbox has a built-in feature like folder sharing, it can spread on its own. PayPal’s badges and core user-to-user payments accomplishes the same. This is the Product/Network Duo at work again, where the product has features to attract people to the network, while the network brings more value to the product. Workplace collaboration products like Slack ask you to invite your colleagues into your chat, and photo-sharing apps like Instagram make it easy to invite and connect to your Facebook friends. They can tap into your phone’s contacts, integrate with your company’s internal employee directory, or tap into the sharing widgets built into your phone. This is software, not just building a buzzy, shareable video.