The Cold Start Problem: Using Network Effects To Scale Your Product

Description

A transformative guide to growing any business, from one of Silicon Valley s most esteemed investors

Financial Times Business Book of the Month

A true Silicon Valley insider Wired

Why do some products take off? And what can we learn from them?

The hardest part of launching a product is getting started. When you have just an idea and a handful of customers, growth can feel impossible. This is the cold start problem.

Andrew Chen has a solution. As a partner at the pre-eminent VC firm Andreesen Horowitz, he has invested in some of the world s fastest-growing companies. Along the way, he s become one of the most renowned bloggers in tech - hailed by Wired as a true Silicon Valley insider .

Now, Chen reveals how any organisation can surmount the cold start problem. His solution lies in the network effect: the way a service improves as more people sign up. It means that today s leading products - from Wikipedia to to WhatsApp - get more powerful with every additional user.

Drawing on interviews with the founders of LinkedIn, Zoom, Uber, Dropbox, Tinder, Airbnb and more, Chen unpicks how to start and scale these network effects. He reveals how to build an atomic network that is just big enough to sustain itself. He uncovers how to spot the tipping point after which growth takes care of itself. And he explores why some big companies manage to sustain viral network effects for years (while others quickly stop growing).

The result is a one-stop guide to scaling a product, road-tested at some of the world s most valuable companies.

Praise for Andrew Chen

Andrew s blog is an inexhaustible source of numbers and ideas on concepts that matter Max Levchin, co-founder of PayPal

Here s one message you want. Chen s weekly newsletter offers thoughtful essays on startups and marketing Wired

One of the best entrepreneurship blogs of all time Eric Ries, author of The Lean Startup

About the Author

Andrew Chen is best known for his newsletter on tech and business, whose 200,000 followers include many of the most notable founders in Silicon Valley. He is currently a general partner at Andreessen Horowitz, the startup investor behind Twitter, Airbnb, Github, Lyft, Reddit and Skype. He was formerly head of rider growth at Uber, where he oversaw an increase from 15 million to 100 million active users of the platform.