Tonight I finished reading Andrew Chen's book The Cold Start Problem. And as someone who is on the product team of a startup I gained several applicable insights I'll be mulling over for the next bit.
One of the main key takeaways from this book is the subject of network effects, specifically an atomic network. The context of this network effect applies to a product that is being developed and the process in which potential users are beginning to use the product.
To unpack how users onboard a product there are various ways users can choose to use a product, two of which are either because their friends and family use it or because of media press hype around the product.
In his book, Chen states "To build a massive successful network effect, I argue that you must start with a smaller, atomic network. And use the success in the first set of networks to tip over the next set of small networks. I’m not convinced this step can be avoided."
What stood out to me is that organizations that skip the step of building that initial small atomic network tend to crash and burn overtime. A real life example of this is Facebook starting out with a small atomic network that grew other atomic networks that reached their tipping points and continued growing this massive network of engaged adopters. In contrast Google launched Google+ and acquired users who already were using Google products and also through press and media hype. The issue here is they failed to build from a small atomic network like Facebook did and although they had many users, there was a lack of engagement on the platform which led to its shutdown in 2019.
What Chen concludes the following failed to happen in Google's scenario "When networks are built bottom-up, they are more likely to be densely interconnected, and thus healthier and more engaged."
The density of the network and interconnectivity within it at adoption is often a good indicator of how well a product will do in the future. Look around at the Silicon Valley giants and their early day efforts. They had a solid focus on creating an atomic network effect which resulted in the leading tech giants we know today.
Here's a link to the title. Have any thoughts on the topic? I'd like to learn about them.