Book Summary | The Cold Start Problem — Andrew Chen

Much is said about network effects in the abstract. In The Cold Start Problem Andrew Chen takes a rigorous approach to analysing network effects — drawing on his experience as Head of Rider Growth at Uber, historical and present day examples as well as hundreds of interviews over 3 years of research. The book answers the question that is top of mind for founders and leaders at platform companies: how do you use network effects to scale your product?

Network Effects: A Primer

A network effect describes what happens when a product gets more valuable as more people use it. A networked product without a network is a useless thing — a telephone with no one to call, a ride sharing app with no drivers, a network of rooms to rent with no renters.

It’s harder now than ever to launch a product — the battle for attention is so fierce and the biggest winners crowd out the rest. This highlights the importance of network effects — you can copy all of Instagram’s features and you can leverage the same marketing channels but you can’t easily convince hundreds of millions of users to switch to your product.

Networked products started as a B2C phenomenon but increasingly there has been “consumerization” of B2B apps — with apps like Slack and Notion getting their start by gaining a…