You have a new product or service to launch. But you and your product are unknown. How do you get those early adopters? How do you turn those early adopters into more market share?
Andrew Chen's new book "The Cold Start Problem" aims to explain how to start, grow, and defend successful businesses.
It's hard to gain momentum when there are no existing users, just like starting a cold car engine.
And if you don't solve the cold start issue quickly, your new product may die.
“A network effect occurs when a product's value increases as more people use it,” Chen writes. Consider a dating site with only a few members. Users and site owners alike gain value as the site's membership grows.
Many dominant businesses began serving niche markets, or “atomic networks,” as Chen puts it. In 1958, Bank of America issued its first credit card to 60,000 residents of Fresno, California. Tinder and Facebook both began in a single college town before spreading.
Conversely, Google launched its failed Google+ social network with a mass-market launch rather than a successful atomic launch.
Your product's first atomic network may be smaller and more specific than you think.
Determine who you want to be your first customers and then find a way to get them on board. To get college fraternity and sorority members to use the app, Tinder threw big parties. Uber offered generous bonuses and financial incentives to its first drivers in specific areas.
It should be simple enough that anyone can understand it right away, says Chen. It should also bring together a rich, complex, infinite network of users that competitors cannot duplicate.” Zoom, with its easy-to-use interface and freemium model, encourages new users.
The creators of a product can then expand it to adjacent markets, such as other demographics or locations, until it reaches a tipping point and is deemed a success.
Andrew Chen's new book "The Cold Start Problem" aims to explain how to start, grow, and defend successful businesses.
It's hard to gain momentum when there are no existing users, just like starting a cold car engine.
And if you don't solve the cold start issue quickly, your new product may die.
“A network effect occurs when a product's value increases as more people use it,” Chen writes. Consider a dating site with only a few members. Users and site owners alike gain value as the site's membership grows.
Many dominant businesses began serving niche markets, or “atomic networks,” as Chen puts it. In 1958, Bank of America issued its first credit card to 60,000 residents of Fresno, California. Tinder and Facebook both began in a single college town before spreading.
Conversely, Google launched its failed Google+ social network with a mass-market launch rather than a successful atomic launch.
Your product's first atomic network may be smaller and more specific than you think.
Determine who you want to be your first customers and then find a way to get them on board. To get college fraternity and sorority members to use the app, Tinder threw big parties. Uber offered generous bonuses and financial incentives to its first drivers in specific areas.
It should be simple enough that anyone can understand it right away, says Chen. It should also bring together a rich, complex, infinite network of users that competitors cannot duplicate.” Zoom, with its easy-to-use interface and freemium model, encourages new users.
The creators of a product can then expand it to adjacent markets, such as other demographics or locations, until it reaches a tipping point and is deemed a success.
