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

Written by Andrew Chen

Narrated by Andrew Chen

A startup executive and investor draws on expertise developed at the premier venture capital firm Andreessen Horowitz and as an executive at Uber to address how tech’s most successful products have solved the dreaded ""cold start problem”—by leveraging network effects to launch and scale toward billions of users.

Although software has become easier to build, launching and scaling new products and services remains difficult. Startups face daunting challenges entering the technology ecosystem, including stiff competition, copycats, and ineffective marketing channels. Teams launching new products must consider the advantages of “the network effect,” where a product or service’s value increases as more users engage with it. Apple, Google, Microsoft, and other tech giants utilize network effects, and most tech products incorporate them, whether they’re messaging apps, workplace collaboration tools, or marketplaces. Network effects provide a path for fledgling products to break through, attracting new users through viral growth and word of mouth.

Yet most entrepreneurs lack the vocabulary and context to describe them—much less understand the fundamental principles that drive the effect. What exactly are network effects? How do teams create and build them into their products? How do products compete in a market where every player has them? Andrew Chen draws on his experience and on interviews with the CEOs and founding teams of LinkedIn, Twitch, Zoom, Dropbox, Tinder, Uber, Airbnb, and Pinterest to offer unique insights in answering these questions. Chen also provides practical frameworks and principles that can be applied across products and industries. 

The Cold Start Problem reveals what makes winning networks thrive, why some startups fail to successfully scale, and, most crucially, why products that create and compete using the network effect are vitally important today.

• Language: English
• Publisher: HarperAudio
• Release date: Dec 7, 2021
• ISBN: 9780062969767

Andrew Chen

Andrew Chen is a general partner at Andreessen Horowitz, investing in early-stage consumer startups. He is a board member of fast-growing startups like Substack, Clubhouse, Z League, All Day Kitchens, Sleeper, Maven, and Reforge, and previously led the rider growth teams at Uber during their high-growth, pre-IPO years. He has a popular professional blog, and has been featured in Wired, the Wall Street Journal, and the New York Times. He holds a BS in applied mathematics from the University of Washington, where he graduated at the age of nineteen. He splits his time between San Francisco and Los Angeles.

Reviews for The Cold Start Problem

[jgiera · Rating: 5 out of 5 stars]

A deep dive into startups growth via networks with examples and analysis of success factors.

[Edirin Aghoghovbia · Rating: 5 out of 5 stars]

Stellar content and case studies. Quite enjoyable to read too

[Princewill Ejirika · Rating: 5 out of 5 stars]

Great book to learn about how some of the biggest tech companies grew. Highly recommended for anyone working in Tech : product marketing, product management & growth marketing. Contains very good case studies on metwork effects, growth marketing & growth hacking.

[Radek Jezbera · Rating: 5 out of 5 stars]

Amazing book full of new concepts on how to build any multi-side businesses.

[JimmyJazz77 · Rating: 5 out of 5 stars]

Truly relevant book with lots of insights how to scale. The analysis how Google Plus failed to build strong network effects was highly relevant for me.

[Lennie · Rating: 5 out of 5 stars]

Simply AMAZING. TRANSFORMED MY THINKING AS A MARKETER IN THE TECH WORLD

[ghgvzxbsfy · Rating: 2 out of 5 stars]

This book had so much to offer in the math, science, and art of network products, the importance of networks in the success of products, and observations of patterns in atomic networks and networks of networks. By the end of the book I could predict each time a new person was going to be introduced that it was going to be a man. I don’t think any other women were mentioned in this book except Meg Whitman, CEO of eBay. The book was heavy on tech bros and bias towards Uber. I know the author worked at Uber, but I grew tired of that story weaved throughout the book. And the conclusion painted the picture that the founder of Uber was a regular founder when actually he was toxic and harmful to women in tech. I had dinner with the author Andrew in 2015 and we had great conversation; I really liked him and wanted to like this book. But by the end it was clear that Andrew’s network is deep with tech bros and that, as he said in the conclusion that those who enjoyed the success of Uber are the next founders, advisors, and investors of the next generation of companies, which perpetuate the problem of gender inequality in tech. It is well documented now, at the time of this book being written and published, how many women were harassed, mistreated, and pushed out of Uber because of its toxic culture. This book now also cements the history as being led by men, further reinforcing the gender bias in tech we see today.