Chen's Cold Start Theory helps in understanding network effects by providing a framework to understand the stages of growth in a network. It starts with the 'cold start problem', which is the initial challenge of attracting users to a new network. The 'tipping point' is when the network starts to grow rapidly due to the value it provides to its users. 'Escape velocity' is the stage where the network's growth is self-sustaining. 'Hitting the ceiling' is when the network's growth starts to slow down, and 'the moat' is the final stage where the network has a strong user base that is hard for competitors to penetrate.
When a networked product launches, it faces a chicken-and-egg problem: people need to use it for it...
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