A small business can use the Cold Start Problem to grow by focusing its resources to acquire a small network from another company. This strategy is often used by smaller companies to gain a foothold in the market. For example, Airbnb used this strategy to snatch Craigslist's shared-rooms idea and made an entire product with it. By the time Craigslist stopped Airbnb from its ability to redirect its users, Airbnb had already built its atomic network. This strategy allowed Airbnb to grow rapidly and establish itself in the market.

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The Cold Start Problem

When a networked product launches, it faces a chicken-and-egg problem: people need to use it for it to be worth anything. So how do you start the very...

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This is when a company, usually a smaller one, focuses its resources to acquire a small network from another company. An example is how Airbnb snatched Craigslist's shared-rooms idea and made an entire product with it. In this instance David (Airbnb) was the cherry picker; Goliath (Craigslist) couldn't defend all of his networks. By the time Craigslist stopped Airbnb from its ability to redirect its users, Airbnb had already built its atomic network.

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A traditional retail company can apply the innovative approaches discussed in the Cold Start Problem by focusing on building a small, dedicated customer base first. This can be achieved by offering unique products or services that are not readily available elsewhere. Once this small network is established, the company can then leverage it to attract more customers, similar to how Airbnb used Craigslist's shared-rooms idea to build its own network. The company can also use technology to enhance customer experience and streamline operations, thereby making its network more attractive to potential customers.

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