A company in a traditional sector like manufacturing or retail can apply the principles of the Cold Start Theory by leveraging their existing resources and relationships. They can use their established product lines and manpower to create a network effect. They can also use their speed and lack of sacred cows to innovate and adapt quickly. For example, they can introduce new products or services that cater to a niche market, thereby creating a small but dedicated user base. This user base can then be expanded upon, using the network effect to attract more users. It's also important for these companies to navigate competition effectively, learning from the successes and failures of both larger and smaller companies.
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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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All companies in the same field have network effects—it's how you scale and leverage them that matters. Small companies have some advantages—namely speed, and a lack of sacred cows. Bigger ones have established relationships, manpower, and product lines to lean on. Small companies usurp bigger ones frequently (Facebook blew MySpace out of the water); big companies bat small ones away often (Airbnb swatted away copycat firm Wimdu). For bosses of companies both large and small, there are ways to navigate competition with the other.
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