What happens when a network 'hits the ceiling' according to Chen's theory?

According to Chen's theory, when a network 'hits the ceiling', it has reached its maximum growth potential and cannot expand further. This stage is characterized by a plateau in growth, where the network is unable to attract new users or retain existing ones at the same rate as before. It's a critical point where the network needs to find new ways to sustain its growth or risk stagnation.

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is Chen's attempt to help us better understand network effects: how to solve the Cold Start Problem, how to scale network effects, how to manage growth plateaus, and so on. Chen's Cold Start Theory is broken down into 5 stages: 1. the cold start problem; 2. the tipping point; 3. escape velocity; 4. hitting the ceiling; 5. the moat.

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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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