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The chicken and egg problem is a common phrase that describes a situation where it is not clear which of two events should be considered the cause and which should be considered the effect. It's a dilemma from causality, where the cause and effect are both interdependent.
In the context of business and technology, it often refers to the difficulty of launching a new product or service that relies on a network of users. For example, a new social media platform is only valuable if there are users, but attracting users is challenging without an already established platform. This is also known as the network effect.
The term originates from the age-old question: Which came first, the chicken or the egg?
Asked on the following book summary:
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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When a networked product launches, it faces a chicken-and-egg problem: people need to use it for it to be worth anything. Think of Facebook, Slack, or Airbnb. So how do you start the very first network without a basis to work from? Andrew Chen, General Partner at Andreessen Horowitz, calls this the Cold Start Problem.
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