An 'atomic network', as described by Chen, is a small, initial network where businesses start to overcome the Cold Start Problem. These networks often start in a single city, college campus, or small beta tests at individual companies. They are smaller than entrepreneurs often think. For example, Uber's early atomic networks were not entire cities like San Francisco, but specific locations and times like '5pm at the Caltrain Station at 5th and King Street'. Once they succeed in these smaller networks, they gradually expand to conquer larger markets.

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The Cold Start Problem can have significant implications for market competition. It can create barriers to entry for new businesses, as they need to overcome this problem to establish themselves in the market. This often involves starting small, in a single network or location, and gradually expanding once they have established a successful model. This can slow down the rate of expansion and limit the ability of new businesses to compete with established ones. Moreover, the need to overcome the Cold Start Problem can also lead to a focus on niche markets or specific locations, which can limit the scope of competition.

The Cold Start Theory can apply to industries outside of tech startups in a similar way. The idea is to start small, focusing on a specific niche or market, and then gradually expand. This could be a specific geographic location, a particular demographic, or a unique product offering. Once the business has established itself within this smaller network, it can then use this as a foundation to expand and grow.

To build a 'moat' around a networked product, one strategy is to start with a single network, or an 'atomic network'. This could be a small, specific location or group, like a single city, college campus, or small beta tests at individual companies. Once the product is successful in this smaller network, it can gradually be expanded to larger networks. This strategy helps to establish a strong user base and create a barrier to entry for competitors.

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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...

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