The Cold Start Problem, as described by Andrew Chen, refers to the initial stage of building a network effect where the value of the product or service is not apparent because there are not enough users or participants. This is the first stage in Chen's theory, and it's a critical hurdle to overcome for any business trying to build a network effect.
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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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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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