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The Cold Start Problem, as described by Andrew Chen, refers to the initial challenge faced by networked products when they launch. These products need users to provide value, but attracting users without an existing network or value proposition can be difficult. This is often seen as a chicken-and-egg problem. However, companies can overcome this problem through strategies like bundling, where a larger network uses its resources to launch into another product domain, thereby establishing traction.
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Bundling is when a bigger network uses its resources as a launchpad into another product domain. Companies of this size can solve the Cold Start Problem and establish traction—provided the product itself is good enough. In a "stroke of product marketing genius" according to Chen, Microsoft bundled Word and Excel together to make Microsoft Office. An effort was made to enable interoperability between Office apps. The rest is history. Provided the product is outstanding and advances the industry in some important way, bundling can be a powerful tool to accelerate success.
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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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