How tech’s giants drive growth with network effects - Deepstash

Keep reading for FREE

How tech giants get so big

Andrew Chen writes in his book, The Cold Start Problem: Using Network Effects to Scale Your Product, how companies like Google, Uber, Dropbox, and Tinder use network effects to break through the competition and reach viral growth.

Network effects describe how the value of a product or service depends on how many users engage with it. The more users engage, the more desirable it becomes.

25

312 reads

The key is to connect people

Many Silicon Valley startups have become so big because their products connect people. Products like Zoom, Dropbox, GitHub, even Microsoft Office are all different versions of this.

Network effects have been around for a long time. Theodore Veil, the chairman of aT&T, stated in 1905 that the phone is useless. Its only value lies in letting you connect with people. 

It means that you can build a product with all the right features, but if you don't build the network alongside it that lets people connect in the right way, if your coworker's don't use it, your product will not be successful.

27

153 reads

Scaling a minimum viable community

If two companies both build a note-taking app for personal use, it is one product vs another. But if it's collaboration, whenever one company wins a user, they possibly win their whole sphere of influence as well.

24

153 reads

Understanding context

Networks have different underlying structures. The growth of companies like Uber is bound by geography. They are very successful in San Francisco, but that does not help them to gain popularity in London. Companies like Airbnb have a global network effect. A B2B example would be Zoom vs Slack. Zoom is used across organizations, but Slack is within an organisation.

Ask yourself what your network looks like. Then consider how many users you need to make the network valuable.

23

126 reads

Don’t copy-paste other people’s features into your products

Design your network features thoughtfully. You need to understand what you think your network will look like first. Is it a local network? Or a network more like marketplace companies like eBay? 

Decide on how many users you need before the network is valuable. Zoom might be useful with two or three people, Slack with five or ten people in a team. Something like Airbnb or Uber needs hundreds of network participants in a hyperlocal region to work.

24

111 reads

Following the S curve

Products powered by network effects often follow an S curve. When growth slows down, you will need to find a new product.

The Cold Start Theory stages:

  1. The problem. How do you get a team to use your product and get excited?
  2. The tipping point. To get momentum, figure out how to get one team excited about your product so that they spread it to others.
  3. Escape velocity. Consider how to build your product to spread inside of a company automatically.
  4. The ceiling. Growth eventually slows down, and you hit saturation.
  5. The sustainable moat. When everyone has network effects, how will you compete?

23

91 reads

Hitting the ceiling

First, you have to figure out the new network product that drives the rest forward. Big companies can easily get millions of people to a product launch, even if it is a bad product. But they may discover that it won’t stick over time. 

The solution is to get small groups of people excited about your product, then move from network to network.

24

105 reads

CURATED BY

arthurjohnson

Textile designer

How to get past the "cold start problem" of zero users and build the networks that make your product successful.

Ready for the next level?

Read Like a Pro

stash-superman-illustration

Explore the World’s

Best Ideas

200,000+ ideas on pretty much any topic. Created by the smartest people around & well-organized so you can explore at will.

An Idea for Everything

Explore the biggest library of insights. And we've infused it with powerful filtering tools so you can easily find what you need.

Knowledge Library

Powerful Saving & Organizational Tools

Save ideas for later reading, for personalized stashes, or for remembering it later.

# Personal Growth

Take Your Ideas

Anywhere

Organize your ideas & listen on the go. And with Pro, there are no limits.

Listen on the go

Just press play and we take care of the words.

Never worry about spotty connections

No Internet access? No problem. Within the mobile app, all your ideas are available, even when offline.

Get Organized with Stashes

Ideas for your next work project? Quotes that inspire you? Put them in the right place so you never lose them.

Join

2 Million Stashers

4.8

Stars

5,740 Reviews

App Store

4.7

Stars

72,690 Reviews

Google Play

Sean Green

Great interesting short snippets of informative articles. Highly recommended to anyone who loves information and lacks patience.

samz905

Don’t look further if you love learning new things. A refreshing concept that provides quick ideas for busy thought leaders.

Shankul Varada

Best app ever! You heard it right. This app has helped me get back on my quest to get things done while equipping myself with knowledge everyday.

Ashley Anthony

This app is LOADED with RELEVANT, HELPFUL, AND EDUCATIONAL material. It is creatively intellectual, yet minimal enough to not overstimulate and create a learning block. I am exceptionally impressed with this app!

Giovanna Scalzone

Brilliant. It feels fresh and encouraging. So many interesting pieces of information that are just enough to absorb and apply. So happy I found this.

Laetitia Berton

I have only been using it for a few days now, but I have found answers to questions I had never consciously formulated, or to problems I face everyday at work or at home. I wish I had found this earlier, highly recommended!

Jamyson Haug

Great for quick bits of information and interesting ideas around whatever topics you are interested in. Visually, it looks great as well.

Ghazala Begum

Even five minutes a day will improve your thinking. I've come across new ideas and learnt to improve existing ways to become more motivated, confident and happier.

Read & Learn

20x Faster

without
deepstash

with
deepstash

with

deepstash

Access to 200,000+ ideas

Access to the mobile app

Unlimited idea saving & library

Unlimited history

Unlimited listening to ideas

Downloading & offline access

Personalized recommendations

FAQ

Claim Your Limited Offer

Get Deepstash Pro