Where to Start with Andrew Chen: A Reading Guide
Where to start with Andrew Chen — how to approach The Cold Start Problem, his comprehensive framework for network effects and building platform businesses. A complete reading guide.
By Marcus Webb
Andrew Chen is a general partner at Andreessen Horowitz, where he leads investments in consumer and marketplace companies. Before moving to venture capital he led growth at Uber during its most rapid expansion. The Cold Start Problem: How to Start and Scale Network Effects (2021) was published by Harper Business and draws on interviews with hundreds of founders and Chen’s direct operational experience across dozens of network-effect companies.
Where to Start: The Cold Start Problem (2021)
The essential Andrew Chen — and the most comprehensive treatment of network effects available in accessible form. The Cold Start Problem begins with an observation any founder of a platform or marketplace business will recognise immediately: at the beginning, your product is not valuable because it has too few users, and it has too few users because it is not yet valuable. This circular trap is the cold start problem, and it is the existential challenge of every network-effect business.
Network effects — the property by which a product becomes more valuable to each user as more users join — are the most powerful competitive moat in technology. Platforms like Uber, Airbnb, Slack, LinkedIn, and YouTube derive most of their value from this property. But network effects only kick in once a threshold of density is achieved; below that threshold, the product may barely function at all. Chen’s book is the comprehensive guide to bridging the gap.
The key insight for solving the cold start problem is the atomic network: the smallest possible self-sustaining network within which the product delivers enough value to retain users without scale. Uber’s atomic network was a single city: a rider in New York needs drivers in New York, not Los Angeles. Slack’s atomic network was a work team. Tinder’s was a college campus. The strategic implication is that network-effect businesses should not attempt to build global scale from day one — they should dominate their atomic network first, then replicate the model across adjacent networks.
Chen structures the book around five stages of network-effect business development: the Cold Start (getting the first atomic network to a point of self-sustaining value), the Tipping Point (the threshold beyond which users acquire more users and the network becomes self-sustaining at scale), Escape Velocity (the phase of rapid network expansion where growth compounds), the Ceiling (the plateau that almost every network eventually hits as its most-accessible users are saturated), and the Moat (the defensive advantages that sustain the business against competitive attack).
Each stage has distinct challenges requiring different strategies, and Chen illustrates each with case studies drawn from companies including Uber, Airbnb, Slack, Tinder, Dropbox, and dozens of others. The access to internal data and firsthand accounts from founders gives the book a specificity that academic treatments of network effects cannot match.
The anti-network effects section is the book’s most undervalued contribution. Forces that make a product worse as it grows — marketplace saturation, spam, quality degradation, network fragmentation — are as predictable as the positive network effects that drove initial growth, and they are the primary threat to mature network-effect businesses. Understanding them is as important for the long-term strategic picture as understanding how to achieve initial density.
The book’s limitation is its scope: the framework applies to marketplace and platform businesses far more than to other models, and readers building or evaluating software-as-a-service or direct-to-consumer businesses will find many chapters only partially applicable. But for its intended audience — founders, investors, and product leaders in platform businesses — it is essential reading.
Reading Andrew Chen
The Cold Start Problem is Chen’s essential book. It stands alone and requires no prior reading.
For the full Andrew Chen bibliography, reviews, and biography, visit the Andrew Chen author page on Editors Reads.
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Frequently Asked Questions
Where should I start with Andrew Chen?
The Cold Start Problem: How to Start and Scale Network Effects (2021) is Chen's essential book — the most comprehensive framework for understanding network effects available, drawn from his experience leading growth at Uber and investing at Andreessen Horowitz. Required reading for anyone building or evaluating a platform or marketplace business.
What is The Cold Start Problem about?
The Cold Start Problem explains how network-effect businesses — platforms and marketplaces whose value grows with each new user — face an existential early challenge: they are not valuable because they have too few users, and they have too few users because they are not yet valuable. Chen's five-stage framework (Cold Start, Tipping Point, Escape Velocity, Ceiling, Moat) traces how the most successful technology companies solved this problem and then defended their position.
Is The Cold Start Problem only relevant for tech founders?
The Cold Start Problem is most directly useful for founders building marketplace or platform businesses, product leaders at network-effect companies, and investors evaluating them. The framework has limited applicability to non-network-effect businesses. However, the conceptual vocabulary — atomic networks, tipping points, anti-network effects — is increasingly part of how product and strategy conversations in technology happen, making it broadly relevant for anyone working in or with technology companies.
What should I read after The Cold Start Problem?
After The Cold Start Problem, Geoffrey Moore's Crossing the Chasm covers the related challenge of market adoption for technology products with classic depth. Marty Cagan's Inspired covers how the best technology product teams are built and managed. April Dunford's Obviously Awesome covers the positioning decisions that determine whether a new product's value is visible — the messaging complement to Chen's distribution framework.
