I've been waiting with excitement for Andrew Chen's upcoming book The Cold Start Problem. I've known Andrew for a long time and he's brilliant on this topic, among many others.
As he notes, every network that solves for a cold start goes through a growth and acceleration phase, followed by flatline and (potentially, likely) decline.
After you've solved the cold start and are scaling rapidly, you need to push off the ceiling of growth and solve for retention and quality engagement, aka, network health.
- Match.com: the most attractive users get the most emails, get frustrated, and leave the site
- LinkedIn: the most desirable employees get flooded with recruiter solicitations, and leave the network
- Slack: the highest-ranking (and potentially most important) employees get too many messages and eventually only respond to a filtered set if they engage at all.
Addressing network health varies by the marketplace and user type. That said, here are 3 major approaches:
- Signaling: tell the user (recruiter, job seeker, online dater, house hunter, etc.) how likely they are to get a response. OkCupid pioneered this method of signaling likely responses. LinkedIn shows candidates how likely it is that they are qualified for a job.
- Limiting: control the rate of emails, group messages, or other problematic behavior that is causing network failure. Facebook restricted spammy apps from messaging users. Usually, problems are caused by less than 1% of the total user base, so network size is rarely affected.
- Charging: put even a small fixed or variable toll on actions. Anything greater than $0. Gas prices in the Etherium network serve to prioritize the most valuable transactions. While Etherium is struggling to reduce gas prices to enable scale, given current constraints, this is an efficient solution.
