An Introduction to Network Effects

Founder's Journal

Morning Brew

Careers, Business, Entrepreneurship

4.8 • 1.1K Ratings

🗓️ 18 April 2022

⏱️ 16 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

In this episode, I break down what business builders need to know about network effects, inspired by Andrew Chen and his book, The Cold Start Problem. Check out full episode transcripts at https://foundersjournal.morningbrew.com to learn more, and if you have any ideas for our show, email me at [email protected] or my DMs are open @businessbarista. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

Click on a timestamp to play from that location

0:00.0	What's up crew? This is Alex Lieberman, co-founder and executive chairman of Morning Brew.
0:05.4	Welcome back to Founders Journal, where I give you the business builder,
0:09.5	the tools you need to think better in order to build better, whether that's building a business,
0:14.2	a team, or a new product. Today, I am giving you the always important introduction
0:20.4	to a little thing called network effects. Let's hop into it.
0:24.8	So I've been reading an amazing book this week, which by the way I post on my Instagram,
0:32.4	you should follow me on Instagram and be done already, and I want to tell you about the book.
0:37.2	The book is called Cold Start Problem, and it is by Andrew Chen. Andrew Chen is like the God of
0:44.5	Growth. He ran growth at Uber. He's written thousands of essays about growth. He's involved with
0:50.4	Reforge, which is a growth marketing based education company, and he's now a partner at Andrew
0:56.1	Chen, where he focuses on network based businesses. And so I want to summarize some of the things
1:03.4	that I've learned from his book by telling you a story to start. It's a story that starts
1:08.9	sad, but gets happy. In 2009, there was this company, and it was a little itty bitty software
1:16.4	company called TinySpec. You probably haven't heard of TinySpec. It's okay. They're not around
1:21.4	anymore. TinySpec had this amazing team, an amazing founding team that had previously sold a
1:28.4	business for tens of millions of dollars, so they had a ton of credibility, and they raised 17
1:34.2	million dollars to start TinySpec. And their goal was very simple. They wanted to build the next
1:41.2	massive multiplayer game. The game was going to be called Glitch, and it was supposed to change
1:48.0	the face of gaming forever. Unfortunately, if you fast forward, Glitch did everything but that.
1:55.6	People absolutely hated the game. 97% of people who signed up for Glitch left within five minutes.
2:04.1	If you don't have a reference point, just know that is shitty. The business was a leaky bucket. They
2:09.0	could not keep users. And the only way, unfortunately, for a multiplayer game business, also a network
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Morning Brew, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Morning Brew and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.