Andrew Chen has long been a student and teacher on how to attract users while startups have been successful in attracting many new users.
Today, he supports portfolio companies with what he has learned as a general partner of Andreessen Horowitz, founder and former Uber executive who has led the company’s “Rider Growth” product team for several years. I am. Among these are the all-day kitchen, clubhouse, sub-stack and snack pass.
But to share those lessons more widely, always Prolific The writer has also published a new book by HarperCollins. Cold Start: How to Start and Scale Network EffectsIntroduces readers to interviews with 30 world-class teams and founders such as, Twitch, Airbnb, and Slack, and describes what it takes to turn a startup into a large brand. ..
We talked to Chen today about this book, including how web3 projects fit or don’t fit into previous startup types. The excerpts from the chat continued, and the length was lightly edited.
TC: TC: You’ll find many anecdotes about overcoming the so-called cold start, including the early days of The Tinder. I didn’t know the story in advance. Can you tell me what happened?
NS [first version] The app was very good. It had a swipe, a profile picture, and all the features I needed.However [after] [Tinder’s founders] I manually invited a lot of friends, but these friends didn’t stick. There were not enough profiles. So how do you get hundreds of people who want to use the app at the same time?
Their approach was to go to a nearby USC campus and sponsor a birthday party for one of the people in the Sorority System there. [The idea was to] Hold this big party and invite hundreds of people.And they had a bouncer before the party, so you had to download The Tinder to do [gain entry].. And people went and it was a cool party, and the next day they opened the app, and they said, “Wow, these are all these people I didn’t have a chance to talk to.” It was like.
Sean [Rad] It’s because of the 500 people who helped him take over the USC campus. [a formula that Tinder then used to make inroads at other schools]..
You talk about the importance of these “atomic networks” in the book. In the case of The Tinder, it seems that there were 500 people. How does the founder determine what size this should be? Is there a formula?
I think it’s part of [the answer] This is just a conceptual reasoning. Is this for 2 people, 10 people, or 100 or more people that need to be built? With large amounts of data, this tends to be much easier to do. When I read about these threshold points, such as Facebook’s “7 friends in 10 days” and Airbnb’s idea that they needed a list of 300, 100 were reviewed. [both were] What we are actually doing is selecting that point on the curve. This point has a small twist, “Now, at this point, the product is starting to really be of value.”
Are there any best practices for building that core audience?
What we see is in all new categories of products that need to be creative and original, not just a reproduction of what has been done in the past. If not, it will be out of date. The initial CTR for banner ads was actually over 70%, but these days it’s well below 1%.
You also need to do something that matches the value proposition and the type of product you are building. If you’re building something for a social network, college or high school is a great place to go. If you’re building something for collaboration at work, you’re probably going to a startup or a small team rather than a big company. If you’re building something on web3, you’ll need to go to the Discord server and subreddit and talk to the Twitter influencer at the heart of web3 to make that happen.
Especially when it comes to Clubhouse, at least initially, I wasn’t completely dependent on discovering a platform for college students to grow. Is that correct?
I think I was 104 users, but when I led the series A investment and joined the board, it was actually very small as there were only 500 active users per day. Clubhouse’s early atomic network really [founder] Pole [Davison] Paul’s friends in the San Francisco Bay Area, and we started seeing amazing holding power.The length of that time [these individuals] I spent more than an hour and a half listening to the app per session. This is amazing.
In some of the later rounds, we actually doubled and tripled the company, but some of the analysis [tied to] [Clubhouse-provided] The data is from the United States, but especially Sweden, especially Nigeria and other small countries. We were looking for networks built in some of these other countries and whether existing customer retention and engagement were as good as some of the more mature markets. What we saw was that the data was great. It showed that you can take a clubhouse network and break it down into networks of smaller networks, and these looked like multiple atomic networks. It really helped us build the belief that we will continue to support the company and continue to invest more.
How would you advise the founders about adding features that would allow people to come back? Also, can you talk specifically about your Clubhouse plans?
Going back to the college audience, I remember when Facebook first appeared. Everyone, “Why do you need a Facebook account?” Or people wonder why I need a Twitter account. The platform really sticks only when the network around someone (friends, family, interested content creators) actually arrives. And I think that’s what you see in products like Clubhouse and Substack.
For now, if you’re in the media industry, if you’re in politics, if you’re in technology, you’re very excited about what the substack does, but you’re in those areas of interest. If you’re outside, you’re not, get it yet. But they do so much around the chef and cooking. They are doing a lot now, especially in comics and graphic novels. And all these different categories light up from vertical to vertical. And as you go, it will be much more interesting. Clubhouse does almost the same thing. I think they are very interested in sports now. They are very interested in news and politics and have always done so. Once each of these categories is built, [both platforms] It will be more powerful and compelling for more people.
How do you think web3 will affect the construction of your network?
Since the core of Web3 has network effects built in, I think it will educate a whole new generation of founders about what it takes to get started with network effects. What does that mean? Bitcoin is worth it because other people think it is worth it. Also, if you fork the source code, fork the blockchain, and run your own version of Bitcoin, you won’t have the same dynamics or values. We need more people to believe it. The same is true for Bored Ape and Crypto Punks. They are worth it because others think they are worth it.
Because there is a network effect built in the core [of web3], It also means that you also have a cold start problem. If you want to create a brand new drop of 10,000 NFT, you need to understand the following: Would you like to access the right Discord server and excite the right community with these? Otherwise, you can push NFTs out there and no one will buy them. So, at the heart of many web3 ideas is a cold start issue, and we look forward to updates that need to be created within five years to replace all case studies such as Tinder, Dropbox, Slack, etc. with everything. Their web3 version!
Andrew Chen of a16z on how startups get past a “cold start” to survive, then thrive – TechCrunch Source link Andrew Chen of a16z on how startups get past a “cold start” to survive, then thrive – TechCrunch