Whenever I find a product that works, I always wonder: what was it like on day 1? How did it go from nothing to something?
That’s what makes The Cold Start Problem a fun read: it covers iconic stories about DoorDash and Reddit’s early days, Airbnb’s near-death experience, and Google’s big tumble. Today, they carry an air of inevitability, but there was a time when history could have bent a different direction.
Let’s learn from their pivotal moments — starting from zero, fending off competitors, avoiding vanity metrics, and why winner-takes-all is sort of a lie.
Starting from zero
You’ve probably heard the famous saying: do things that don’t scale. But what does that really mean?
Here’s how I think about it: every product has a threshold for “good enough” to get traction. For communities, that means a beehive of activity. Reddit cofounder on their early days:
It was our job each day to make sure there was good content on the front page. We’d post it ourselves, using dozens of dummy accounts. Otherwise the community might dry up. I wrote some code that would scrape news websites and post them with made-up usernames. That way, it looked like there was an active community.
For marketplaces, “good enough” means selection. When DoorDash first launched, restaurants had no incentive to join an empty site. So the founders copied the PDF menus, and listed their own phone numbers for customers to call. Once they got an order, they would relay it to the restaurant, then pick it up and make the delivery.
As for that elusive demand, “good enough” sometimes means turning to incumbents. Airbnb notoriously used Craigslist for distribution early on. Once a host set up their Airbnb listing, they could auto-publish to Craigslist to get more traffic. By the time Craigslist cracked down on this, Airbnb had already built up its own demand.
Today, these companies are more buttoned-up, and their people might even cringe at some of these efforts. It’s a reminder that while a big company operates by rules, starting from zero is an exercise in how to defy them.
I used to think do things that don’t scale = do whatever it takes to grow fast, but let’s read the examples more closely:
- When Reddit was a one-man community, the goal was not to maximize # links or comments, but to make ‘em so good they would attract real people
- The DoorDash founders were the first delivery drivers, which helped them internalize the customer experience before scaling
- Airbnb used Craigslist to juice demand, but carefully built high-quality listings
Sustainable growth is the byproduct of a great experience repeated over and over. And nailing that core experience often requires starting small and growing deliberately.
Airbnb’s near-death experience
In 2011, a startup started helping people find places to stay while traveling. It secured $90M in funding, hired 400 employees, and booked over $100M in revenue in its first year. Except this wasn’t Airbnb, it was Wimdu — Airbnb’s European copycat.
At the time, Wimdu had 10X the funding and headcount of Airbnb, who was still only in the US. Wimdu's founders had previously sold eBay and Groupon copycats for hundreds of millions. In short, it had all the markings of a scary competitor… until it crashed and burned.
As it turned out, Wimdu's rocket ship was built entirely on chasing numbers. To maximize # listings, they prioritized hosts that managed hundreds of units, often in the form of low-end hostels. This made for a meh experience, guests didn’t stick around, which then required a heavier reliance on paid marketing to keep the numbers up. Three years in, the house of cards collapsed.
Airbnb’s secret weapon was doing the opposite. They painstakingly curated their early selection. They built the company with the intention of running it for a long time.
Wimdu chased vanity metrics to their death, but they're not the only ones. Once upon a time, Google also took an ill-fated trip down this road.
Google’s big tumble
When you’re already minting billions, how would you launch a new product? You would probably set big goals — after all, that’s the only way to move the needle. Big goals = more resources, more clout.
Naturally, when Google launched their social network, Google+, they just did that. Linking from high-traffic juggernauts like Search and YouTube made a huge splash:
But while the headline metrics looked impressive, they overlooked the most crucial piece of a network: quality and density. I vaguely remember signing up for Google+, only to be greeted by a ghost town of a page. Indeed, users were churning out fast — a problem that was covered up for too long by the firehose of traffic.
At its peak, Google+ had 300M active users, but it would be misleading to say the product ever “worked”. It’s the perfect case study of how impressive acquisition may not lead to engagement, which means no path to monetization.
It’s also an example of how Google the Goliath — a giant with unlimited resources — can lose. Giants exert immense force when they respond, but it takes a while to wake all the troops up. Giants also have to pay a strategy tax: any new thing has to fit into their existing conception of what they do. And a lot of promising things start small — too small to be interesting until it’s late in the inning.
Google+ was a belated reaction to Facebook, which first served college students before opening up to the world. In fact, there’s a curious pattern of humble beginnings: eBay started with collectibles, Uber started with black cars, TikTok started with lipsyncing music videos, which brings us to our final point…
Winner-takes-all is a lie
Many growing companies like to believe they’re in a winner-takes-all market. But look closely enough at any big market and what you’ll find is an abundance of submarkets woven together.
Even when Uber dominated the US market, there were still pockets like SF and LA where they were in a tight race with Lyft, hence all the crazy discounts then. I also remember working at Snapchat when Instagram launched Stories. Many of us thought that spelled the end, but since then, Snap has only deepened its hold over Gen Z.
Winner-takes-all is a lie because in a free market, it’s impossible to snuff out every competitor. I’m convinced there are unguarded spots, even in crowded markets, that could turn into powerful niches. All this to say: if we are willing to start small and stay focused, we can find a wedge that moves the world.
If you’d like more stories and examples, try The Cold Start Problem 📖 and Idea to Startup podcast🎙️