A note from Daniel

It's hard to ask teams to start and build new products from scratch. It's difficult enough as a startup, but trying to do this inside a larger company adds myriad of complexities—there's internal politics, distractions, lack of resources, adverse selection of talent, and dozens of other challenges. The types of teams that have been used to incrementally build large, multi-year franchises may never have encountered the Cold Start Problem, so they bring the wrong background and tools to the table. The cheat code for large companies is simply to buy startups that have hit Escape Velocity, and integrate them into a preexisting network. This is exactly what eBay did with PayPal, which must be one of the best acquisitions in the technology industry. It turned out to be a great idea, as PayPal eventually be worth more than its parent.

Daniel Cold Start Problem, page 262 · September 27, 2023 Save to shelf
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