🐔🥚 Chicken-and-Egg Problem

Updated at 2014-10-27 06:19

In business, the chicken-and-egg problem is a dilemma of user acquisition. It applies to products that are more valuable when there are a lot of users or users of different types interacting to provide value.

Telephones aren't valuable if only you and some random hobo has a phone.

An auction website isn't valuable for buyers if there aren't any sellers, and vice versa.

This note contains a couple of ways you can try to tackle the problem.

Offer backwards compatibility.

When a new version of Windows is released, all software work on that too.

Offer sideways compatibility.

When releasing a product for Windows, you should seriously consider also offering it to Mac users.

Open source it. This allows other developers to take over the project if original developers stop developing it.

PHP and CodeIgniter have had multiple maintainer changes.

Influence the big boys.

CDs had multiple predecessor but all of them failed to convince big record labels about piracy conserns. When Sony and Philips launched CD, Philips owned 50% of a major label named Polygram so they could leverage them to release CDs.

Package the product so it gives some stand-alone value.

VCR was first marketed as way to record television programs. There weren't any pre-recorded video casettes on the market yet.