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What is the "chicken and egg" problem and how can it be solved?

  • Do you have anything different to add, after reviewing the various guises of this problem?  For example: There are some chicken-and-egg opportunities that haven't been problematized yet ... (Perhaps this compilation would be better off in a blog post?) The "Problem" in General Philosophy Science Problem Solving Blogs and Commentary https://market-place.quora.com/How-do-I-solve-the-chicken-and-the-egg-problem How did  (social media) startup company X solve the chicken and egg problem? More Cases: Specific Markets: Market Strategy and Tactics

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    You have to solve chicken and the egg problems when creating new products and new product categories all the time.   This is why those categories are hard, and why few investors are interested in them.   Lots of companies that attempt these markets fail, because they try to just do a good job of creating the chicken, or the egg.  As I hope to show below, the way to solve these problems is often to appeal to a 3rd object or person that creates a nexus that brings the first chickens and eggs together for a different reason. I've faced that kind of multiple stakeholder challenge in multiple start-ups and I like this kind of challenge.  It creates huge barriers to competition at the start, and if you can beat it, there are often network effects that allow you to solidify an early lead.    One area where I faced a variant of this chicken and the egg problem was when I was co-inventing web conferencing.   Here's the problem written out in classic "chicken and the egg" style format: Why would any prospective presenter invest time to learn a new  technology for delivering their presentations -- if this technology does not already reach a large audience? And why would any prospective audience member invest time to learn a new technology for viewing presentations, if there are no presenters out there using it that they care about? Clearly, you can't develop this market by addressing only one half of it. Here's what we did to get out of that dilemma.    We found popular speakers on the lecture circuit. They knew how to get physical audiences, so they didn't need web conferencing.  But there were parts of the country that where there were people who wanted to attend their lectures but those home or work locations were distant from where these popular speakers were booked.   This represented potential income that they were losing by not traveling to more locations. This identified an unsatisfied geographically distributed audience that we could now serve but that 20 city tours could not serve.    These are people who wouldn't learn web conferencing simply for the prospect of being able to connect to unnamed possible future speakers.   But they would learn web conferencing if it would allow them to attend one of these lectures interactively that they would otherwise miss or only see on tape. Now we had an eager audience, but still the presenters weren't sure if this would be worth learning or not.  But if we would pay their normal honararium, they would be happy to present to our audiences  So, rather than have them learn how to use our system, we had our staff "push slides" for them,  so all they had to do is what they already did in lecture tours -- talk. In the course of doing some of these presentations, they'd see how easy it was to learn how to present, and they'd also discuss many large, enthusiastic and previously untapped markets that they could now serve.   Before long, other presenters could see that there were these existing audiences who would attend web conferencing presentations.   And because many of them found this cheaper, more convenient and time-saving, suddenly there were more presenters using the technology and ever more reasons for audience members to try the technology. The barrier to entry became a virtuous circle.   Within two years our company had become the largest in the space, and ultimately we sold the company to Microsoft where the company became Microsoft Live Meeting.  But it all happened by seeding both presenters and audiences simultaneously.   While that's hard -- if you figure out how to do it, you have a strong market advantage.

Scott McGregor at Quora Visit the source

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Once, on the 7th hour of a technical interview I had aced, the CEO asked me a question about a line on my resume that stumped me: CEO: You say you've created an operating system for a virtual machine in college. Me: Yes. CEO: How did you code it? Me: C++ CEO: How did you compile it? Me: From the command prompt. CEO: Which operating system? Me: Unix CEO: So you needed an OS to create an OS. What if you didn't have one? What if you were the person who needed the first OS? Me: ... I failed the interview during those three long dots. Then I went home and thought about it more: how come most compilers are written in the very same language they compile? They're actually not. To write your first Java compiler, you need your C++ compiler. Once you have a Java compiler, you can rewrite The Java Compiler using a Java Compiler. To write a mobile operating system, you need a desktop operating system. Once you have mobile OS, you can recreate it in the mobile OS. What about the first OS or Compiler? Turns out hardwiring instructions using hardware and pairing it with hardcoded electric data is the mother of software. What about the first electronic device that represented both hardware and software in wires? Turns out it was an electronic analog of a long tape representing the data stack on one end and the instruction stack on the other end. Paper! Also known as the Turing Machine. What came before the punch card tape? Human instructions and notes. Before that? Verbal Language. Before that? Primates and non-verval language. Before that? Mammals. Before that? Dinosaurs, which became the chickens and eggs. Before that? Fish and eggs. Before that? Undifferentiated bacteria. Before that? The proto-cells. Before that? Electrons and Protons. Before that? The big bang. Before that? We think everything before that happened parallel to it, summing up to nothingness. When you start a startup company and encounter a chicken and egg problem, you're probably on the wrong track: Your job is not to explain the big bang or to create it. Your job is to take an existing post-big-bang analog, viable in its current environment. You must then take it to a new dimension (e.g. the Internet) to open up new properties, without killing life during the process. Facebook didn't create the first book of faces. We had Yearbooks before. The chicken didn't precede the egg. The fish did. And before the fish, the thing that laid eggs was itself an egg. To read the full and updated version of this essay, "First Job Ever" from the book "The Unusual Candidate", see my blog: http://www.aminariana.com/first-job-ever

Amin Ariana

The Chicken and Egg solution in the On demand economy: To give your On demand startup a successful start, you need to first figure out a way to overcome the main problem posed by building a platform in the on demand economy. The core challenge that any business faces in the on demand economy is customer acquisition – both on the consumer and producer side. If your looking to start a business in the On Demand economy, there are broadly 5 ways in which you can overcome this problem1. Start Smallhttps://twitter.com/share?url=http%3A%2F%2Fnextjuggernaut.com%2Fblog%2Fhow-to-start-an-online-business-in-an-on-demand-economy%2F&text=When+you+start+small%2C+it+is+easier+to+get+both+sides+of+customers+to+accept+your+offering. Focusing on a single city, area or even a neighborhood first can help you prove the model to both suppliers and consumers.2. Bring High Value Users on Board firsthttps://twitter.com/share?url=http%3A%2F%2Fnextjuggernaut.com%2Fblog%2Fhow-to-start-an-online-business-in-an-on-demand-economy%2F&text=Users+whose+participation+brings+in+extra+value+on+the+platform+will+attract+other+users+to+interact+with+them. Giving monetary subsidies to encourage participation of high value producers is an important tactic to bring in more customers.3. Act as a ProducerThis strategy helps you focus on one user group at a time as the platform acts as a producer to attract an initial group of consumers. It then uses its existing consumer base to attract additional producers.4. Tap into an existing networkhttps://twitter.com/share?url=http%3A%2F%2Fnextjuggernaut.com%2Fblog%2Fhow-to-start-an-online-business-in-an-on-demand-economy%2F&text=Rather+than+creating+a+platform+from+scratch%2C+it+can+prove+useful+to+partner+with+an+existing+network+to+attract+a+subset+of+their+users. Compared to the existing solution, your platform must provide additional value to potential users.5. Impart Standalone value to your Producthttps://twitter.com/share?url=http%3A%2F%2Fnextjuggernaut.com%2Fblog%2Fhow-to-start-an-online-business-in-an-on-demand-economy%2F&text=A+product+that+has+standalone+value+irrespective+of+the+network+is+more+likely+to+get+traction+among+at+least+one+set+of+users. In such a case, the end consumer is sold purely on the value of the standalone product and not on the promise of the added benefit when the network kicks in.If you are looking for a more throughly description of how to overcome this problem, read the full blog post: http://nextjuggernaut.com/blog/how-to-solve-the-chicken-and-egg-problem/

Josefin Holmberg

I looked through your list of articles. They are very interesting! Here is another which I suggest you add to the list: https://blog.captainup.com/how-to-set-up-your-online-business-the-right-way/ The Libbie Club have managed to overcome the chicken and egg problem that most online new businesses come across. Using Gamification they have managed to engage their users from day 1. Check out the tips in the article from the Libbie Club marketing manager, Thomas Jacquel.

Leah Berwald

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