Most brokers launch copy trading platforms with zero strategies.
This is what kills platforms before they start: the empty platform problem. And it’s far more severe than most brokers anticipate.
Copy trading exhibits classic network effects.
The platform becomes valuable when it has both signal providers and copiers. Each group makes the platform more attractive to the other, creating a positive feedback loop once momentum begins.
But here’s the trap:
The result is a platform stuck at zero, unable to generate the initial momentum needed to activate network effects. Two-sided marketplaces face a critical “chicken-and-egg” challenge where both sides of the network must reach minimum viable scale simultaneously for the platform to activate network effects.
Many platforms never reach critical mass. They’re abandoned before reaching the threshold where network effects start compounding.
Critical mass isn’t a vanity metric. It’s the point where the platform becomes self-sustaining, where each new participant increases value for existing participants, creating genuine momentum rather than manufactured activity.
For copy trading platforms, this threshold appears to be somewhere around 100-200 actively performing strategies. Analysis of fintech marketplace launches by CB Insights shows that successful trading platforms typically require 100-200 active participants to achieve self-sustaining growth, with platforms falling below this threshold experiencing significantly higher failure rates.
Below that number, you’re still in what’s known as the “valley of death” – the period where platform growth requires constant artificial stimulus and user acquisition remains prohibitively expensive.
The chicken-and-egg problem is always more severe than it appears on paper.
Brokers assume “if we build it, they will come.” The logic seems sound:
But they’re applying logic from traditional platform businesses where users have standalone value. A marketplace seller can list products whether or not buyers exist yet. A social network user can post content to their existing social circle.
Copy trading is different. A copier without strategies to follow has zero value to gain from the platform. A signal provider without copiers has zero incentive to participate. Neither group will join a platform that doesn’t already have the other.
Most brokers dramatically underestimate the time required to reach critical mass organically.
Industry data suggests 18-24 months is typical for platforms starting from zero, assuming consistent marketing investment and favourable market conditions.
Industry analysis from Finance Magnates suggests that copy trading platforms launching without pre-existing signal provider networks typically require 18-24 months to reach critical mass, with many failing to secure adequate runway before achieving sustainable growth.
Many brokers don’t have this runway. Management loses patience. Resources get reallocated. The platform gets deprioritised before it has a chance to succeed.
Some platforms take a fundamentally different approach. They launch with existing strategy networks already in place.
Day one, they have thousands of strategies available.
Day one, copiers find immediate value.
Day one, signal providers find an established audience ready to follow.
This isn’t about marketing efficiency. It’s about whether the platform can activate network effects immediately or whether it needs to spend months or years in the valley of death hoping to reach critical mass.
The empty platform problem isn’t a temporary launch phase issue. It’s a structural barrier that determines whether most copy trading initiatives succeed or fail.
For brokers evaluating copy trading platforms, the question isn’t “how do we build it?“
It’s “how do we ensure it has value from day one?“
Different question. Different solution. Different probability of success entirely.
Platforms that solve the empty platform problem launch with momentum already built in, bypassing the valley of death completely.
Copy trading involves significant risk. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how copy trading works and whether you can afford the high risk of losing your money.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation. Any references to past or future performance of a financial instrument are not, and should not be taken as a reliable indicator of future results.