TLDR  Balding doesn't reduce the number of hair follicles, it just makes them smaller.   
  The document "Histological Findings in Androgenetic Alopecia" from 1995 concluded that the process of balding does not result in a decrease in the number of hair follicles, but rather a reduction in their size, a phenomenon first termed "vellus transformation" by Uno et al. in 1969.
          
     
    Caffeine can potentially treat common hair loss by counteracting hair follicle shrinkage caused by hormones.  
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  September 2019   in “Springer eBooks”                  January 2014   in “Medical Innovation of China”        
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  April 2011   in “Expert Review of Dermatology”    Male hair loss is caused by inactive hair follicle stem cells.  
            
           209 citations
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  September 2008   in “Dermatologic Therapy”    Androgens can both increase and decrease hair growth in different parts of the body.  
               13 citations
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  January 2008   in “Springer eBooks”                                January 1996   in “Springer eBooks”                  January 1996   in “Springer eBooks”                  January 1989   in “Springer eBooks”