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Matchmakers/Platform Companies - Modern Monopolies

Read the wonderful book: 

The Matchmakers: The New Economics of Multisided Platforms

 

Today's turbocharged matchmakers, the so-called platform companies have great indirect positive network effects.


Matchmakers have existed in the past, since millenia. Today, with new tech, internet, smartphones, OS etc, things have got turbocharged.

These are easy to understand, but many will fail, not scale up, not reach critical mass

Important questions to ask for these multi-sided platforms ?

1. Is it solving a signficant friction/problem

2. Who are the participants ? How do they benefit frm the platform

3. Does it have indirect positive network effects ?

4. How will the platform reach critical mass, how will it get ignited

5. Is there a subsidy side, money side. How is the pricing going to be ? How will it generate value for all stakeholders (sometimes, these pricing r counterintuitive..by giving cashback to one side of participants, u may feel bus. is not doing right thing )


Buzzwords: 

Critical Mass, Ignition, Friciton solving
Creative destruction and transformation
Advertisers supported, Sharing economy, Uberization, Subsidy side

Tencent, Windows, OpenTable, Amazon, ebay, uber, ola, zomato, airbnb, facebook, insta, matrimony, alibaba, Google, Apple , Microsoft, Youtube etc are examples


Even age old hatta (santha) was matchmaker. Pubs etc are matchmakers


One set of participants increase, may attract more participants from other side nd vice-versa



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