HBR on Two-Sided Markets
The October ‘06 Harvard Business Review had a great article entitled “Strategies for Two-Sided Markets” ($6.00, also available via Lexis, etc.), which I found through the Lightspeed Venture Partners blog. The authors dig into the big picture structural issues that face two-sided market platform providers like eBay and Craigslist, including subsidization/pricing, winner-take-all dynamics, and competitive envelopment. It’s the best summation of the structural strategic challenges that face market platform providers that I have seen, but while it does a good job of addressing the structural issues, it glosses over the challenge of generating traffic in the first place, which is the largest challenge that these systems face.
To mix overused metaphors: if you build it well, will they come…or will you be a well built tree falling in a forest with no one around to hear you?
