Industry platforms
Differentiating between suppliers and partners in a two sided market
Partners
earn proportionally to your revenue
has access to your customers
no contractual obligation
has network effects
Suppliers
earn directly from you
detached from your customers
contractually bound
no network effects
Network effects
actions by others create value for you
eg
my mom joining a network means I can call her for free
how much does an additional user increase the value of other users
how much does an additional user increase the demand for the other market side
Feel the marble
opening up your environment, others need to believe
rules will be evenly enforced
you won’t compete against them
Industry platforms are high risk
Only 17% succeed (sample of 250 firms)
average lifetime 5 years
reasons
mispricing on one side
failure to develop trust
prematurely dismissing competition
entering too late
https://hbr.org/2019/05/a-study-of-more-than-250-platforms-reveals-why-most-fail