Business Models
Platform Business Model
Also Known As Multi-Sided Platform
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A platform business model, also called a multi-sided or two-sided platform, is an intermediary structure in which a company generates value primarily by facilitating direct interactions or transactions between two or more distinct groups of users, such as buyers and sellers or riders and drivers. The platform itself may not produce the underlying goods or services but earns money by lowering the cost of finding and transacting with the other side. Scholars did not begin treating platforms as a distinct business model until the 1990s, when sites such as Craigslist and eBay emerged.
Facts
Partially Attested
Origin YearMarks the year Jean-Charles Rochet and Jean Tirole published 'Two-Sided Markets: A Progress Report', the paper credited with formalizing platform/two-sided-market theory in economics. Platform-shaped businesses (credit card networks, newspapers selling to readers and advertisers, early online marketplaces) predate this academic formalization by decades; this year marks the theory's origin, not the first platform business. Core MechanismThe platform earns profit by facilitating interactions between two or more distinct user groups whose combined participation generates network effects that increase the platform's value to each side. 1 Cross-Tradition Connections
Associated With
Amazon is named directly by the source article as a platform business, alongside Airbnb, Uber, Microsoft and Google.
Platform businesses, which create value by facilitating exchange between two or more customer groups, are a common vehicle for the venture founding that defines entrepreneurship.
Contains
Sources
1. Wikipedia, Two-Sided Market
WikipediaLead sectionQuote, Lead section
A two-sided market, also known as a two-sided network or two-sided platform, is an intermediary economic platform that connects two distinct user groups and creates value by enabling interactions between them.
1. Wikipedia, Two-Sided Market
WikipediaDefinition sectionQuote, Definition section
An intermediary economic platform that connects two distinct user groups and creates value by enabling interactions between them.
1. Wikipedia, Two-Sided Market
WikipediaTheory sectionQuote, Theory section
The concept of two-sided markets has been developed extensively in the economics literature, particularly through the work of French economists Jean-Charles Rochet and Jean Tirole.
Wikipedia, Platform Economy
WikipediaHistory sectionQuote, History section
It wasn't until the 1990s that scholars began to focus on platforms as a distinct business model.
Wikipedia, Platform Economy
WikipediaAssociated With: Entrepreneurship, Business model sectionQuote, Associated With: Entrepreneurship, Business model section
The platform business model involves generating profits by facilitating interactions between two or more distinct groups of users.
Wikipedia, Platform Economy
WikipediaAssociated With: Amazon, Introduction sectionQuote, Associated With: Amazon, Introduction section
These platforms, such as Amazon, Airbnb, Uber, Microsoft and Google, serve as intermediaries
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