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Multisided Platforms: Evaluating launch conditions deals with a specific type of organisation, the multisided platform that operates in multisided markets with positive feedback effects. These are some of the most exciting and valuable but rare organisations. Examples can be found in a variety of settings from postal delivery, shopping malls, print publishing, open source software projects, through to internet based social media, to name a few instances.
The challenges in establishing a business venture of this type are quite unlike those faced by other organisations. Be under no illusion, the likelihood of success in creating a multisided platform with positive feedback effects is small. The reason for this is that to launch, the platform must overcome the obstacle of reaching critical mass. To do this, the platform’s products must offer enough benefit to each of the multiple parties transacting over it for them to change their current behaviour and join the platform, and then want to remain on the platform.
Multisided Platforms: Evaluating launch conditions describes a method to identify multisided market opportunities and assess whether there are prospects of it being developed into a multisided platform with positive feedback effects.
Multisided Platforms: Evaluating launch conditions explains the positive cross-group effect, and the declining cost economies phenomena which successful platforms exploit. A framework to model the role of price in the launch of a multisided platform with positive feedback effects is described. The framework is applied to the launch challenge faced in establishing a new multisided platform.
