Two-Sided Markets
A two-sided market is an economic platform that connects two distinct user groups, facilitating interactions between them. Examples include credit card companies that link consumers and merchants, or online marketplaces that connect buyers and sellers. Each group benefits from the presence of the other, creating a network effect that enhances the value of the platform.
In a two-sided market, the platform typically charges one or both user groups to access its services. This pricing strategy can vary, with some platforms offering free access to one side while monetizing the other. Successful two-sided markets thrive on balancing the needs of both groups to maintain engagement and growth.