This was a reference book which I was expected to read to compliment an elective course, MPBS (Multisided Platform Business Strategy), which I took during my fifth term at IIMU. Back then I was overwhelmed by the case materials alone so I could not prioritise going through it, until recently.
Authored by David S. Evans and Richard L. Schmalensee, "Matchmakers" discusses multisided platforms. These are businesses that bring together two or more groups of customers onto a platform and enable favourable transactions between them.
According to the book they do it by - mitigating significant frictions (ÃŽ.e. transaction costs/hindrances), attaining critical mass (i.e. enough participants that generate value to the platform), identifying the right pricing level and structure, enabling an interactive ecosystem, fostering good governance and most importantly by solving the ignition problem (i.e. a state of profitable and self-sustaining growth).
All of these complex principles are explained lucidly through simple case studies by illustrating how a series of decisions lead to either success or failure of various multisided firms.
The authors conclude by asserting that many contemporary matchmakers still use the same primitive methods that have been in use for decades. However, recent technological advancements, such as the internet, smartphones, programming languages etc. have enhanced these methods. As a result, the turbocharged versions of these multisided platforms are bound to transform or destroy traditional competitor businesses or, in some cases, even coexist with them.
If you ever wondered what's common among businesses like newspapers, shopping malls, night clubs, gaming consoles, operating systems, food delivery apps, OTT platforms etc., you may want to read this book!
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