The two sides of a marketplace are buyers and sellers. Successful 2-Sided
Marketplaces like Craigslist are very difficult to disrupt. To break them
apart you must have a better value proposition for both parties
simultaneously, or else nobody moves. Customers are there for the
vendors, and vendors are there for the customers. One won’t leave without
With a 2-Sided Marketplace, the network is what provides the majority of
the value, not the app or website itself — which explains why marketplaces
products like eBay and Craigslist can afford to look essentially unchanged
after 16 years.Marketplaces come in more shapes than we might think.
Media companies, for example, are essentially 2-Sided Marketplaces.
Audiences (supply) come to the marketplace and sell their attention for
content experiences. Advertisers (demand) on the other side buy the
attention of the audiences. The greater the audience of a media company,
the more likely advertisers will be to spend any money on that media
company at all, and then the more money they will be willing to pay the
company when they do. “Sellers” i.e. readers/viewers have a direct positive
network effect for “buyers”, i.e. advertisers. And vice versa, because (in
theory) more advertising revenue gives a media company the resources to
produce better content.
1 . 2 - S I D E D M A R K E T P L A C E
Marketplace participants don’t always fall neatly into two categories.
Often there are multiple participants on one or the other side of the
marketplace that perform different functions.
For example, in a food delivery marketplace, you have one side that is
clearly the supply (restaurants), one that is clearly the demand
(customers). But what about the drivers? They help fulfill the supply, but
they have different incentives and monetization than the restaurants.True
n-sided marketplaces, however, tend to be market networks.
They help coordinate many suppliers/vendors around a complex, multi-
step process (such as wedding planning) using a SaaS workflow tool. For