Building a business off the back of a platform strategy can be highly effective and very profitable – as the largest tech companies in the world will attest.
When a platform strategy based around a 2-sided market works, a virtuous circle of growth can be achieved whereby suppliers are attracted to the service because of the large number of buyers and vice versa. This is often referred to as cross-side network effects and is the basis for the combined $3 trillion market value of Facebook, Amazon, Google and to a lesser extent Apple. While the commercial attraction of building a platform is obvious, the practical reality of doing so can be complicated.
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Source: IT Strategy