Episode #8: Matchmakers – The Billion Dollar Business Model

Episode Notes

  • Hey there, I’m Matt Clark, and welcome to the “100 Books a Year” podcast.
  • In this episode we’re going to discuss “Matchmakers: The New Economics of Multisided Platforms” by David S. Evans and Richard Schmalensee
  • If you have not done so, please subscribe to the 100 Books a Year podcast  on iTunes or Stitcher to get all the episodes for free.
  • Matchmakers is all about platform businesses.
  • A platform business is one in which there are multiple parties – or multiple customers – being brought together by the platform owner.
  • An example of this is airbnb (brings together people with rooms to rent and people who want to rent rooms instead of staying at hotels).
  • Other platform examples.
  • This book is especially interesting to me because of what we’re building at Amazing.com. We’re building a platform to bring together entrepreneurs who want to share what they know with people who are building businesses and want real strategies from proven entrepreneurs.
  • Chicken and the egg problem of platforms.
  • Example: Open Table
  • Solution: Do deep in one area first
      • One city for restaurants
      • Facebook also did this (only Harvard, then only colleges)
  • Solution: Free to one side, paid to the other
      • Example: Google
  • Example: Alibaba (manufacturers vs. entrepreneurs)
  • Challenge: Achieving “critical mass”
  • Big question: “What friction are you removing?”
  • Reward: Can build a MASSIVE business (airbnb, uber, amazon, alibaba, etc.)
      • Can also do on a smaller scale (Thumbtack app)
  • If looking to build a BIG business, think about building a PLATFORM (or as the author’s call it, a “Matchmaker”) – the good thing is that now there’s more information about how to make this business model work

Closing:

  • If you got value from this episode and know someone else that would get value from it too, please share it with them.
  • Thanks for listening to the 100 Books a Year podcast. I’ll see you next time!

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