For centuries, the term "matchmaker" conjured images of a bustling village intermediary, perhaps holding a parasol, arranging marriages between families of compatible social standing. They were agents of information in a world where finding a partner was inefficient and socially fraught. Today, the matchmaker has shed the parasol for an algorithm, and the scope of their work has expanded far beyond matrimony.
Consider the evolution of the taxi industry versus Uber. A traditional taxi company owns cars and employs drivers. It is a one-sided business selling transportation. Uber, conversely, owns no cars and employs no drivers (in the traditional sense). It creates a digital marketplace where people with cars and free time meet people who need a ride. Uber is a matchmaker. Its product is the reduction of "friction"—the time, effort, and cost required for these two groups to find each other.
This is the impact of Group A on Group A. Usually, these are positive, but not always. Matchmakers- The New Economics Of Multisided Platforms
Evans and Schmalensee identify three critical factors that make multisided platforms different from traditional businesses: 1. Indirect Network Effects
In the modern economy, matchmakers are the titans of industry. They are the platforms that connect riders to drivers, guests to hosts, gamers to opponents, and advertisers to consumers. Companies like Uber, Airbnb, Tinder, and Google are not traditional producers of goods; they are architects of connection. They operate in the realm of "Multisided Platforms" (MSPs), a business model that has fundamentally rewritten the rules of economics. For centuries, the term "matchmaker" conjured images of
How matchmakers have evolved from village introducers to the dominant business model of the digital age.
To survive in the new economics of multisided platforms, you must abandon the linear mindset. You are not a seller of widgets; you are a . Consider the evolution of the taxi industry versus Uber
Traditional businesses set a total price. Matchmakers set a structure – how to allocate cost/benefit across sides.
No. Platforms die by becoming bloated. The goal is to reduce transaction costs. Instagram succeeded because it removed the confusion of early Flickr. The platform must be a toll bridge, not a Swiss Army knife.