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Two-Sided Markets: Density

Density

...continuing from my last post.

Once you have figured out which side of the network you need to seed first, the next step is to identify which dimension of that population in which to create density. By density I mean concentration across a specific dimension of the population. For example, if one side of your network included a diverse set of service providers, density could be created by acquiring a significant portion of the population that focuses on a particular type of service or by on-boarding diverse types of services providers in a specific geography.

The key to determining which dimension of the population along which to create density lies in understanding how density can make the service more attractive to the side of the network which will be more challenging to attract. For example, if the hard to attract side of the network purchases offline then you’ll probably want to start by acquiring lots of service providers in a specific region.

Building a two-sided network is challenging. If you can strategically build density in the right side of the network and along the right dimensions of the population you may be able to achieve critical mass a bit easier.

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