Let's Get a Two-Sided Platform Started: Tactics to Solve the Chicken and Egg Paradox

Let's Get a Two-Sided Platform Started: Tactics to Solve the Chicken and Egg Paradox

Daniel Trabucchi (Politecnico di Milano, Milan, Italy)
Copyright: © 2020 |Pages: 15
DOI: 10.4018/JBE.2020010104

Abstract

Two-sided platforms are becoming more and more relevant in the modern economy, with leading examples like Airbnb or Uber. These companies can leverage several opportunities, which are intrinsic in their nature, but they also need to face severe challenges before reaching a critical mass and a mature stage. One of the greatest challenges is represented by the chicken and egg paradox, which refers to the need of the platform provider to convince both sides to join the platform even if it is worthless since the other side is not there. Previous studies provided examples of possible strategies to address it, but there is a lack of operational tactics that practitioners may use to direct tackle the challenges. Through the analysis of 16 case studies based on primary sources, this study presents seven tactics, then clusters in three groups. They are discussed according to previous literature drawing reflections on the characteristics of the two-sided platform and their business model implications.
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Theoretical Background

This research is grounded in the literature on two-sided platforms. The first section deals with the definition and the main characteristics of two-sided platforms. The second section focuses on the chicken and egg paradox.

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