Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You: How Networked Markets Are Transforming the Economy―and How to Make Them Work for You

by Geoffrey G. Parker

These founders shouldn’t charge either side to be listed on their platform. Doing so would put terrible friction on entry into the ecosystem, discouraging many potential participants from becoming users. To charge for posting a deal simply means people post fewer deals. That’s bad. It reduces potential interaction volume, not to mention realized interactions. As a result, it also reduces the volume of data available to the platform—data desperately needed to enable the platform to forge powerful matches between consumers and producers. In fact, rather than charging users to join the platform, the founders should be subsidizing their participation—perhaps by providing tools and services to make it easy, fast, and effective for them to complete their profiles.