Multi-Sided Markets: a thought exercise

One of the most interesting things about plane flights is the time to actually sit and ponder.  Perhaps it is the disconnected nature…perhaps it is the compressed air…or, most likely, it is the fellow sitting next to me with his elbow partly into my seat that causes me to find things to distract focus.  And, at least in my case, the most distracting thing (or engrossing) is to dig through my offline google reader.

On this particular flight, I started my reverie by contemplating the time I spend discussing multi-sided markets.  In fact, I even created a brief list of terms I use frequently (found by digging through my e-mail):

  • platform audiences
  • ecosystem participants
  • multi-sided market
  • catalyst nature
  • aligning the interest of multiple audiences
  • technology enabler

In each of the above cases, the general context is a discussion of what IP Commerce, and other companies, are doing in a complex ecosystem.  Quite frankly, and this is probably a topic for later perusal on this blog, I find I the most compelling concept that of aligning the interest of multiple audiences.

So, with that background, imagine my surprise when I find a new “term” in my rss feeds. 

<clip> Network-Enabled Services. Our investments connect things and we monetize those connections by delivering a service that is of value to the multiple sides of a multi-sided market. </clip>

That brief clip is from a blog that was recently started by one of the firms that has invested in IP Commerce, Meritage Funds.  You can read the entirety at the new Meritage Funds Blog.  Perhaps the most intriguing element of the post, is the quote which the author uses to discuss one of the most common questions about a multi-sided market (Which came first…you know the rest):

Forget the chicken and the egg.  It’s all about getting a hen and a rooster in the same place at the same time.  -Chip Kahn, CEO IP Commerce

Perhaps that explains my fascination with the concept of alignment of interest among audiences…I hadn’t heard that particular quote before, but the concept is definitely baked in the IP Commerce DNA.

Again, more to come in the future…just a few thoughts from an uncomfortable flight.

What’s your perspective? Agree? Disagree? Anything to add? Critiques?
The comment form is below. . .

(Seat 9A – SEA to SFO)

July 23, 2008

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