Matchmakers: The New Economics of Multisided Platforms

Matchmakers, Evans and Schmalensee’s new book on multi-sided platform businesses, is available for pre-order on Amazon.com in the US.  

Many of the most dynamic public companies, from Alibaba to Facebook to Visa, and the most valuable start-ups, such as Airbnb and Uber, are matchmakers that connect one group of customers with another group of customers. Economists call matchmakers multi-sided platforms because they provide physical or virtual platforms for multiple groups to get together. Dating sites connect people with potential matches, for example, and ride-sharing apps do the same for drivers and riders. Although matchmakers have been around for millennia, they’re becoming more and more popular — and profitable — due to dramatic advances in technology, and a lot of companies that have managed to crack the code of this business model have become today’s power brokers.

Don’t let the flashy successes fool you, though. Starting a matchmaker is one of the toughest business challenges, and almost everyone who tries to build one, fails.

In Matchmakers, David Evans and Richard Schmalensee, two economists who were among the first to analyze platform businesses and discover their principles, explain how matchmakers work best in practice, why they do what they do, and why so many entrepreneurs fail to make this business model work.

Although the book is focused entirely on the business of matchmakers, it is essential reading for anyone—including lawyers, regulators and judges—who need to navigate the exciting but sometimes confusing world of multisided platform businesses, and the digital economy that centers around them.

Amazon and other booksellers will release hard copies and digital versions of Matchmakers at the beginning of May.