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 multisided 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 multisided platforms and discover their principles, and who've consulted for some of the most successful platform businesses in the world, explain how matchmakers work best in practice, why they do what they do, and how entrepreneurs can improve their chances for success. Whether you're an entrepreneur, an investor, a consumer, or an executive, your future will involve more and more multisided platforms, and "Matchmakers"--rich with stories from platform winners and losers--is the one book you'll need in order to navigate this appealing but confusing world.
Matchmakers have been around since the dawn of time, but in recent years they have turbocharged their business growth leveraging all the latest technologies.
Matchmakers, marketplace operators or platform developers are all focused on connecting demand with supply, offering access to two groups and often subsidizing one to ignite the business. OpenTable, Uber, Amazon Marketplace, GrubHub are just some of these successful matchmakers.
Richard Schmalensee and David S. Evands, authors of Matchmakers: The New Economics of Multisided Platforms, give a systematic account of multisided markets with a thorough explanation of deeply rooted historic origins where appropriate. In this easy-to-read book, the two distinguished economic advisers compile several examples of successful marketplace operators to illustrate how startups can learn from these businesses and boost their own chances of success.
David S. Evans is an economist, business adviser, and entrepreneur. He cofounded, and helps lead, two consulting organizations: Global Economics Group, which provides economic expertise on antitrust and regulatory matters, and Market Platform Dynamics, which advises companies on multisided platform strategies. He is also Chairman of PYMNTS.com, a multisided media and data analytics platform he cofounded. He has consulted for many of the largest multisided platform businesses in the world and served as an adviser to a number of start-up matchmakers. In addition, David has an active academic career. At the University College London he is Executive Director of the Jevons Institute for Competition Law and Economics as well as a visiting professor. He is also a lecturer at the University of Chicago Law School. David is the author, coauthor, or editor of ten books and has written more than one hundred scholarly articles, many of which address the economics of entrepreneurship, business dynamics, and multisided platforms. He is a graduate of the University of Chicago, from which he earned a BA, an MA, and a PhD, all in economics.
Richard Schmalensee is Howard W. Johnson Professor of Economics and Management, Emeritus at MIT. He has served as a member of the MIT Energy Council and was Director of the MIT Center for Energy and Environmental Policy Research for 12 years. He served as the John C Head III Dean of the MIT Sloan School of Management from 1998 through 2007. He was the Member of the President’s Council of Economic Advisers with primary responsibility for energy and environmental policy from 1989 through 1991. Professor Schmalensee has published 11 books and more than 120 articles; his work focuses on industrial organization economics and its policy applications, with a recent focus on energy and environmental policy. He was co-chair of the MIT Energy Initiative study The Future of the Electric Grid and chair of the The Future of Solar Energy. He is a Fellow of the Econometric Society and the American Academy of Arts and Sciences, a Director of the National Bureau of Economic Research, and Chairman of the Board of Resources for the Future.
“A must-read business book for ambitious entrepreneurs … thought-provoking insight into what’s behind the exponential growth of the companies in whose footsteps we’re following. It’s a portal through which to view the economy of the future.”
“Matchmakers sheds light on some of the most important businesses driving the global economy. A great read for anyone who wants to better understand how the companies behind the products and services they use every day work.”
“Matchmakers is an insider’s look at one of the critical business models of our era—one that only looks easy because the drivers around successful multi- and two-sided networks are anything but self-evident. It’s an entertaining read, yet filled with the insights essential for anyone interested in starting or scaling these complex yet powerful businesses.”