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Short overview of two-sided markets. Often referred to as "free versus paid" business models, two-sided markets power many companies based on open source, closed source, web services, telephony, gaming, and are bound to expand to new industry over the course of the century. More information at nicolaspujol.com.
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Two-sided market strategies
Business Models
© Pujol Enterprises LLC, http://nicolaspujol.com
© Pujol Enterprises LLC, http://nicolaspujol.com
Model X: cross subsidy
Buyer Seller
Product A (free)
Product B (paid)
$ Payment
Inextricable bond
Immediate or deferred consumption
One-sided model, but shares some dynamics with two-sided markets
Model 1: Platform
© Pujol Enterprises LLC, http://nicolaspujol.com
User (A)
User (B)
Platform company
Time & mind share
Platform service fee P(B)
A-B interaction
Free good P(A) to user
© Pujol Enterprises LLC, http://nicolaspujol.com
Model 2: Freemium
Users Company Free good
(A)
Mind share
Buyers
Conversion rate
Payment for premium good
Premium good (A+, or B)
Freemium differentiation alternatives
© Pujol Enterprises LLC, http://nicolaspujol.com
CORE (A)
CORE (A+)
RELATED (B), SAME BUYER
RELATED (B), DIFFERENT BUYER
FEATURE DIFFERENTIATION TIME DIFFERENTIATION
Beta version (A) Stable version
trial (A)
Stable version (A+)
Enthusiast version (A)
Immediate data release
(A+)
Deferred data release (A)
