As I explained in my last post, the “marketplace matrix” is a great framework to get a quick understanding of the strengths and weaknesses of marketplace startups. Combining both defensibility and scalability of unit economics gives us a more holistic, but not yet comprehensive, view of these businesses. Interestingly, the core tenets of this framework are not restricted to marketplaces and can be extended to other types of network-based businesses as well (1-sided, 2-sided or multi-sided networks). But moving from the subset of marketplaces to the superset of networks requires the introduction of new concepts. I’ll explain these by looking at some well-known names in the social media space, and then extend these ideas to other network-based business in far-flung spaces, from payments to online gaming.
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