platform business model
A platform business model connects two or more groups, typically buyers and sellers, allowing them to interact and transact directly. Instead of selling products or services themselves, platforms provide the technology and framework for these interactions. Examples include online marketplaces like Amazon or Airbnb, where users can offer and purchase services or goods. The platform earns money by charging fees or commissions for transactions made through it. This model leverages network effects—meaning the more users there are, the more valuable the platform becomes. This creates a dynamic ecosystem that benefits all participants.
Additional Insights
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A platform business model connects two or more groups, typically users and providers, facilitating their interactions. Instead of creating products, platforms focus on creating an environment where these groups can meet and exchange value. For example, ride-sharing apps connect drivers with passengers, while online marketplaces link buyers with sellers. Platforms often earn money through fees, subscriptions, or advertisements. They thrive on network effects, meaning the more users they have, the more valuable the platform becomes for everyone involved. Examples include Airbnb, eBay, and social media networks.