Platform & network effects · strategy atlas
Two-sided market balancing
what it means
Deliberately subsidising or prioritising whichever side of a marketplace is currently the scarcer, harder-to-attract side, since a two-sided market grows only as fast as its more constrained side.
a real example
Food delivery platforms have often subsidised restaurant onboarding or delivery riders more heavily than customer acquisition, whichever side was the actual bottleneck to more completed orders.
when to use it
Any platform business — identifying and subsidising the genuinely scarcer side, rather than spreading resources evenly across both sides, unlocks growth faster.
when it backfires
Subsidising the side that's already abundant, out of habit or convenience, wastes resources on a side that was never actually the constraint.