Matchmakers make it easy for two or more groups of customers, like drivers and riders in the case of Uber, to get together and do business. They operate platforms that make it really easy, and really efficient, for people and businesses to connect and exchange value. Some of those platforms are physical, such as shopping malls, while others are virtual, such as operating systems.
Matchmakers are mainly about selling one group of customers, like restaurants with spare tables, access to another group of customers, like people who want to go out to eat. And often, as in the case of ride-sharing apps, members of both groups value access to members of the other. Sure, platforms sometimes sell products and services, like regular (single-sided) businesses, but they are mainly about selling ‘access’.
A lot of traditional business rules don’t hold as a result of this difference. For instance, the basic principle that a business should almost never sell products or services at less than cost doesn’t hold for multisided firms. Matchmakers often find it most profitable to subsidize one group of customers to participate in the platform so they can make money from charging another group for access to them.
For more reading see: Forbes Five Questions on Matchmakers with Evans and Schmalensee