Cross-side network effects occur when the value of a product or service increases for one user group as a result of an increase in the number of users in a different user group. This phenomenon is crucial in multi-sided platforms where distinct user groups interact, such as buyers and sellers on an e-commerce site or developers and end-users on a software platform.

Cross-Side Network Effects

Cross-side network effects

value of a product or service

increase in the number of users

different user group

Multi-sided platforms are business models that facilitate interactions between two or more distinct but interdependent groups, typically creating value by enabling direct interactions between these groups. They leverage network effects, where the value of the platform increases as more users from each group join, often leading to a winner-takes-all market dynamic.

CUSTOMIZE YOUR LEARNING

CUSTOMIZE YOUR LEARNING

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