The peer to peer economy

There is a long standing business model commonly called two-sided market. These companies have 2 different customer segments and the platform offers value by matching them up.

-Credit card companies (matches consumers and banks)

-Operating system like Windows, and Apple ios (matching software dev companies and consumers)

-Gaming platforms like XBox, wii, and PlayStation (matching consumers and game dev companies).

-Advertising platforms like tv networks, newspapers, and google (match consumers with advertisers)

These types of markets increase in value as they gain users creating a network effect. They also have the chicken and egg problem, they need users to make it attractive to users.

There is an emerging group of two-sided markets on the internet. Some are calling it the peer to peer economy. Here are a few thoughts...

- They rely on reputation systems and search.

- They make money by taking a percentage of the transaction.

- The users aren't likely to do business again, which increases value of reputation system.

- Often transaction done without the users meeting face to face. If the users do meet, like airbnb and uber, steps are taken to prevent users from bypassing the system and transaction fees.

ebay - matches buyers and sellers.

elance - matches professionals with people needing work done.

99designs - matches designers with consumers.

prosper.com - matches lenders with borrowers. eliminates banks.

uber - matches drivers and passengers. eliminates cab companies

airbnb - matches travelers with people renting their space.

openmile.com - matches truck drivers with shippers. eliminates brokers.

khan academy - matches students with tutors.

babysitters.com - matches baby sitters with parents.

etsy - matches buyers and sellers of handmade and vintage items.