Review of Matchmakers

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Rating

9 Overall

9 Applicability

9 Innovation

8 Style


Review

David S. Evans, an economist, business adviser and entrepreneur, and co-author Richard Schmalensee, professor emeritus of management and economics at MIT, offer a revelatory textbook about multisided platforms, which they call “matchmakers.” Business students will revel in their straightforward, flowing prose style and direct presentation of complex business and technological issues. The authors include relevant, well-described case studies to illustrate their points. Unlike many business writers and textbook authors, Evans and Schmalensee have a lot of fun talking about a subject that at first glance might appear too complicated to present simply. Whatever word means the opposite of “pretentious,” that’s how Evans and Schmalensee write. Reflecting their mission to explain the real-world pros and cons of multisided platforms, these renowned experts never resort to jargon. Their profound understanding of their subject and their determination to provide practicable guidance make this a perfect introduction to and overview of today’s dominant business mode not only for students, but also for entrepreneurs and investors. Even people currently working on a multisided platform will find useful insights and advice.

About the Authors

Economist, business adviser and entrepreneur David S. Evans pioneered research into multisided platforms, consults with large companies in this area and advises start-up matchmakers. Richard Schmalensee, the Howard W. Johnson Professor Emeritus of Management and Economics at the Massachusetts Institute of Technology, is a leading scholar on multisided platform economics.

 

Connectors

Alibaba, Apple, Facebook, Google and Microsoft are “matchmakers” in Evans and Schmalensee’s construct. So are Airbnb, BlaBlaCar, Spotify, Uber, and otherd. Their business is matching – or “connecting” – suppliers with customers. Uber, for example, links people who are willing to sell rides in their cars with people who want to buy rides. Matchmakers function in “physical or virtual” spaces where suppliers and customers connect. The fact that these firms connect both sides of a transaction makes them “multisided platforms.”

Evans and Schmalensee contrast this model with “one-sided” “traditional” manufacturers and retailers that purchase raw materials and use them to build new things or that buy and sell products. It also differs from “two-sided” models, such as Open Table, which “brings dinners and restaurants together to interact directly” but “takes no part in transactions between them.”


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