Two-Sided Marketplace

Also called Two-Sided Market

A marketplace serving two distinct groups who need each other, riders and drivers, guests and hosts, where each side becomes more valuable as the other grows.

Why it matters

Two-sided marketplaces have powerful network effects but a hard cold-start: neither side shows up without the other. Founders usually solve it by focusing on one side or one narrow market first, then expanding.

For example

Uber needs both riders and drivers; it seeds one side with incentives until each becomes valuable enough to attract the other.

Worth your time

All Markets Are Not Created Equal Above the Crowd · article Gurley's ten factors for judging a marketplace apply directly to two-sided models, where liquidity on both sides is what makes one work.

Related terms

Marketplace Network Effects Beachhead Market

Go deeper

See how founders actually handle this on Growing and marketing, part of the Starting Up hub.

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