The Platform Business Model: Solving the Chicken-and-Egg Problem

Abstract

The use of every multi-sided platform lies in the presence of users on either side of the platform, as that initiates the value creation. During the launch phase, almost all platform service providers face the same challenge of attracting enough users to their platform. This issue is also known as chicken-and-egg problem. Users on one side are attracted to the platform because it enables them to interact with users on the other side. Likewise, the users on the other side wish to interact with users from the other side of the platform.
This study aims to research strategies and tactical decision-making that platform service providers can implement to strengthen their customer acquisition efforts. This study conducts case studies with the Dutch company Skydreams B.V. and the Danish company Codeable ApS.
The study will answer the research questions: (1) How is a platform business implemented?, and (2) How can a platform provider overcome the chicken-and-egg problem?
In the past, existing literature has already discussed this difficulty, although not as extensively as other areas. Hence, the problem of solving the initial customer acquisition, namely the chicken-and-egg problem, requires more research to be fully understood. The purpose of this thesis to contribute to this research.
The theoretical framework for this thesis is set to analyze which tactical decisions and strategies can be utilized to manage the customer acquisition for multi-sided platforms successfully. Different strategies will be outlined in this thesis and identified and analyzed in the researched case companies.
Appreciation