Two-Sided Market
Etymology
The concept was formalized by economists Jean-Charles Rochet and Jean Tirole in the early 2000s, notably a 2003 paper; Tirole later won a Nobel. The phrase plainly describes a market serving two interdependent “sides.”
noun phrase · /TOO-SY-did MAR-kit/
A platform that creates value by connecting two distinct groups who need each other, such as riders and drivers or buyers and sellers.
What it names
A handle for understanding the business logic of platforms — why they often subsidize one side to attract the other, and why getting both sides on board at once is the hard part.
Example
A dating app is a two-sided market: it is worthless to either gender until enough of the other signs up.
Related idea
It depends on a cross-side network effect — each new driver makes the platform better for riders and vice versa — but the two-sided-market idea adds the platform’s strategic problem of pricing and balancing the two groups.