What Are Some Common Challenges Platforms Face?

The most common issue that all platforms face is called the chicken-and-egg problem. A new platform needs to get both sides of its ecosystem on board. But which should it get first, its consumers or its producers?

Without users on one side of the ecosystem, there is little incentive for users on the other side to sign up, and vice versa. Developers aren’t going to make apps for a platform with no customers. And consumers won’t use a marketplace with no sellers.

This is the core of the chicken-and-egg problem: How can you overcome the negative feedback loop that keeps both consumers and producers away from your platform in it’s early stages?

There are a few essential strategies for dealing with the chicken and egg problem. We’ll explore these in more detail in another video.

Filed under: Platform Innovation | Topics: chicken and egg, platform economics, Platform Startup Advisory, platform thinking, platforms