Startup Funding Espresso Network Effects in Marketplace Businesses
Network Effects in Marketplace Businesses \xa0 Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. \xa0 Marketplace businesses derive value from the network effects that come with matching buyers and sellers. \xa0 The greater the number of buyers and sellers the more attractive the platform. \xa0 One side of the marketplace can attract the other side. \xa0 If one side is using the software platform, then the other side will follow. \xa0 One side can demand the other use the platform as the financial transaction or the flow of goods and services goes through it. \xa0 Marketplace businesses can use network effects to connect more suppliers to the business as well. \xa0 By connecting suppliers through the software platform you can decrease costs and increase the size of inventory. \xa0 Marketplaces with network effects give the business a moat against competition as the competitor is not competing against one company but rather a network of companies. \xa0 Marketplace businesses can use the network effects to create new products and services by bundling together a collection of services from multiple suppliers. \xa0 Marketplace businesses can scale faster and cheaper because they are aggregating supply from multiple businesses rather than just their own business. \xa0 Finally, marketplace businesses use network effects to retain users as it\u2019s sticky. \xa0 Once in place, network effects can bring exponential growth to the business. \xa0 Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding. Let\u2019s go startup something today. _______________________________________________________ For more episodes from Investor Connect, please visit the site at: \xa0 Check out our other podcasts here: \xa0 For Investors check out: \xa0 For Startups check out: \xa0 For eGuides check out: \xa0 For upcoming Events, check out \xa0\xa0 For Feedback please contact info@tencapital.group\xa0\xa0\xa0 Please , share, and leave a review. Music courtesy of .