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09-14 Single_And_Multiple_Side_Markets

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    One of the things I just want to reemphasize because we mentioned it earlier
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    is the difference between single-sided markets and multi-sided markets.
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    Now, in single-sided markets the customer is the user and the payer.
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    That's a single-sided market. There are no separate users, and there are no separate payers.
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    You're it. Congratulations. You're the customer and you're going to pay for it.
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    But in multi-sided markets there might be users,
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    but they're also might be very separate people who are payers.
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    The example we keep using is Google,
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    because everybody around the world has probably had at one time or another
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    been a Google user.
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    When you use the Google search bar you're one side of a multi-sided market.
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    You're the user, but you're not the payer. You're not paying for the product.
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    But in reality, you're paying implicitly,
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    because there is another side.
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    The other side are the people using Google Adwords
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    to look for keywords.
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    In multi-sided markets the company, your startup,
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    typically cares about acquiring a massive amount of users
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    and then figuring out how to monetize those users next.
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    Google decided to go from millions and then tens of millions of users,
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    and then the keywords came after.
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    Now, depending on your investors, this might be their strategy.
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    I tend to prefer that we actually try to look for who the payers are as early as possible,
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    but this is a question you might want to ask your investors.
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    Do we go for lots of users and then say if we get 10 million people
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    the revenues will come?
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    Or do we want to look at both sides of the market at the same time?
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    Again, if you're in a physical channel,
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    my suggestion is you want to take a look at users and payers simultaneously.
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    If you say your business is advertising-based,
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    some of the tactics are how do you get to 10 million monthly users?
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    How do you become one of the top five websites?
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    And how much do the payers actually pay?
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    Now, if you wait 2 years to find this out,
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    you might have gotten 10 million of the wrong users.
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    Your job is not only to talk to the users in a multi-sided market.
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    You're job is to get out of the building and talk to the payers.
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    Because you have a hypothesis, an important one,
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    which is how much will those payers pay for the users you think you're collecting.
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    Guess what?
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    If you're wrong, the time to know about it is now, not two years from now,
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    and it's okay to be wrong,
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    because most startups all you have is a series of hypotheses,
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    and it's really easy to get caught up in the passion that says,
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    well, if we get all these people obviously these people will pay us lots of money.
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    But as soon as we get out of the building that obviously might turn into maybe not.
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    What we want to do is get the facts as quickly as we can
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    and then iterate and pivot.
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    So, don't worry if your assumptions were wrong here on your revenue model.
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    You just want to find it out before you start burning a lot of cash
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    and building a lot of value prop around the wrong model.
Title:
09-14 Single_And_Multiple_Side_Markets
Description:

09-14 Single_And_Multiple_Side_Markets

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Video Language:
English
Team:
Udacity
Project:
EP245 - Lean Launchpad
Duration:
03:14
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