Breeding strategy for the platform - solving chicken and egg problems

Attracting new users for an unknown business is the hard work that startups always face. This problem becomes even more complicated when business is based on a platform model. Once propagated and reached critical mass, a platform or a network business (network business) becomes a great job. But breeding for the foundation from zero is a very complicated job and also a time to bring many businesses to a failure. There are 4 issues that platforms often encounter and below will be the resolution strategy.

The problem of mutual bait - No production means that there is no consumer

The 2-way business consists of producers and consumers, each side plays a separate role.For two-way business to operate, both producers and customers must be on the same platform. However, the manufacturer will not go to the platform if there are no users and vice versa. Consumers act as a "bait" to "lure" producers and vice versa. This is the problem of mutual bait that such networks encounter and must overcome to be able to propagate for the platform and "light up" for interactions. This issue is still called the "chicken and egg problem", although not really accurate because the problem is not really about getting the first party but trying to bring the two sides closer together and attract together.

See also: Producers - Users - Customers - Who are they?

Strategy to solve problems

Because the user is a decoy with the producer and vice versa, the problem will be solved when creating alternate bait for one of the two parties. Breeding can be done by:

1. Put decoys for consumers
2. Give the bait to the manufacturer
3. Give primers like for any party that is harder to breed

Once you have a party, it will act as a decoy for the other party and bring them to the platform.

Ghost town problem - No additional products

Often the platform has no standalone value. For example, Wikipedia will be completely invalid if no content contributors or AirBnB is completely useless without rented listings. A user base on the platform (acting as a producer) creates content and products to consume. Therefore, at the beginning, the foundation was just a "ghost town". Users visiting the platform will not see any activity, so there is no value on the platform. Producers will not contribute anything if they have not seen any interested consumers. As a vicious circle, the ghost town will continue to be a ghost town. The challenge is to create an additional product or content on the platform from the first day to break this vicious cycle .

Strategy to solve problems

Successful platforms overcome ghost township by creating additional products for themselves or encouraging producers to create additional products right from the start.

1. Providing services for producers to interact with consumers.
2. Provide access to a new production infrastructure for users to use even if it's a ghost town.
3. Create related activities as a sign.
4. Create "player" points only.
5. Convert consumers into producers.

Double business problem

Building a new business requires attracting and caring for the user base. For two-way businesses, the problem becomes even more complicated when two groups of users need to attract and care. This in the early stages of the platform breeding process is twice as difficult as building other business models.

Strategy to solve problems

Successful platforms solve this problem by not going into the "dual business" path. They try to focus on one group of users at a time. Strategies can be:

The previous producer

1. Multiplication of producers by a separate regime.
2. Self acts as a producer on its platform.

Customers first

Try to encourage consumers.

Build both sides

1. Provide a user utility and then convert it to multi-user mode (from application to connected network).
2. Focus on niche groups and serve well that group.
3. Turn 2-dimensional platform into 1 dimension.
4. Do not simultaneously change the behavior of both parties at the same time.

Problem critical number

Platforms and networks are not one-way services.Services on the platform are provided by producers and the platform creates value to help the two sides interact with each other. On eBay, a person looking for an Angry Birds-shaped bubble needs to be paired with someone who sells the product, the new transaction is done. On Quora, a question must be matched with the most relevant user to be answered.

In order for a network business to be successful, it is necessary to match the right producers with the right consumers. As the number of producers and consumers paired up, helping to increase transactions, the user base followed and grew. This makes new startups feel extremely difficult because they do not get enough members on both sides to create a start-up spark. Critical mass is the minimum user base size at which there are enough producers and consumers.

Strategy to solve problems

1. Towards the niche market group.
2. Exploiting the underlying network structure.
3. Group solved this problem by creating a spotlight trade of the market right from the first day to be able to "light up" other transactions.