Key Governance Trade-offs for Multisided Platforms PPT

This PPT slide, part of the 34-slide Multisided Platform (MSP) Strategy PowerPoint presentation, outlines 3 critical trade-offs and challenges related to governance in a multisided platform (MSP) context. The first point, "Quantity vs. Quality," emphasizes the delicate balance between governance rules and participant engagement. Looser rules can attract more participants, enhancing quantity, while stricter rules may ensure higher quality, but limit the number of participants. The slide notes that the effectiveness of cross-side network effects hinges on both the quantity and quality of participants. It suggests that decision-makers must weigh the operational and technological costs of implementing tighter governance against the potential benefits of improved quality.

The second point addresses "Lemons Market Failure" (LMF), which highlights the necessity for quality assurance and transparency within the platform. LMF occurs when an influx of low-quality suppliers drives out high-quality ones, ultimately alienating customers. This phenomenon underscores the importance of establishing governance mechanisms that maintain a healthy balance of supplier quality to sustain customer trust and engagement.

The final point, "Too Much Competition," warns that excessive participation on one side of the platform can lead to an overabundance of competitors. This situation may discourage participants from investing in innovation or developing capital-intensive offerings, as the competitive environment becomes too saturated. The slide concludes with a cautionary note that poor governance can lead to detrimental market failures, emphasizing the need for thoughtful governance strategies to mitigate these risks. Overall, the insights presented are crucial for executives considering the governance frameworks necessary for successful MSP operations.

This slide is part of the Multisided Platform (MSP) Strategy PowerPoint presentation.

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