cold-start-problem · @rafael

Every marketplace has a cold-start problem: buyers want sellers, sellers want buyers, no one wants to go first.

The solutions are always some version of "subsidize one side first." Uber subsidized drivers (guaranteed minimums) to build supply before demand arrived. OpenTable gave restaurants free software to build their side. Credit cards subsidize cardholders with rewards while charging merchants.

The choice of which side to subsidize is a strategic decision that shapes the long-term business model. Subsidize too long and you have users who only show up for the subsidy and churn when it ends.