On the relative ease of growth and user involvement in local responsive, two-side business models

Abstract

Platform businesses are anticipated with capacity-limit free, rapid growth and almost zero marginal costs. However, the implementation of a platform business and the inherent need to address the need and requirements of more than one customer group is a major challenge. Many companies struggle to establish a working platform, and several have even failed miserably. Particularly for platforms which must respond to specific local requirements it is essential to develop effective mechanisms to avoid growth limiting effects. Reaching a critical user mass and establishing a community where users of the platform actively engage is a key issue for any platform but particularly for local responsive platform businesses to counteract the with the local responsiveness anticipated costs. This thesis covers the case of CHillO, a platform business idea, that operates in the matchmaking market which must consider the aspect of local responsiveness to be successful. Today match-making is used in countless situations and in many ways. It’s all about bringing people together efficiently based on relevant information for the specific case. Most of today’s matchmaking services focus on connecting adults for the sake of finding business partners, employees, dates or life partners. CHillO extends the traditional approach to parents with kids seeking playfellows and family-friendly activities nearby. The mobile service is an easy 1-2-meet solution which incorporates family-friendly meeting places for families to have a joyful quality time. As such, CHillO will do the same as Uber does with taxis: It makes visible what is already there – playfellows, parents in a similar situation and play activities. This thesis combines a mix of theory and empirical work to answer these questions • How to build a scalable but local responsive platform business and its specific application to CHillO? • What are important factors that promote user engagement and how to generate revenues in platform businesses? • What are potential user groups, which are the most valuable user groups and which functionalities are valued the most? The result of this thesis is a scaling strategy, a user engagement strategy and a business plan for the first three years of operation of CHillO.