2 Sided Market – How to Build a Startup
Now one other thing about the business model canvas in general, now that we've talked about customer segments is understanding that sometimes you'll have multiple customers, multiple segments, and it's kind of interesting to take a look at Google as an example. So, let's just take a look at Google search. Let's just think about who is the customer for Google search? It's anyone searching on a web or mobile and the product we have is a free search bar or free mobile app and what are the key resources? Well, they need software and software developers and installed user base but the key idea is this product is free and if you think about the cost directory for this, it requires massive data centers and software development and key activities or data center or speed but the key idea is the red new model is free but Google and Google search is one of the most profitable businesses on the face of the earth.
Well, how can Google do that? Well, think about it what we've just been doing is Google has been acquiring users, but someone else if paying for this product and that someone else is a different customer segment called advertisers. So we had users here but we now have payers here. Now, what's really interesting is for every customer segment, we have a value proposition. We had a free search bar for the users but for the advertisers, we have a completely different product. We have Google AdWords and our customer relationships are different.
For users, it was kind of an automated process. You just basically went to the Google website or you downloaded a Google toolbar. But for pairs, it might be automated but they also have telemarketing and direct sales to go after big advertisers but they're distribution channel, in addition to the automated is also self-service and direct sales, but the key thing to note is that not only do they have different segments and different value props and different customer relationships, more importantly, they have a different red new model. It's a big idea–multiple customer segments require multiple value props, multiple customer relationships, sometimes different channels but always different revenue models. These are the payers. So, Google Search is what we call a two-sided market. There are users and they are payers.
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