Liquidity means that there are some producers and consumers, and there is a high percentage of interactions. You can track liquidity by measuring the percentage of listings that lead to interactions. It’s also important to look at illiquidity, which happens when transactions aren’t possible.
For example, when Uber users want a ride but there are no cars available. People get frustrated by these kinds of things and can become so discouraged that they leave the platform.
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Uber. Airbnb. Amazon. Apple. PayPal. All of these companies disrupted their markets when they launched. Today they are industry leaders. What’s the secret to their success? These cutting-edge businesses are built on platforms: two-sided markets that are revolutionizing the way we do business.
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