The “Zig-Zag Strategy” and “Two-Step Strategy” are concepts used in multi-sided markets, which involve different types of users or participants (like buyers and sellers) interacting on a common platform. These strategies are used by platforms to balance the needs and behaviors of different groups to grow the market or increase engagement. Here’s a breakdown of both strategies:

1. Zig-Zag Strategy (V-Shape)

The Zig-Zag Strategy, also known as the V-Shape strategy, involves alternating focus between different sides of the market to grow the entire platform.

2. Two-Step Strategy

The Two-Step Strategy is often used to gain traction in a multi-sided market by initially focusing on one side, and then moving to the other once the first side is well-established.

Both strategies rely on network effects, where the value of the platform increases as more users participate, but they approach the chicken-and-egg problem of building both sides of the market differently.

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A mixed strategy for scaling startups in multi-sided markets often combines elements of both the Zig-Zag Strategy and the Two-Step Strategy to effectively balance supply and demand. This approach is particularly useful when scaling a startup that serves distinct user groups, such as buyers and sellers, or consumers and service providers.

Here’s how a mixed strategy could work:

1. Phased Two-Step Entry, with Zig-Zag Expansion

2. Strategic Focus Points for Growth

3. Monetization Timing

4. Hybrid Incentives

Key Benefits of a Mixed Strategy:

Example of a Mixed Strategy in Action

Consider Airbnb:

Final Thoughts

This mixed strategy—starting with a focus on one side (Two-Step) and then alternating between the two sides (Zig-Zag)—is essential for multi-sided platforms and helps overcome the “chicken-and-egg” problem. It provides a balanced approach that ensures steady growth, sustainable network effects, and scalability while keeping both sides of the market engaged.

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