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Economic catalyst. An entity that has (a) two or more groups of customers; (b) who need each other in some way; but (c) who can't capture the value from their mutual attraction on their own; and (d) rely on the catalyst to facilitate value-creating reactions between them. Catalytic reaction. In the economy, the process by which value is created by facilitating the interaction between two or more mutually interdependent groups of customers. How Does a Catalyst Work? To understand catalysts, you need to begin by understanding the profound difference between the single-sided businesses that dominate economics and business courses and the multi-sided ones discussed in this book. Single-sided Businesses Single-sided businesses cater to just one basic type of customer for each product they sell: Renault makes vehicles for drivers; Deloitte & Touche sells auditing services to public companies; restaurants provide meals for diners.
In other words, one-sided businesses live in a linear world that can be described by the familiar supply chain: suppliers sell to a manufacturer who sells a finished product to wholesalers who supply to retail which in turn sell to consumers. Catalysts, however, are multi-sided. They cater to two or more basic types of customers who need each other and depend on the catalyst to bring them together.
Together, the catalyst and its customer groups form a dynamic system and live in a nonlinear world. Unlike the one-sided example, the customer groups in a catalyst ecosystem are attracted to each other. They need each other in some way. But without the catalyst, the two groups might never come together. The innovation that the successful catalyst introduces is essentially a way to make it easier for the two groups to come together and interact with one another.
(Table 1-1. Types of Catalysts; reprinted from Catalyst Code).
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Chapter 1: What Is a Catalyst? 
