Chapter 9: Cracking the Catalyst Code

Implementing the catalyst code is complex, especially in the novel settings where profit opportunities and risks are greatest.

It would be a mistake to assume that catalysts are merely a faddish business model, fueled by technology and the Internet. As we try to show in this book, catalysts have existed for millennia, even as we witness a remarkable boom in catalyst business in our own day.

Much harder to describe is where the ideas for catalysts come from. What we have learned is that the identification of a good business idea with a two-sided platform is not enough to start, much less propel and sustain, a new business.

Catalysts take time and patience. Some are discovered by accident; others emerge only after extended trial and error. Many succeed at creating a catalytic reaction and starting a vibrant multisided community only to discover that it cannot earn consistent profits over the long term. Some catalysts have to endure years of uncertainty and constant tweaking of design and pricing before suddenly taking off.

Today our understanding of how catalysts work and how they thrive is better than ever. The recent work of economists has allowed us to view the catalyst not simply as an interesting business arrangement but as a very carefully constructed set of relationships that become an engine for economic growth and profitability.

When we apply this understanding, what we see are catalysts in places we would not have thought to look and find ourselves at the forefront of what could prove to be a very interesting Catalyst Age.