Attract key users
66 Subsidise the sensitive
‘Subsidise the sensitive’ is about subsidising those users who are highly price sensitive, yet of utmost relevance for the growth of the platform. While the demand side is more frequently subsidised than the supply side, subsidisation can be applied to any side of a platform. Due to the nature of its business model, PayPal heavily relies on network effects: If your relevant businesses and friends are not signed up, there is no need for you to use PayPal as a payment platform. PayPal’s management knew early on that a key challenge would be to convince consumers to share their personal information, ...
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