Perfect Sip: Three-sided network effects

Last class we discussed one vs. two-sided network effects in the context of the Cork'd case.  We raised the question of whether or not the Perfect Sip business model exhibits network effects.  I definitely believe network effects are a part of the success for this business.  Further, it is actually not just a two-sided network but rather a three-sided network.

1. Wineries/Wine Producers: Wineries are more likely to commit to creating a private label product for Perfect Sip if they believe there are sufficient curators to create a broad reach and consumers to buy from those curators.
2. Consumers: Consumers want to buy from Perfect Sip if it's easy to find a curator-led tasting to attend and if a variety of high quality wineries are willing to produce wine for the platform 
3. Curators: Curators want to be a part of the Perfect Sip network if there are enough interested consumers to sell to (and to make recruiting other curators lucrative) and if a variety of high quality wineries are willing to produce wine for the platform

Three-sided networks are not uncommon.  For example, the Android operating system serves three groups--consumers, handset manufacturers, and application developers.  This example is illuminating it two ways:

1. Know where to focus first: Unlike in the Cork'd case, it's clear where Google has to start to roll out Android.  They have to have a clear plan for how the network will work and get one or more handset manufacturers to buy into this vision.  Similarly, it is clear that Perfect Sip has to have a clear vision of how the network will work and will need to get a few wineries to sign on board first.
2. Consumer focus isn't required: For Android, the handset manufacturers will manage consumer acquisition and so Android does not need to execute that directly (low customer acquisition costs).  Similarly, Perfect Sip doesn't need to acquire customers because the curators will manage that process.  In both cases, building a known brand is useful but directly acquiring customers is not required.

Networks generally generate winner-take-all scenarios.  In the case of Android, Microsoft's OS lagged way behind as the Android network grew, forcing Microsoft to subsidize app development so that it was worth developing for the Microsoft platform.  Android continues to dominate the Microsoft OS.

In the case of Perfect Sip, it is not clear whether or not this would be a winner-take-all market.  If it were, it would obviously make the business more attractive.  You could imagine this market operating similar to the ride hailing app market where users don't want to have too many apps, but are comfortable using a few different apps at the same time and drivers are comfortable working across apps.  Similarly, Perfect Sip consumers may be using a few different avenues to source great wines and curators may even be willing to work across multiple platforms.  

Uber has been able to dominate, predominantly through offering lower prices.  The difference for Perfect Sip, though, is that wine isn't a commodity good.  With that in mind, the quality of the product will drive purchase behavior.  If Perfect Sip can't consistently deliver (or be perceived to deliver) a strong quality/cost value proposition, winner-take-all dynamics likely would not occur.