Marketplace

“We have 20,000 voices today on the marketplace.”

“Today there's 31,000 agent skills on marketplaces. But they're pretty bad. You know most of them are actually garbage.”

“The moment that marketplace platform is built, then the engine is set. You can keep feeding selection into it. Pricing will get automatically discovered because all the sellers will be fighting with each other to get the cheapest price on the same product. Con…”

“There was incentive for a long time for companies that, where their moat was not software, to say, we're a software company, we need to hire the best software engineers, Look at our open source projects, focus on all the cool tech that we're building when real…”

“Pick one city and make that city successful. Figure out supply and demand in one market and make that work and then scale that model to the rest of your markets.”

“An enterprise, they couldn't care less about the marketplaces. They want the fine tailor deals. They are very aggressive in terms of the negotiations and all that.”

“There's some quantum, and I would call it 10%, where if you get 10% of all of the supply, You get 100% of the demand.”

“And in 2011, as soon as I said the word marketplace, it's kind of like the AI of, you know, of today. As soon as I said the word marketplace everyone wanted it in our deal.”

“So marketplaces have this very unique dynamic, which is that in your first six months, the unit economics are always horrible because you don't have enough liquidity in the marketplace. So you constantly need to subsidize the drivers, otherwise they're going t…”

“So one trick we did that really helped us get going in some of the first markets was actually to go to the market with the SaaS product and then convert it into a marketplace afterwards.”

“How involved is the intermediary defines how managed the marketplace is. So something like Craigslist is super hands-off, unmanaged, and something like Lyft starts to be more into the semi-managed, where the platform significantly shapes the transaction in thi…”

“If you don't have product market fit, if you don't have a good enough growth strategy for at least one side of your marketplace, just forget about all this marketplace stuff, right? Focus on this core exchange of value. Go deep with one side of the marketplace…”

“Yes, I would say supply is the hardest side, maybe like 80 to 90% of the time.”

“People who build marketplaces tend to want to give a lot of control to the users because this is what users want, or this is what comes up oftentimes in user feedback. Like, oh, we have those two distinct group of users. Those ones, they really want new cars. …”

“If you have, like, different verticals, like, try, if possible, to, like, open up your supply walls. Like, your user is telling you, like, X, but try to give them, like, something that is tangential to what you think they want, because odds are that they are a…”

“Work on ways to, like, make this sort of checkbox affect the ranking, but not the actual filtering is a great example of how you can listen to your users and, you know, tweak the experience, but, you know Simplify their sort of cognitive you know, load by know…”

“Many large, you know, Marketplaces only thinking about their demand side funnel. So they run ads, they get clicks, they turn those clicks into dollars, and they try to get enough supplies that intuitively the experience is good enough for users. And my advice…”

“This is a winner take most. Market. Maybe you're super young for this, but there used to be this show called Highlander, where there's this superhero or super tough dudes, and when they would run into one another, they kind of recognize themselves, and one wou…”

“So ultimately it came down to AI is the ultimate matchmaker. It's underutilized. It's misunderstood. It's run separate from the team. And in a marketplace, it's all about value exchange. And if I'm able to do value exchange really well, then people will come b…”

“If you're going to be low frequency, then you need to be high AOV. And if you can't be high OEOV, then you need to be high take rate on the low frequency. And if you can't get any of those to work, then chances are that a marketplace is not going to be an opti…”

“In today's environment where like paid is pretty hard to get an edge on any sort of edge you have will generally get competed away by competitors coming into the market. You're looking to see that someone's not going to rely on paid or sales for everything unl…”

“The difference between a marketplace and what I would call like a SaaS network is that a marketplace is primary value prop to the supply is that you bring the demand.”

“It's generally lower take rate. If you have a take rate model, it's gonna be more like five percent versus 15%. And then of course you're paying the payment processing. It's harder to build a massive scale business. So you see fewer venture wins in that catego…”

“Marketplaces are not really usually winning on the software itself. Only if the software helps you find more selection on the demand side or brings you more money on the supply side.”

“I generally advise founders against marketplaces phase two of the company. So there are a lot, a bunch of people were like, ah, SaaS to marketplace transitions. That's the model. And I'm like, name an example in the last 10 years where that's actually worked. …”

“As we look at most of the winners in marketplaces, you know, where I would say small winners from like a hundred million to a billion or bigger winners, which are a billion or more, most of them are single category, but then there's some really big outliers th…”

“The flip side of that is it creates a dynamic where only power sellers remain that can do all the standards. So the more, you know, individuals a lot of times can't keep up with the demands of the marketplace. And you certainly eBay is a prominent example of t…”

“One is discounting to product market fit does not get you to product market fit. So in a marketplace, you are selling people on the value of the selection, on the value of, you know, the service. And if you then give a five dollar discount, then you start chan…”

“My epiphany eBay was at least for a marketplace, it's really a platform. And what that means is that when you build new functionality and capabilities, it's not enough to think about what the app can now do. And it's not the same as an application where, of co…”

“Many marketplaces live and die by the quality and liquidity and supply. And so why would you know, focus on customers first in the thumbtack perspective and supply is, are the pros, the people that, that you hire? Well, you know, we always just felt that what …”

“The tricky thing about marketplaces is that you cannot grow arbitrarily fast. There is an efficient frontier. That, that you want to hit where you can balance supply and demand and fulfill a high quality experience for both sides of the marketplace.”

“If you're going to steer your whole marketing investment on one metric, like a cost per or a certain payback, then like, You're by definition you're wrong because all these variants are moving around. They need to like control them all.”

“One of the fundamental things like never changes across all marketplaces is that more liquidity generates higher and more inventory generates higher conversion rates, but there's diminishing returns on that, right? Because the user can only see so much invento…”

“The more dominant a marketplace is relative to the number two in its space, the more profitable that business is.”

“GMV is really actually a vanity metric. It doesn't get at the core of whether you're building enduring value. It's like very clear. And there's plenty of examples I could give where there are companies that had incredible scale and still were disrupted by a st…”

“When you're building a marketplace, you actually, there's a healthy amount of churn that you want on the supplier side. Because there are just going to be suppliers who aren't going to create a great experience for the buyer, and you can't do anything about th…”

“In order to tip a market, you have to reach a saturation point in that market, right? You can't tip a market before you've penetrated it to some saturation level.”

“The only way to build long-term enduring value with a marketplace is to corner the demand side.”

“Like, LLMs may make it possible to bring on a supply Type that maybe the long tail that was just, it was too much effort to reach out to them, onboard them, but maybe if you automate that work, you actually create an opportunity to expand the supply in a way t…”

“One reason why I envy SaaS founders is like, I had to build all that anyway. Like I got to build the route optimization. I got to build the CRM. I got to build the biddings. I got to build the review system. I got to build every single system to make it work. …”

“So the experiments also, AB experiments also don't work. And that's a very unique thing about marketplaces. Not work, I mean, not work the way that you would expect them to work because there are network effects all over. So if you have to run AB experiments o…”

“When you sit on so much data, the hard problem is not, like, I didn't just give you some brand new idea you never thought of, you know about that idea, but the hard part and who wins marketplace is it's actually what do you decide to launch first, second, thir…”

“So those are frictions and what the marketplaces are selling you is taking the friction away. That's what you're paying them for. And it's an important observation because what that means is the marketplace's customers aren't just the people buying the rides o…”

“Every single thing I just said, finding potential matches, making matches, and then learning about those matches, and then, you know, cycling back again, that is the data science of marketplaces. And I feel like every marketplace that you could think of, you k…”

“A common kind of finding it, you know, with badges is that, that badges you think are going to be great actually turn out to be terrible. And one reason they're terrible is they focus too much attention on the badged folks and pull too much attention away from…”

“Overcoming inertia in the early stages of a marketplace is incredibly difficult. It's almost impossible, which is why, you know, there were so many eBay clones that never went anywhere. And, you know, you need to be able to tell a compelling story, and you nee…”

“A lot of people talk about marketplaces is chicken and egg. I actually just think they're two sided and you start with the supply.”

“They did launch a marketplace on May fourth of this year, so they're actually trying to compete more broadly.”

“Payments are same on every app. It's not that my, if I do payment with one app to the other, they stand for different things. Payments is a commoditized one simple thing. Products are not. Like it's two different stores you go to cannot be exactly the same. Th…”

“And I think that's the thing is each of them, these marketplaces appeal to that specific category, but it's very hard to replicate that in other categories. And so, you know, you could probably go to home goods and, you know, I mean, Poshmark, but could you re…”

“It should be absolutely core to how the product is set up. So one of the biggest challenges you see in marketplaces is, you know, it's people can, there's seller fraud, there's buyer fraud and there's collusion fraud. And every marketplace needs to think about…”

“One of the big issues that marketplaces have is you can always bring more people through the door with enough dollars. The question is, can you deepen your relationship with them? What is your actual 30 day, 90 day, 180 day retention?”

“Like I'd rather you buy a, you know, two dollar kind of tube of toothpaste here than 200 dollars, right? Because it's all about frequency of use because now you're really dependent on it.”

“And I think the main way this happens with cross side network effects that we typically talk about for marketplaces is when a disruptor dramatically expands selection.”

“Many of the biggest returns historically have all been marketplaces, and this is because marketplaces generally share two traits that are incredibly valuable and attractive to investors.”

“GMV in some ways is almost a lagging indicator of all of these other kind of amazing things that marketplaces have built to make themselves ideally a sticky and highly retentive platform.”

“Video is starting to disrupt marketplaces in a really interesting way, whether it's short video, prerecorded video, live video, they all bring nuances and flavors to marketplaces that ultimately give buyers more conviction in what they're buying and more joy a…”

“In the cases of a lot of these smaller products that you're trying to get into the marketplaces, I think that building it first without doing a ton of validation is probably the way to go.”

“And so it was brutally hard to aggregate, but once you're aggregated, you know, it's brutally hard to compete with it. And no supplier has supplier power.”

“I have a belief that the demand side is, you know, kind of the, is the more, more strategic side because suppliers typically will go wherever the demand is. And so for me, keeping a healthy demand Bucket, you know, is what your suppliers are looking for.”