marketplace

“If you were trying to remove a, move a retention style metric, rarely should you go right to the source and send them more email or push notifications or something like that. It's really actually about understanding what is the customer experience and what mat…”

“Like one principle to use here is like how many total dollars are attached to each transaction in the marketplace. When it goes above a certain amount, it becomes much more attractive to figure out how to go around the marketplace.”

“You only should acquire supply to the extent you understand how it impacts demand.”

“It's who can deliver an Incredible end-to-end customer experience first, even if for a smaller number of customers, because that's what creates the flame where actually like customers are really loving it, retain talking about it, and you can then expand from …”

“This is why like the effective commission of a marketplace, often, 1015, 20% is much higher than the effective commission of a SaaS business in the two to three percent range.”

“As soon as you start stacking assumptions, you're highly sensitive to how many assumptions do you have to make? And do you know how to make that assumption? And marketplaces kind of create complexity on both of those, because for the first piece, you're modeli…”

“Essentially until you have a liquid marketplace, really nothing else matters. And so this should be the primary thing you're focused on defining and then building towards. And this is why you hear a lot of advice to marketplaces to basically cut scope. Down to…”

“The variable to me that matters in deciding which case you're going to have, whether they consolidate or not, is how much creativity there is in the space. So like, how much do you need the supplier to be coming up with interesting new things for your customer…”

“Actually the thing that matters is can you write an ROI equation for acquiring supply and demand, which fully internalizes the marketplace dynamic. And so what I mean by this is like, if you're acquiring a new customer, you need to Include the CAC of acquiring…”

“Beyond a certain point, TAM or the size of the market actually matters very little because these are all big enough that they would dramatically inflect the curve of the business. If you make them work, it's much more relevant to focus on a couple of things. O…”

“If you think about running a marketplace, you're basically like a gardener. You have to have a very light touch. Like if you're building a SaaS business, you're a construction worker. You're like building the product and the features and selling it. And it's t…”

“Like if you could tell me we could grow GMB, 10% by getting 10% more customers or by getting 10% of more of our current customers wallet, I would take the latter because You now have a deeper relationship with them, which tells you something more about the fut…”

“The reason we won't see a huge explosion in this area is that B to B also comes with something else, which is much lower fragmentation in many cases. And you need fragmentation for a good marketplace. Like the more concentrated either side of your market is, t…”

“They're like, they're very hard to get started, super capital intensive to get started, but once they're rolling, they're very hard to stop. You get these kind of Compounding defensibility and gains that makes them very hard to stop.”

“I think ultimately demand is the only thing that matters. If you are successful at aggregating the demand in your industry, you will have the winning marketplace.”

“So typically, as you acquire more and more customers, you're acquiring the marginally good fit customer over time. And your CACs go up, your LTVs go down, it gets harder and harder. Marketplace actually the inverse, like the supply of liquidity is improving, t…”

“The higher it is, the less likely a customer is to multi-tenant, meaning use another marketplace or another service. And ideally you want that customer to commit to using just this marketplace and the higher share of wallet is, the more likely that is. But I w…”

“So broadly, I will say, I think it's easier for a marketplace to go SaaS than it is the other direction.”

“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.”

“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.”

“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…”

“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…”

“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…”

“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…”

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

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

“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.”

“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…”

“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 …”

“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 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…”

“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 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…”

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

“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…”

“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…”

“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. …”