Story: Provider and consumer

I am using Upwork for both freelance and client accounts. It’s a marketplace business. The platform connects freelancers and clients. Amazon connects bender and consumer, Airbnb connects host and traveler. Uber, Alibaba, eBay, Esty, DoorDash, and Creative Market, etc, these businesses are a marketplace.

I am thinking about product business for 2022 and searching for a business trend. According to YouTube, the marketplace business was a boom 2-3 years ago. I could see the data(uploaded day). I did not see them at that time. Because I did not search for it. I understand that I am flexible and a middle adaptor(not an early adaptor), but I cannot catch the trend before the booming.

An algorithm clearly reflects our behavior. Everything is up to us. If we search, an algorithm recommends us something related to information. If we don’t, nothing happen.

©productmint.com

©Sharetribe

Online Marketplace Business

Amazon has a huge area of business. Mainly marketplace, and also subscription as Amazon Prime, AWS.

I used Uber when I visited L.A. Unforgettable. It’s a good mean.

Airbnb is one of the representatives of the online marketplace business. I have both good and bad experiences though.

I am an UpWork user.

I don’t use often food delivery services, but I can see Dasher often on the street. DoorDash connects restaurants and consumers. I don’t know why people can use DoorDash, Uber Eats, Skip, so easily. These services are obviously costly.

I have never used Tinder, but Tinder is also an online marketplace, connecting single males and single females. 

How To Build A Two-Sided Marketplace

©Dan Martell

– Focus on 1 usage
– Focus on demand ✓✓✓
– Solve the issue

Whatever the marketplace is, we have to assume that who the audience is before development. If so, we don’t have to find the customer after the development.

Ekeeda GATE & ESE

©Ekeeda GATE & ESE

– The marketplace is an online mall
– Simplicity of business, manage a process, marketing, payment, etc
– Collaborative, with a buyer and with a seller
– Multiple participants
– No limitation of geo, time, space ✓✓
– Aquire seller, demand generation ✓
– Start small, specific product ✓✓

This series has 6 or 7 videos. Please find them on YouTube.

How to kickstart and scale a marketplace business by Lenny Rachitsky

©Refresh Miami

– Connect demand and supply at a marketplace, then transaction
– Network effect, no inventory, scalable
– Market fits and solve problems,
– MVP, geo and category

– Concentrate supply
– Grow initial supply
– Direct sales, piggybacking, referral, word of mouth, subsiding, a single-player mode

I did not prefer the slide. It disrupts a focus. Working at a global company does not automatically a good speaker.

Lesson from 3billion+ marketplaces – Josh Breinlinger, Jackson Square Ventures

©Marketplace Conference

– Productivity game, look for a bunch of suppliers and compare them
– Transaction is one of the values of the marketplace I cannot send money to a stranger who does not have an online review or verified by a third party
– Buyer and seller drop off the platform once they build trust offline ✓✓✓
– Frequency of match/usage(how many times per day), size of the transaction(how much, how big)
– Low-frequency service can be group, Thumbtack

– BtoB marketplace will be growth
– Fill ratio (buyer and supplier) reflects customer satisfaction and revenue
– Increase conversion rate = instant booking/buying

– Let bad actors go, retain high-quality people
– Stop worrying about screening
– Teaching people

– Delete worker’s account for user testing
– Network effect

–  Chicken and egg, liquidity
–  Narrow and focus

He is one of the Upwork, previously oDesk, founding team. That’s a good experience to share.

A Crowded Space by Josh Breinlinger

Brian Rothenberg – How To Build & Scale a Marketplace from $0 to Billions

©Traction – A Community for Innovators

– Liquidity ✓
– Network effect both buyer and supplier side
– Chicken and egg, it’s chicken (means supplier first)
– Fragmentation + high friction ✓✓✓
– Track satisfaction
– Winner takes all
– Liquidity matters ✓

Liquidity is a very appropriate word. I don’t come up with a good idea right now, but I feel that fragmentation and high friction are everywhere.

Marketplace checklist by SlideShare

©SlideShare: Building a Marketplace: A Checklist for Online Disruption

– Make a behavior easier, efficient?
– Add value?
– Solve fragmentation?
– Easy signup?
– Market size
– Help unserved customer
– Frequency
– Manage transaction
– Network affect

It is almost a conclusion. I would like to make clear the network effect.

In economics, a network effect is a phenomenon by which the value or utility a user derives from a good or service depends on the number of users of compatible products. Network effects are typically positive, resulting in a given user deriving more value from a product as other users join the same network. – Wikipedia

Conclusion: Potential

Recent top marketplace business players have started a marketplace business before 2010. It is not rare that they pivoted the business model a couple of times. It’s a long journey. I have no idea how many startups failed to develop it.

Whether I can develop something valuable or not, I would like to think about fragmentation in society during 2022.

Reference:

CED Commerce: Top Online Marketplace Ideas For Entrepreneurs In 2022