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How to Kickstart and Scale a Marketplace Business
Almost every large marketplace company is built on an underutilized asset, whether that’s unused real estate in the case of Airbnb, a car that’s sitting idle for Uber, or unused time for many labor marketplaces. Marketplaces allow owners of these idle assets the ability to monetize them more efficiently as the network grows larger.
Andrew Chen • The Cold Start Problem: How to Start and Scale Network Effects
How marketplaces (generally) win:
1. Deliver a much more convenient experience
2. Deliver a significantly cheaper product
3. Unlock desirable supply and then build a market around it
To solve the Cold Start Problem for marketplaces, often the first move—as it was for Uber—is to bring a critical mass of supply onto the marketplace. For