The inside story of Facebook Marketplace

Our team often joked that Marketplace was a five-year overnight success. While it seems straightforward on the other side, there were times during that period when we struggled with achieving true product-market fit. In the end, however, we succeeded, and Marketplace is no longer the simple and scrappy product we started in 2015.

People use Facebook widely and frequently, often multiple times a day. Adding a local and shipped commerce solution only extended the value of the app and the things that could be done with it. The fact that you can have the app open already and see when something new comes up for sale is part of the serendipitous discovery aspect of Marketplace.

Once we had the tab within the Facebook app to drive buyer engagement, we settled on the key metric of weekly buyer retention. Our early bet was that supply would drive demand—that having sufficient inventory would get buyers excited about coming to this new tab to browse. To do that, we had to get sellers on board. Sellers had no incentive to crea... See more

Under Vijaye’s leadership, the coding and launching of our V1 product to several U.S. cities took about two months.

Almost every two-sided marketplace struggles with bringing on enough supply and/or bringing on enough demand. Surprisingly, Facebook didn’t. We already had both buyers and sellers, but we weren’t succeeding in making the connection between the two. As long as we stayed within Groups, we could not address this issue.

Being stuck within the Groups system was constraining, and most users had trouble discovering groups, joining them, and finding items. This meant that we faced the twin marketplace issues of limited seller liquidity and difficult buyer discovery. Buyers told us in research studies that they couldn’t find the items they wanted, and sellers felt that... See more

Some of our earliest experiments were simply structuring the groups so that items for sale showed up as listings rather than just discussion posts.