Winning Strategies for Service Marketplaces

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Opportunity for Technology to Add Value. Zillow gives homebuyers access to a lot of data that was previously kept in proprietary systems. Using Uber's system, you can use more cars, earn more fares per hour, and get a faster pickup. Facilitating work-flow helps participants do more, and increases switching costs.

Bill Gurley • All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces - Above the Crowd

Lenny Rachitsky’s research shows that the vast majority of unicorn marketplaces focused on tackling supply before demand. If you have an exclusive lock over supply, that can be used as a unique and compounding moat.

Erik Torenberg • Building and Investing in Marketplaces

Uber is the quintessential example of a marketplace with low transaction complexity and asymmetry. Matching demand and supply is simply a function of availability and pickup time — commissions are the obvious fit here. On the other hand, marketplaces like Classpass and Scoutbee avoid commissions entirely.

Sameer Singh • The Marketplace Monetization Map: Complexity and Asymmetry

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

Lenny Rachitsky

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