Where Supply meets Demand.
You are reading the free version of I/O Marketplaces. You can get the full report here.
Micro Marketplaces
NoCode and other SaaS tools democratize building startups, allowing people to build businesses around their unique passions. Authenticity defines the niche of companies like Notion Everything.
The Assetization Paradigm
Marketplaces like AirBnB and Envato help people turn product and property into money-making assets, both peer-to-peer and creator-to-consumer.
The Freelancer Economy
47% of Millennials and Gen Z are freelancers today. By 2027 freelancers will account for >50% of the work force. Every single, granular, subcategory on a platform like UpWork is a potential standalone marketplace.
Consumers want frictionless access to (niche) products or services from multiple suppliers, without loss of quality.
Supplier-side
Consumer-side
Marketplaces connect supply and demand of a (niche) product or service.
Key Features
| Attribute | Score | Comments |
|---|---|---|
Cost | Moderate | Biggest cost driver is acquisition, which can be lowered by making smart use of of WOM. High in manual labour early. |
Difficulty | Very High | You're dealing with two-sided acquisition – practically building two businesses rolled into one. So expect high complexity. |
Competition | Low | The barrier-to-entry is high because of Difficulty. Once you cross that barrier you are "safe". There is a risk of copycats however. |
USPs 🧲
2 more in the Pro Report.
"Building a marketplace is a relentless pursuit of exceeding expectations to create happiness." – Sarah Tavel
Leverage 📈
How to scale money?
(Sub-)Contracts Profit on work you sell, but others deliver.
Monopoly
Marketplaces want to be market-leaders by a wide margin, so they can set price instead of competing on it → It's a high-risk business.
Go-to-Market Strategy 🛫
How to find and attract users?
2 more in the Pro Report.
Cheat Codes 🎮
How to accelerate the Go-to-Market?
4 more in the Pro Report.
"The way to think about referrals is sort of an engineered word of mouth. (...) One way could be just making it easier. Another way could be by using financial incentives.” – Gustaf Alströmer, AirBnB
Via: Lenny Rachitsky
Buy the Pro Report for even more Online Community Startup Insights.
What you get:
- Validation: How to test the potential of your marketplace low-risk.
- MVPs: How to build & launch your community fast & cheap.
- Key Metrics: How to measure marketplace performance.
- Dream Team: What your ideal startup team looks like.
- Risks: How to avoid failure with your marketplace
- Responsibility: How to run a responsible marketplace.
- BONUS: +2 Business Models, +4 Cheat Codes, +2 G2M Strategies, +1 Moats & +2 USPs.
👋 That's all, peeps!
See you next time.
⚡️ Need help launching your Marketplace startup? Check-out our startup coaching , and venture building offering.
Resources
For this report, I happily made use of the resources below. Lenny's Newsletter in particular has been of tremendous value. Go check it out!
- https://www.lennyrachitsky.com/p/how-to-kickstart-and-scale-a-marketplace
- https://a16z.com/2019/09/11/platforms-verticals-unbundling/
- https://everythingmarketplaces.com/#freeresources by @Yoroomie
- https://www.indiehackers.com/group/marketplaces
- https://www.nfx.com/post/10-years-about-market-networks/
- https://medium.com/@riley_wave/marketplaces-at-the-seed-stage-dfbdb797af76
- https://medium.com/@sarahtavel/the-hierarchy-of-marketplaces-introduction-and-level-1-983995aa218e
- https://twitter.com/andrewchen/status/1016371636260495360
- https://twitter.com/ljin18/status/1099418839979315201
- https://www.youtube.com/watch?v=uEXByqPgcBI
Tools
ShareTribe – NoCode marketplace platform.
Everything Marketplaces - Marketplace building community
Marketplace Stack – Curated marketplace resources & tools