The current generation of marketplace startups has been incredibly successful. Airbnb, Lime, Uber, Lyft, Instacart, etc. I’ve been doing a broad survey of the best writing on this topic and wanted to share my list of best links I’ve seen.

Marketplaces at Andreessen Horowitz
We look at a lot of marketplace startups at Andreessen Horowitz @a16z – and we fund a lot of them! – so it’s great to compile all the best thinking.

To lead off this list, my colleague @jeff_jordan has an awesome preso that covers everything from the marketplace “wheel” – network effects, and how they’re different than ecommerce products. Amazing, thoughtful preso. Must watch.

Solving the Chicken and Egg problem of marketplaces
Now let’s get to the links. First, here’s a series of links on the “Chicken and Egg” problem of marketplaces. How to do you get the initial liquidity to get the flywheel turning? Here’s a few links on the topic.

1. Josh Breinlinger (early oDesk) on “Liquidity Hacking.” Couple ways to do it: Provide value to one side: offer portfolios, community, tools. Find aggregators: Physical aggregators (like campuses), enterprise clients, supply aggregators, or scrape listings. Narrow the problem: geo, niche, vertical. Curate one side. Read the whole thing here:

2. Here’s a nice podcast from Casey Winters (ex-Pinterest/Grubhub/etc) and Brian Rothenberg @bmrothenberg (VP Growth at Eventbrite) who talk about: The “chicken and egg” problem for marketplaces. Horizontal vs vertical. Online to Offline.

3. Eli Chait (ex-OpenTable) on all the ways to boostrap a chicken and egg problem. Single player, Fill seats for suppliers, Create a marketplace where the buyers are sellers. Read the whole thing here:

4. Anand Iyer (ex-Threadflip) writes about using trust throughout the product: Ratings, Curation, Customer service, Mobile first, Good onboarding, Frictionless Payment, Social proof.

5. Jonathan Golden (ex-Airbnb) on bootstrapping liquidity, adding host guarantees, reacting to competition, user experience.

Current trends in marketplaces
Next topic, the current crop of marketplaces has gotten huge for a reason. They’re doing a lot different, but going more “full-stack,” building deeper tools, etc. One important label is the new “market network” concept

6) Another by Casey Winters (ex-Grubhub) on how new marketplace companies are evolving: 1) connect buyers and sellers, 2) own the delivery network, 3) own the supply (managed/verticalized).

7. Anand Iyer (Trusted) again, talks about the evolution from leadgen/search-based marketplaces to full-stack where the platform helps manage: 1) customer UX, 2) supply software tools, 3) retention/frequency, 4) transactional model, 5) trust/safety/risk, 6) pricing mgmt + guidance. Read the whole thing here:

8. James Currier (of NFX) pens one of the classics of the last few years, defining the term “Market Network” – multiple participants, SaaS tools, with transactions at the center.

Key differences: 1) Market networks target more complex services. 2) People matter – complex services mean each client is unique and not interchangeable. 3) Collaboration happens around a project. 4) There’s unique profiles of people involved. 5) Long term relationships between participants. 6) Referrals flow freely. 7) Increases transaction velocity and satisfaction. Re-read the whole thing here:

9. Andrei Brasovean (Accel) gives a comprehensive list of Marketplace metrics.

Here’s the list: GMV, net revenue, gross margin / contribution margin, MoM growth rate, Market share, Liquidity, AOV, Items per basket, Messages, NPS, User reviews, retention, Repeat orders, Whale curves, Sector/Geo/Product concentration, Fragmentation, CAC, Channel scalability, Channel mix, LTV, LTV/CAC, Unit economics, Burn rate. A lot more detail in the essay.

10. Borja Moreno de los Rios, ceo of Merlin, writes one of my favorite articles where he has a bunch of graphs/concepts on measuring liquidity:

11. Angela Tran Kingyens (VersionOne) on a Marketplace metrics dashboard. GMV, revenue, Seller/supply metrics (engagement/overall), Buyer metrics (engagement/overall).

Product strategy for marketplaces
Finally, I wanted to add a section for overall marketplace strategy – how do you know you’re in the right vertical? What is a network effect exactly? How to think about frequency and retention?

12. Me! @andrewchen (ex-Uber). A few years back, I wrote this about Uber’s virtuous cycle around acquiring more drivers, keeping the marketplace in balance, and how to think about the hyperlocal nature of the product.

13. My colleague Jeff Jordan again (a16z, on the Airbnb/Lime/Instacart boards) on how marketplaces must nurture and manage perfect competition. Gives a sense on why B2B marketplaces often don’t work:

14. a16z has also put together two amazing on Network Effects. Defining them, case studies, strategies for building them, etc.

15. More from Jonathan (ex-Airbnb) on defining a marketplace, global network effects (versus root density), homogeneous/heterogeneous supply, two-sided incentives, size and frequency of interaction, unit economics:

16. Another from Casey on 4 strategies to win on low frequency marketplaces: 1) SEO (expedia model), 2) Better/cheaper (Airbnb), 3) Insurance (HotelTonight), 4) Engagement (Houzz).

17. Two writeups on TaskRabbit which are worth reading. The first, from Leah (founder of TaskRabbit, now an investor at Fuel) visualizing the building blocks:

Also, the Reforge team collects key learnings from TaskRabbit as a case study: 1) Fixed pricing. 2) Faster txns, 3) Going vertical, 4) Raising enough VC , 5) Reputation systems, 6) Gig economy verticals are a power law.

18. Bill Gurley (Benchmark) has a : 10 factors to evaluate with marketplaces: 1) New Experience vs. the Status Quo, 2) Economic Advantages vs. the Status Quo, 3) Opportunity for Technology to Add Value, 4) High fragmentation, 5) Friction of Supplier Sign-Up, 6) Size of the Market Opportunity, 7) Expand the Market, 8) Frequency, 9) Payment Flow, 10) Network Effects.

19. Josh Breinlinger (early oDesk) on the ingredients for a successful marketplace: 1) recurring 2) episodic 3) standardized work 4) little trust required 5) non-monogamous.

20. Worth a mention – not an essay, but The Perfect Store is a behind the scenes look at eBay that I read a long time ago that is great.

Re: Uber, I’ve read everything out there about Uber but there’s nothing good yet. @mikeisaac’s upcoming book is the one to watch.

I’m still collecting/curating my list! So if you have clues for other great pieces, please let me know. Also interested in books if I’m missing anything.

More ideas/thoughts welcome! I read every reply 🙂

[Originally tweetstormed, with some edits, at @andrewchen. Follow me there for more!]

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