Bill Gurley had written a fantastic post on building marketplaces. This is a topic that I have myself been very passionate about. My friend Nir Eyal and I teamed up to make this a digestible checklist for entrepreneurs.
Building a Marketplace: A Checklist for Online Disruption
MAKING A MARKETPLACEA CHECKLIST FOR ONLINE DISRUPTION inspired by @bgurley by @nireyal and @sanguit
On November 13, 2012, Bill Gurley, a partner at Benchmark Capital, posted a remarkable essayon his blog. In it, he described the, “10 factors to consider when evaluating digitalmarketplaces.” Given the tremendous value marketplaces create and how hard they are to getright, we found this essay to be a goldmine of insight. We wanted to digest Bill’s post into a morememorable format.The result is this brief checklist we hope will help take some of the luck out of evaluatingmarketplace businesses. As Bill wrote, “It is unlikely that you will ﬁnd a marketplaceopportunity that would score ten out of ten with respect to this list.” But according to Bill, theodds of success improve the more of these characteristics the business exhibits. - Nir and Sangeet Read Bill Gurley’s original post here: http://goo.gl/xoAUw
1. Does your marketplacemake a behavior dramaticallyeasier and more efﬁcient?
AlibabaMade transactions between US importers andChinese manufacturers dramatically easier than theprevious methods of ﬁnding suppliers.
2. Does your marketplaceproduce more value thancurrent markets?
AirBnBAllows anyone to run their own hotel. Roomowners proﬁt from renting out unused roomswhile guests beneﬁts from lower prices.
3. Does your marketplaceutilize a new technology tocreate efﬁciencies?
OpenTableLeveraged adoption of high-speed internet access byboth restaurants and consumers to create a web-based reservation platform.
4. Does your marketplaceconsolidate a fragmentedmarket?
KickstarterConnects entrepreneurs with ﬁnancial backers whowant to see projects succeed. Both sides of the marketare fragmented with no dominant players.
5. Does your marketplacemake it easy for suppliers tosign-up?
EtsyMakes it very simple to sell handcrafted goods inminutes.