Making a Marketplace: A Checklist for Online Disruption

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On November 13, 2012, Bill Gurley, a partner at Benchmark Capital, posted a remarkable essay on his blog. In it, he described the, “10 factors to consider when evaluating digital marketplaces.” Given the tremendous value marketplaces are known to create and how hard they are to get right, we found this essay to be a goldmine of insight. We wanted to digest Bill’s post into a more memorable format.
The result is this brief checklist we hope will help take some of the luck out of evaluating marketplace businesses. As Bill wrote, “It is unlikely that you will find a marketplace opportunity that would score ten out of ten with respect to this list.” But according to Bill, the odds of success improve the more of these characteristics the business exhibits.
Read Bill Gurley’s original post here: http://goo.gl/xoAUw
- Nir (nirandfar.com) and Sangeet (platformed.info)

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Making a Marketplace: A Checklist for Online Disruption

  1. MAKING A MARKETPLACEA CHECKLIST FOR ONLINE DISRUPTION inspired by @bgurley by @nireyal and @sanguit
  2. 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 are known to create and how hardthey are to get right, we found this essay to be a goldmine of insight. We wanted to digestBill’s post into a more memorable 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 !nd 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
  3. 1. Does your marketplacemake a behavior dramaticallyeasier and more e"cient?
  4. AlibabaMade transactions between US importers andChinese manufacturers dramatically easier than theprevious methods of !nding suppliers.
  5. 2. Does your marketplaceproduce more value thancurrent markets?
  6. AirBnBAllows anyone to run their own hotel. Roomowners pro!t from renting out unused roomswhile guests bene!ts from lower prices.
  7. 3. Does your marketplaceutilize a new technology tocreate e"ciencies?
  8. OpenTableLeveraged adoption of high-speed internet accessby both restaurants and consumers to create a web-based reservation platform.
  9. 4. Does your marketplaceconsolidate a fragmentedmarket?
  10. KickstarterConnects entrepreneurs with !nancial backers whowant to see projects succeed. Both sides of the marketare fragmented with no dominant players.
  11. 5. Does your marketplacemake it easy for suppliers tosign-up?
  12. EtsyMakes it very simple to sell handcrafted goodsin minutes.
  13. 6. Does your marketplaceserve a large market?
  14. eBayServes a very large market of online buyers andsellers for just about anything.
  15. 7. Can your marketplacebring in unserved customers andexpand the market?
  16. oDesk Expanded the market for software outsourcing by making it simple enough for anyone to use.Photo Credit: racheocity
  17. 8. Does your marketplaceserve a frequent need?
  18. GrubHubServes a frequent need for many o"ce workers,ordering daily food delivery.
  19. 9. Does your marketplacecontrol the transaction?
  20. UberIs at the center of the payment #ow when itcoordinates a ride between a driver and rider.
  21. 10. Does your marketplaceleverage a network e#ect?
  22. YouTubeIs more valuable with each new video published tothe site. The more videos posted, the moreimportant the site becomes to viewers.
  23. Good luckWe wish you success making your marketplace. // @nireyal blogging at: nirandfar.com // @sanguit blogging at: platformed.info Read Bill Gurley’s original post here: http://goo.gl/xoAUw

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