The document outlines strategies for building critical mass in collaborative economies, emphasizing the importance of balancing supply and demand on platforms. It provides ten methods to create liquidity in marketplaces, including limiting geographic scope and targeting existing communities. Case studies of successful platforms like TaskRabbit, Uber, and Airbnb illustrate these strategies in action.

1. COLLABORATIVE ECONOMY
10 WAYS TO BUILD CRITICAL MASS
Materials part of the M.B.A. course, Understanding and
Innovating in the Collaborative Economy

2. CRITICAL MASS
Enough momentum in the supply
and demand of a marketplace to
create liquidity and make it
self-sustaining.

3. ‘MUTUAL BAITING’ PROBLEM
For a two-sided business to work, both
providers and customers need to be on
the platform. However, providers won't
come to the platform without customers
and vice versa. Both act as bait to get
the other to come in.
Source: Platform Revolution

4. 1. LIMIT GEOGRAPHIC SCOPE AND SERVE THIS MARKET REALLY WELL BEFORE EXPANDING
2. TAKE A REQUEST-BASED APPROACH WHEREBY NEEDS OF CUSTOMERS DICTATES SUPPLY
3. TARGET EXISTING COMMUNITIES WHERE BOTH PROVIDERS AND CUSTOMERS CAN BE FOUND
4. SHOWOFF THE SOCIAL PROOF TO CONVINCE OTHER PEOPLE TO ACT IN A SIMILAR WAY
5. ‘STEAL’ CUSTOMERS BY USING CURRENT COMPETITOR NETWORKS TO PULL IN CUSTOMERS
6. FOCUS ON WELL-STOCKED SUPPLY BY THINKING OF CREATIVE WAYS TO GET PROVIDERS
7. KEEP THE SUPPLY SIDE ENGAGED BEFORE THERE ARE CUSTOMERS LOOKING FOR SERVICES
8. FOCUS ON A SPECIFIC VERTICAL BEFORE MOVING TO THE NEXT VERTICAL
9. EXPAND THE TYPES OF SUPPLY AND RETHINK WHO OR WHAT CAN OFFER THE SAME SERVICE
10. ATTRACT VERY IMPORTANT PROVIDERS (VIPs) WHO WILL CONVINCE OTHERS TO JOIN

6. TASKRABBIT FOCUSED ON BOSTON FOR2 YEARS BEFORE
MOVING INTO SAN FRANCISCO IN 2010, THEN IT LAUNCHED
IN 16 NEW US MARKETS FROM 2011-2013. IT OPENED IN
LONDON, ITS FIRST MARKET OUTSIDE THE US, IN 2013.

7. LA RUCHE QUI DIT OUI FOCUSED ON FRANCE FROM 2011-
2012 BEFORE OPENING IN NEARBY FRENCH-SPEAKING
BELGIUM IN 2013, THEN IT MOVED INTO 4 NEW EUROPEAN
MARKETS IN 2014. IT CURRENTLY SERVES 6 EUROPEAN
MARKETS.

9. WHEN UBERLAUNCHED IN SAN FRANCISCO, THERE
WAS A LARGE AMOUNT OFINBOUND REQUESTS FOR
THE SERVICE IN NEW YORK. BEFORE A SINGLE CAR
WAS LAUNCHED ON THE SYSTEM, THERE WERE 1000+
UBERRIDERS WITH CREDIT CARDS ON FILE.
1000 UBER REQUESTS ACROSS NY

10. PEERBY REVERSED ITS BUSINESS MODEL FROM OTHER
PEER-TO-PEERPLATFORMS AND PLACED THE FOCUS ON
THE PERSON WITH THE NEED FORGOODS RATHERTHAN
THE PERSON WITH THE HAVE. WHEN A PEERBY MEMBER
REQUESTS AN ITEM ON THE PLATFORM, A NOTIFICATION IS
SENT TO NEARBY MEMBERS WHO MIGHT HAVE THE ITEM.

16. THE ETSY TEAM WENT TO CRAFT SHOWS AND CONVINCED
CRAFT MAKERS TO OPEN UP STORES ONLINE AND SELL
THEIR WARES ON ETSY. IN THE EARLY 2000s,
INDEPENDENT CRAFT MAKERS DID NOT HAVE AN E-
COMMERCEPRESENCE PRIORTO JOINING ETSY THUS THEY
SENT THEIR BUYERS TO VISIT THEIR ETSY SHOP.

18. TO ATTRACT CUSTOMERS WHO ARE DUBIOUS OF
INVESTING IN PROPERTY OVERTHE INTERNET, PROPERTY
PARTNER SHOWS ON ITS HOMEPAGE, THE TOTAL AMOUNT
INVESTED TO DATE, THE NUMBEROFINVESTORS USING
THE PLATFORM AND THE TOTAL NUMBEROFPROPERTIES.
PER PROPERTY LISTING, IT SHOWS THE NUMBEROF
INVESTORS AND THE PERCENTAGE OFITS FUNDING.

20. AIRBNB RECOGNISEDTHAT PEOPLE WHO LOOKEDON
CRAIGSLIST FOR HOUSE LISTINGS WERE THEIRTARGET
MARKET AND DECIDED TO ALLOW AIRBNB HOSTS TO
AUTOMATICALLY POST THEIRLISTING ON CRAIGSLIST AS
WELL AS ON THE PLATFORM. AIRBNB LISTINGS BECAME
AVAILABLE TO A GREATERUSERBASE AND CRAIGSLIST
USERS NOTICED THAT AIRBNB HAD BETTERPICTURES AND
DESCRIPTIONS ON THEIRPROPERTY LISTINGS; THEY
SWITCHED.

22. IN ORDERTO GET THE FIRST COURSES AVAILABLE, UDEMY
LEGALLY OBTAINED CREATIVE COMMONS-LICENSED
VIDEOS FROM VARIOUS UNIVERSITIES. THIS GAVE THEM
THE FIRST 50-150 COURSES.

24. INITIALLY BUILT A TOOL FORPROFESSIONALS TO EASILY
POST THEIR THUMBTACKPROFILES TO CRAIGSLIST TO
BETTERSHOW OFF THE QUALITY OF THEIR WORKAND
HIGHLIGHT THEIR ONLINE REPUTATION.

26. EXCLUSIVELY OFFERED LEGO RENTAL BUT MOVEDBEYOND
LEGO WHEN TOY SUPPLIERS EXPRESSED INTEREST IN
OFFERING THEIR TOYS THROUGH PLEY.

28. JUSTPARK INITIALLY ONLY OFFERED UNUSED PRIVATE
DRIVEWAYS ON THE PLATFORM BUT REALISED THAT IT
COULD ALSO OFFERUNUSED PARKING SPACES IN
CHURCHES, PUBS, SCHOOLS AND BUSINESSES, IT NOW
HAS THOUSANDS OFPARKING LOCATIONS.
SEPTEMBER 2015

30. SKILLSHARE, A COMPANY WHICH CONNECTS AMATEUR
TEACHERS WITH STUDENTS ONLINE, STARTED WITH
FOCUSING ITS ONLINE COURSES ON DEISGN. IT OFFERED
CLASSES FROM FAMOUS DESIGNERS WHO BROUGHT WITH
THEM ADMIRERS OF THEIRWORK TO THE MARKETPLACES.

31. 1. PLATFORM REVOLUTION, SANGEET CHOUDARY
2. PLATFORM SCALE, SANGEET CHOUDARY
3. HOW DID UDEMY GET 5,000 COURSES SO QUICKLY?, QUORA Q&A
The deck is a snapshot summary of critical mass lessons
for platforms and marketplaces but there are many
other strategies. Some suggested further reading:

32. rachelbotsman.com
Please contact rachel@rachelbotsman.com for permission to use these slides for
presentation or teaching purposes.