We divided the guide in 2 parts: (1) marketplace dynamics, where we try to grasp the overall picture, (2) marketplace KPIs, where we make a snapshot of the different parts of the business and look at them overtime. And as a super bonus, we’ve prepared an open-source dashboard (Google Spreadsheet) to structure your activity.

1. The (Ultimate) Guide for
Marketplace Analytics
bonus: open-source dashboard

2. Marketplace
Dynamics
#1

3. Marketplace dynamics are the key forces that drive the
marketplace. However generic the framework to analyze a
company might be, the answers are very specific: a specific
system, addressing a specific need, in a specific time.
Discussion about marketplace dynamics will take most of the
time in a first meeting with a VC and it requires a rigorous
preparation from the entrepreneurs.
We won’t take too much time discussing about really
important considerations such as the problem the
marketplace is solving, the founders’ stories, what makes their
vision unique or the company's DNA, since these discussions
are generic to every startups.

4. 1.1. Environment

5. Macro-trends &
regulation
Questions
– What are the emerging trend
influencing the users’ behaviour?
– Are there specificities between
countries?
– What is the regulation?
Tips
– Look for beliefs, new behaviours,
new technologies and devices, etc.
– Use both quantitative and qualitative
perspectives.
– The key is to explain why there is a
momentum now and why the
solution will be great for the years to
come

6. Consumer psychology
& social dynamics
Questions
– What are the underlying needs?
– What is the consumer present
customer journey?
– Who influences him into buying?
– Who are the hot kids using the
product or alternatives right now?
Tips
– Read this slideshare

7. Competition &
opportunity
Questions
– What is the market size and how
could it evolve?
– Who are the companies answering
the needs today? How are they
operating?
– What is the value chain?
– Are the consumers overserved or
underserved?
Tips
– To assess a market size use both a
top-> down and a bottom->up
estimates
– Don’t forget that a market can
expand

8. Self improvement,
network effect &
switching cost
Questions
– Will the product become better with
scale?
– What kind of network effects are
there?
– Is the demand / offer stuck with the
service?
Underlying questions
– Will it work at the beginning, without
high liquidity (eg: if not, do not
forget to build a single player
mode)?
– Has it the potential to become a
giant? (not too much local network
effects)?
– Are there a lot of direct & indirect
network effects that will ensure high
barrier to entry?

9. Seasonality & the
right timeframe to
look at
Questions
– Is a user really active when he uses
the app every day? Every week?
Every month? The answer is not the
same when you buy a home and
when you rent a home.
– Is there a seasonality in your
business?
Benchmarks
– Uber looks at weekly data
– Whatsapp looks at daily data

10. 1.2. Three kind of marketplaces

11. double-commit
full article by Josh Breinlinger
Exemples
Upwork, Thumbstack, Airbnb.
Typical workflow
1. Buyer posts job or invites candidates
2. Candidates apply to job
3. Interviews happen
4. Buyer makes a hire
Key focus
– improving the fill ratio.
– improving the hiring process (lots of
dropoff through the funnel)

12. buyer pick
Exemples
Airbnb (instant booking), eBay, Etsy, La
Ruche, Teespring
Typical workflow
1. Suppliers enter availability.
2. Buyer can see available suppliers.
3. Hire a supplier without discussion.
Key focus
– quantity and quality of listings
– sufficient utilization rates
– accurate availability of supplier
full article by Josh Breinlinger

13. supplier-pick
Exemples
Uber, Rev
Typical workflow
1. Buyer posts job.
2. Approved suppliers see available jobs.
3. Supplier claims job.
Key focus
– need high standardisation (quality
and homogeneous UX)
– sufficient pool of supply (low
waiting time).
full article by Josh Breinlinger

14. full article by Josh Breinlinger

15. 1.3. Buyer perspective:
the 5 questions framework

16. The 5 questions
framework
Read this great slideshare from Martin Mignot
–How Urgent?
–How Frequent?
–How Complex?
–How Mobile-driven?
–How Profitable?

17. 1.4. Seller perspective:
two important ratios

18. Fill ratio
Key question
– Does your platform represent a large
amount of a worker total income?
Reason why
– Most of the time, the more people
spend time doing something, the
better they get (they know how to
communicate, to structure, they have
more materials/supports).

19. Idle ratio
Key question
– Are they using/monetizing assets
that would idle otherwise?
Reason why
– Most of the time, the more people
spend time doing something, the
better they get (they know how to
communicate, to structure, they have
more materials/supports).

20. Marketplace KPIs
#2

21. download this open-source dashboard!
first tab is the dashboard, second is a cohort analysis

22. Let’s now consider some of the most
important KPIs of this dashboard.

23. Gross merchandise
volume (GMV)
Definition
– GMV is the total sales dollar value for
merchandise sold through the
marketplace, it is sometimes called
“Total Order Value“, “Total Dollars
Processed” and “Gross Revenue”.
Reason Why
– GMV Growth is a good indicator of
the overall growth of the
marketplace.

24. Average Order Value
(AOV)
Definition
– The Average Order Value is the
average revenue per transaction.
Formula
– AOV = total revenue / number of
transactions
Reason Why
– how much value a business can
capture from the transaction (& how
much it can spend for the transaction)
– high AOV = considered purchase, low
AOV = impulse purchase.

25. Rake (or take rate)
Definition
– Take rate (sometimes called “rake”) is
the percentage of the GMV captured
by the marketplace.
Reason Why
– good indicator of the power of
negotiation
– high AOV = considered purchase, low
AOV = impulse purchase
Benchmark

26. Buyer/Seller Overlap,
Buyer-to-Seller ratio
and TPB/TPS
Definition
– Buyer/seller overlap is the number of
sellers who are also buyers ; buyer-to-
seller ratio is the number of buyers
divided by the number of sellers
Reason Why
– often a good sign when the supply
also buys stuff/services
– the more in-depth ratio Transactions
Per Buyer/Transactions Per Sellers
(TPB/TPS) is even more interesting
Benchmark
– AirBnb’s TPB/TPS = 1/70
– Uber TPB/TPS = 1/50
– eBay TPB/TPS = 1/5

27. Contribution Margin &
Contribution Margin
Ratio
Definition
– Contribution margin is difference
between the price paid and
associated variable costs
Formula
– Contribution Margin = Sales — Variable
Costs*
– Contribution Margin Ratio = Total
contribution margin / Total sales
Reason Why
– the contribution margin ratio is the
percentage of revenues that remains
after all variable costs have been
covered.
with variable costs = cost of goods sold (COGS) + human
cost if the transaction is a service + sales commissions +
payment processing + delivery price

28. Quick ratio
Definition
– A quick ratio is a metric that measure
if growth outpaces churn.
Formula
– Quick ratio = (new users + resurrected
users) / churned users
Reason Why
– a ratio above 1 means that the
marketplace is growing (new
+resurrected > churn), otherwise you
would be losing users (churn >
growth).
more about quick ratio

29. Net Promoter Score
Definition
– Net Promoter Score (NPS) is a
management tool to measure
customer satisfaction.
Formula
– The score is obtained asking the
following question: “How likely is it
that you would recommend [brand] to
a friend or colleague?”
– NPS = Promoters [score 9 or 10] -
Detractors [score 0 to 6]
Benchmark
– An NPS that is positive (i.e., higher
than zero) is felt to be good, and an
NPS of +50 is excellent.

30. Read the full article & get our newsletter!

31. about daphini & the author
@willybraun, co-founder of daphni
special thanks to my parter
@mathieudaix, for his feedbacks & inputs
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