Can we create communities that enable people to accomplish meaningful things like find love, discover a song that moves them, share their knowledge, help them sell their photos and locate a new fishing hole via the two-way marketplace (matching, exchanges or crowdsourcing) model? Can we do this in a sustainable, profitable and proliferating manner?
I think so…
I oversaw a purpose-driven community first-hand at Thumb (aka Opinionaided). As we grew from our very first opinion to our 3 billionth opinion, you could see the magic of people coming together under a common purpose. While we sold to a market research company (maybe a future post), there was definitely enough evidence that when provided with the right tools, people can move mountains.
Next, there is guarded chatter coming from leading product folks and venture capitalists about two-way marketplaces, the best of which are a function of mobile communities, because of three major reasons:
- Early — It’s still really early, the multipliers exist here and lots of people don’t yet realize how big the opportunity is. Greylock makes a bet.
- High-Margin with Defensibility — Marketplaces are extremely cheap to run with massive scalability, network effects and barriers to entry (if you’re in the lead). Post by Fred Wilson.
- Lots of Remaining Opportunity in Mobile — There are lots of newly unsolved use cases because of mobile (think Uber) with massive liquidity available because people are now on demand. The ability to match artist/curator, buyer/seller, renter/owner, knowledge/seeker, etc. today is unparalleled because of mobile access. Always on, fully connected, and the realtime nature (essentially, on demand) that mobile facilitates makes this a massive opportunity.
If that’s not enough, there are proven successes in Web 1.0, Web 2.0 and some new ones in mobile. Think StubHub, eBay, Craigslist, Uber, Match.com. For examples and inspiration check out these maps from RRE and Trinity Ventures:
Lastly, it’s happening on the ground organically… talking to other entrepreneurs, I regularly see the semblance of community driving liquidity within two-way marketplaces in various forms and stages at a bunch of, primarily mobile, startups. While there is still much to be improved on in existing user experiences, hiccups in business models, ghost-towns, half-markets, etc. there are lots of matched markets that just need some routing tweaks.
So how does a VC place the right bets or an entrepreneur attack the marketplace space via a community-driven approach?
First, define a purpose that keeps the community and team going if the financial model shows cracks. What is your impact on humanity?
· Collective intelligence — passing down knowledge (Wikipedia)
· Solve societal problems
· Wealth creation—put tools for revenue in individual producers (CustomMade)
· Improving health
· Lessening waste or saving money
· Deeper connections between people—match people based on deeper meaning
· Discovering experiences and beauty
· Inspiration and personal growth
Second, know what you’re matching and facilitating the transfer of… Goods are hard, logistics are hard, digital goods, people and information are easier. Take advantage of lowest friction/infrastructure = highest margin paths first. There are opportunities to source and rank existing information, leverage user generated content, etc. for even higher margins.
Third, what use case are you solving for? Know your niche, persona and value prop to that audience. What is your core value? Can it be a high frequency use case that solves a persistent problem?
Fourth, stand behind a set of product principles that yield great products and communities. These are my principles for creating communities that drive liquid marketplaces, but they don’t need to be yours…
- Community must have soul, a purpose and a brand promise that people can get behind. The brand should increase self-worth while being bigger than any one individual. The brand must have emotion and create aspiration.
- Value must be greater for the user in the user experience than taken or found elsewhere. In other words, the experience must not be hard, it should be fun, entertaining, empowering, or other, and it must delight. Users should be able to extract value before you ask them to give it, 90% get everything (literally everything) else right, but fail on this single item. User value first, resulting data/behavior/transactions only meet business goals secondarily. If people don’t want to instantly tell other people about it, you’ve failed.
- Win the liquidity game before you start. No user should ever have an unfulfilled match, request or be delayed. You’ve failed if you do this wrong. The whole value is the exchange. There are dozens of variables within this principle for your product to work and they are different for most niches, know what they are before you start.
Don’t know where to start? Here are a few niche areas worth exploring with some new entrants. I’ve purposely left out the entrenched players to get the creative juices flowing…
Stock Photography — Foap
Niche Jobs — Underdog
Designers & Projects — 99Designs
GiftCard Exchanges — Raise
Art Exchange — Society6
Sentiment/Opinions — 3Cents
Boating Charters —BoatBound
Fishing Spots & Catches — FishBrain
Blogger Matching Platforms—Sverve
Influencer/Download Matching —Instafluence
Home Services — Handybook
Expertise — Clarity.fm
Fashion — Threadless
Funding — Kickstarter
Fresh Drink Water Maps
Traffic — Waze
Taste — Wanelo
Author Publishing & Reading Platform
Need a Mate/Empty Spots
Coupons (Local Discovery)
Jobs by Vertical
Surfboards — The Quiver
3D Printing Capacity
Hotels — Hotel Tonight
Gambling one on one
Knowledge — Quora
Question Ad Network
Companies Exiting — ExitRound
Celeb demand for visit, talk, email
Scooter and bike networks
Skill Matching — languages
Music Discovery — SoundCloud
Dating — Facefeed
Doctors/Advice —First Opinion
App Curation & Discovery
Goal Setting —Everest
Temp space — Breather
Person to person games — Quiz Up
Niche content, communities — Inertia
Ideas — Betterific
Homework help — Brainly
Q&A — Jelly
Skate park locations
Stock market movement
Excess capacity collaboration by agencies
Peer to peer lending — Prosper
I left a few out purposely for opportunistic reasons, but there are many more…
Personally, I have a goal to build equity in marketplaces that can be driven by communities that exchange digital goods, information, sentiment, excess capacity or human resources. Ideally, these properties provide sustainable enrichment to both sides and contribute to a collective whole with a representing community that has soul.
If you want to chat about this space, ping me.