The Twenty Minute VC with Boriz Wertz @ Version One
Why Have Marketplaces Exploded Recently?
- ) The Rise of Verticals: In 1999, there were simply too few people online to make niche marketplaces a profitable industry. With 4bn people being smartphone enabled by 2020, this will change drastically.
2.) The Rise of Services: The last marketplace bubble was centred around product. This did not touch the service industry, leaving significant market opportunity, currently being exploited.
3.) Mobile: The introduction of internet connected smartphones has created complete new use cases. Whilst, the ease of user onboarding is significantly lowered throught the ability for marketplaces to integrate with FB and Twitter for signing up through existing platforms.
What Do Version One Look For In Marketplaces:
- ) The Fragmentation of Supply & Demand: The more people on either side of the market, the more market potential the marketplace has. Simple.
- ) What is the underlying relationship between buyers and sellers? Do the buyers prefer transactional (taxis) or monogamous (Doctors) relationships? Greater potential lies in transactional where there is the ability for high frequency re-purchasing.
- ) What is the kind of market that this marketplace can address? How big is the market currently and how will the market alter with larger macro-economic shifts?
3 Key Elements To Consider When Scaling Up A Marketplace
- ) As you scale, safety and trust are of paramount importance. Build a brand that people can rely on and buy into.
- ) As marketplace scale, powersellers provide the bulk of supply. Therefore, how can you support power sellers? What tools, tips and advice can you provide to increase their efficiency and quality?
- ) Platformise yourself! How can you turn your current marketplace into an ecosystem and a platform? What additional services and feature can your provide to create a cohesive environment for your users?
What Metrics Must All Marketplace Founders Know:
- ) Gross Merchandise Value
- ) Take Rate
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