Image for post
Image for post

Our typical investment process involves tackling the previous two bodies of work — mapping the experience and charting a course — so we understand the marketplace and its goals for the seed phase. With those pieces done, the round closed, and money in the bank, it’s now time to get building!

But the chicken and egg problem can make the choice of where to start a challenge. There are some good pieces out there about this (see for example, here, here, and here); our view is that people will only shift their behavior to try your platform if it is more convenient and cheaper than the status quo. …


Image for post
Image for post

There are many analogies for the hardships of starting a business; when you’re in the trenches of trying to get it to work, the one about building a plane as it’s taking off can feel eerily accurate.

But from the vantage point of an investor, working with many teams trying to do versions of the same thing in different sectors, we’ve gravitated toward an image of someone getting dropped in the middle of a desert. With limited resources, you have to find your way to civilization before you starve. In that scenario, survival is determined by two factors: (1) choosing the right direction and (2) moving efficiently enough to arrive at your destination before running out of supplies. …


Image for post
Image for post

When founders pitch us we often ask them to walk us through a transaction their platform is meant to host. Who are the people on either side? What motivates them, and why is this better than the status quo?

It’s interesting how often this line of questioning comes as a surprise. While intuition about early adopters is common, many over-index on the role of software as a solution.

Software can enable the solution, certainly. But the true product of a marketplace is the people on either side of the transaction. …


Image for post
Image for post

When we started Wave, our goal was to help the next generation of marketplace businesses build on the learnings of Airbnb and its peers. The hope was that our collective experience as operators and investors, particularly having lived through the construction of Airbnb from its earliest days, would inform a playbook that could lift the odds of success for future entrepreneurs. That playbook is now real, proven effective beyond the unique experience of Airbnb, so we want to share it with the broader community.

This matters because marketplace businesses are notoriously difficult to jumpstart. While each phase of a company’s growth has its challenges, you can make a good argument for seed stage marketplaces being the olympics of company building. As compared with other models, generating a single transaction in a marketplace setting requires constructing two separate businesses in parallel. Momentum is a big factor in raising downstream capital and you don’t get extra credit for choosing the harder path. …

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store