Top Ten Lessons Learned from Point Nine Marketplace Meet-Up 2016
On May 12th 2016 we held the 2nd annual Point Nine Marketplace Meet-Up after its inception last year. Once again, I would like to thank all speakers, sponsors, supporters and participants. You were an amazing crowd of over 110 people and we were very honored to have you!
Here are ten take-aways i.e. one essential lesson learned from each of the 10 sessions we had.
1st session: “Big things start small”
Unfortunately, Klaus Nyengaard did not make it on time to Berlin for his session — to make up for it, he promised to sponsor next year’s meet-up, so we forgive him ;-). Luckily, Arthur Kosten, former co-founder & CMO of booking.com and a prolific marketplace investor, could take over for him. Mohamed Haouache, founder and CEO of Paris-based PopUpImmo, interviewed him. Many thanks again to Arthur for your flexibility and support; it was the perfect start into the day!
Arthur shared some great insights from the early days of booking.com (e.g. that, at the time of its launch, booking.com had over 1000 known competitors) and his approach to angel investing. He emphasized that, in his view, for an early stage marketplace business it is crucial to start by focusing on a specific customer group or niche. That way, you try to better satisfy its needs, build faster liquidity by carefully balancing out supply and demand for this particular niche. Subsequently, you branch out to the next group of customers or “niche”.
2nd session: “Go global by being local”
This first panel of the day on the internationalization of marketplace businesses was led by Oussama Ammar, CEO and co-founder of Paris-based TheFamily, an accelerator program for French early stage tech entrepreneurs (e.g. #P9Family members StarOfService and Algolia are TheFamily-alumni). The panel included Mariusz Gralewski, CEO & founder of Warsaw-based Docplanner, Jan Thiel, founder & deputy CEO of Berlin-based Auctionata, and Jose Marin, a serial marketplace entrepreneur and investor through FJ Labs that he runs together with Fabrice Grinda.
One point that stood out from the panel discussion on which every panelist agreed was that there is no viable option to go international without a local footprint. While it’s possible to centralize almost all functions in one location, a lean, local team (for business development and/or sales) is a must if you are serious about your internationalization efforts. E.g. Blablacar is a good example of how local structures are kept very small and lean while most functions are centralized in the headquarter.
3rd session: “Private market valuations are coming back to earth”
Similar to the SaaS market, public valuations for marketplaces have discernible implications for private sector fundraising. That’s why we again included a presentation from Torch Partners who gave everyone an excellent overview of recent valuation changes in late stage private and public markets marketplace businesses. Chad and Max showed how private valuations have moderated recently , despite record levels of capital raised by venture and growth equity funds, as investors have shifted to focus on near to mid-term profitability.
4th session: “Regulation, a (FinTech-) marketplace’s best friend”
Next on the agenda we had a panel on “Scaling Fintech Marketplaces” led by Simon Levene, founding partner at London-based VC firm Mosaic Ventures. Panelists included Radko Albrecht, founder & CEO of #P9Family member Bitbond, Celine Lazorthes, the founder & CEO of Paris-based Mangopay and Leetchi, Raffael Johnen, founder & CEO of Düsseldorf-based Auxmoney, and Michael Stephan, founder & COO of Berlin-based Raisin (formerly known as SavingGlobal). Surprisingly, one of the main take-aways of the discussion was that the majority of the panelists saw regulation of the financial markets and emerging fintech-startups as a blessing rather than a curse for their business. It’s a way to build an artificial moat around the business and in some cases even strengthened or enabled the business model itself. For example, in the case of Raisin where EU regulation fragmented the European fixed income market and solidified their business model.
5th session: “SEO is still killin’ it, but you have to be creative and not (too) logical”
Michal Skrzynski, a Polish serial entrepreneur and partner at Protos.VC, held a great workshop on hands-on SEO-tactics for marketplace businesses. You can access the full presentation here. To summarize his presentation: If you think that you have exploited your full SEO potential already, you are probably wrong. Michal showed some inspiring examples of how to build a relevant, sustainable and SEO-driven category matrix. Instead of following a “logic”-driven categorization, get inspired by relevant keywords and be creative regarding their combination. This is particularly important and strong for marketplace businesses with a local approach that can make use of hyper-localized keywords and their different combinations and variations to create an almost endless SEO matrix.
6th session: “Use Stripe” ;-)
We kicked off the 2nd half of the day with a workshop from Felix Huber, Head of DACH and Nordics at Stripe, who kindly sponsored the event together with #P9Family member Deskbookers. A big “Thank You” goes out once again to the entire Stripe-team for your continued support and help!
Felix showed us some interesting examples of how to expand and internationalize with Stripe and what pitfalls to avoid when going international. Some of the main obstacles that startups face when internationalizing are different regulations across countries and a variety of preferred payment methods in different regions. It’s basically impossible for a marketplace startup to work around these challenges on their own. Stripe provides a convenient and easy way to overcome these challenges.
7th session: “Be nice and be fair to all participants of the marketplace”
Next up on stage was Hans Ober, co-founder and CEO of Amsterdam-based Ticketswap, a marketplace to resell tickets for events under fair conditions. Hans and his team grew the business to over 1m register users and impressive revenue figures, which is a remarkable achievement for a bootstrapped company. He shared some interesting insights on how Ticketswap managed to get where it is today. The key to Ticketswap’s success definitely is social media (most notably Facebook) and an inherent virality of the model enabled by the company’s “fair pricing” approach. In short, the balanced and fair approach to monetization allowed the business to break into a market that was already very competitive and targeted by large players such as Seatwave or Viagogo.
8th session: “Don’t listen to your customer, listen to customer data”
The 3rd panel of the day brought together some serious online marketing brainpower: Moderated by Florian Heinemann of Project A Ventures, Arthur Kosten (see above), Christian Saller, co-founder of Swoodoo and partner at Holtzbrinck Ventures, and Jochen Engert, co-founder and CEO at Flixbus, discussed marketing techniques and tactics for marketplace businesses.
It was a great discussion with several highlights but one statement clearly stood out for me. I will never forget this excellent piece of advice by Arthur: “Don’t listen to your customer.” This is obviously an exaggeration. His point was to rather look at customer data (i.e. how do people behave, how do they use your product etc.) instead of only focusing on real customer feedback. That is because what your customers SAY that they want, might not be what they actually want. Or, carried to the extreme, everybody says they want peace for the world but, at the end of the day, everyone primarily looks for their own benefit first.
9th session: “Back to marketplace basics: The times of oversupply of capital are over”
Andrin Bachmann, founding partner at London-based VC firm Piton Capital, shared his lessons learned from over 10 years of investing into marketplace businesses. He showed how marketplace investing was significantly influenced by supply of capital as a catalyst or “USP” (and subsequently a faster ramp up of liquidity) in the last 5–6 years. Andrin suggested that we are at the end of a cycle. The situation is changing and things might shift “back to (marketplace) basics” i.e. a more organic and balanced approach of building supply and demand. This will require rather thoughtful, strategically thinking and product-oriented entrepreneurs as well as patient investors.
10th session: “It’s an entrepreneur’s not an investor’s job to fill the white spaces on the map”
Last but not least, we welcomed Fred Destin, partner at London-based Accel Partners, and Alexander Kudlich, managing Director at Berlin-based Rocket Internet on stage. Pawel interviewed both on their view about building marketplace businesses.
As it turned out, those two key players of the European startup ecosystem have quite a different approach to building marketplace businesses. There was one point though on which they agreed (both with their own interpretation): It is not an investor’s job to find the “white spaces” on the (technology) map. While Rocket Internet primarily looks for marketplace models that have already been proven elsewhere in order to bring them to another geography, Accel invests into exceptional people that find and fill those white spaces. Fred mentioned 2 areas that he is currently interested in and that could be ripe for disruption by a new marketplace: high skilled jobs such as developers and sea freight (listen carefully, Xeneta!).
Here you can find some impressions of the day: