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AN OVERVIEW

Understanding online marketplaces

More than 70 useful resources on online marketplaces and related topics.

Christian Sprinkmeyer
8 min readSep 16, 2019
Photo by Jezael Melgoza on Unsplash

Physical markets and marketplaces have connected buyers and sellers for centuries. However, since the mid-1990s online marketplaces have arrived in most environments. While they initially occurred primarily in B2C (or C2C), they have reached B2B in recent years. And while they were first launched primarily by venture-backed startups, they are now also initiated by established companies. Today, online marketplaces play a substantial role in our economy and understanding them will become increasingly important for many professional careers.

On my own marketplace journey so far, I have found the vast amount of resources on online marketplaces and related topics, that have been published by experts in the field, particularly helpful. Over time, I have therefore collected a list of articles, presentations, podcasts, spreadsheets, etc. As I believe this information can be valuable to other marketplace founders and managers as well, I have decided to publish this overview of resources on online marketplaces and related topics. The overview is certainly far from complete, but rather meant to be a starting point, which evolves over time.

I clearly want to state that I am not the author of (most of) the resources included in this overview. If you are the author of any of these resources and do not wish for it to be included, please simply drop me a message. If you would like me to include further resources on related topics that you have found useful, please also let me know. I plan to update this overview on a regular basis. Enjoy browsing and reading!

Structure of this overview

I have structured the resources in this overview in the following six chapters:

  • Top picks
  • Business model
  • Operations
  • Network effects
  • Trends & markets
  • Case studies

At the beginning of each chapter you will find a short explanatory introduction. The structure is certainly not exhaustive and will evolve over time, as I add further resources. For now, it tries to highlight the core theme of each resource and thereby hopefully allows you to identify what you are looking for. Please note that some resources also touch upon marketplace-adjacent topics (e.g. other types of businesses with network effects).

Top picks

The list is already quite long and it will hopefully become even more comprehensive over time. For those of you who cannot allocate too much time, I strongly recommend these ten resources (even though some of them are relatively long, too).

Business model

Online marketplaces facilitate transactions of goods and services between buyers and sellers, typically without building an inventory themselves. For the matching of the two parties, they take a margin of the overall transaction volume, which varies depending on industry and size of transaction. In order to build a profitable business, online marketplaces therefore typically require either a high frequency of usage or a high transaction volume. Still, as Bill Gurley puts it:

“Some industries are much more susceptible to the arrival and success of online marketplaces than others.”

This chapter lists resources that help to understand the business model of marketplaces, its nuances and variations, as well as beneficial and detrimental circumstances in more detail.

Operations

Even if an industry bears potential for an online marketplace, building and operating an online marketplace is extremely tough and a highly uncertain endeavor. Or as described in an article by Greylock Partners:

“Building an enduring marketplace is a near impossible feat.”

One of the various challenges that founders and managers of online marketplaces typically face is acquiring initial supply and demand, i.e. solving the “chicken and egg” problem. This chapter presents resources that provide useful recommendations to overcome some of the critical challenges when building and running an online marketplace and to develop an understanding of important marketplace KPIs.

Network effects

Network effects are the most important source of defensibility for online marketplaces (and other related businesses). Still, not a lot of people understand them in detail. In short, network effects arise when every new user of a product or service increases the value of that product or service to every other user. And as identified in a study by NFX:

“Network effects have been responsible for 70% of all the value created in technology since 1994.”

Understanding the different types of network effects and how they might evolve is critical to successfully build a marketplace business. This chapter therefore presents resources that help to understand network effects, the different types, their dynamics, and the common misconceptions.

Trends & markets

The first online marketplaces emerged in the mid-1990s (e.g. eBay and Craigslist). Since then, marketplaces have tackled many industries and have evolved from “simple” listings to managed marketplaces. This chapter introduces resources that describe this evolution of online marketplaces. While not all of these resources are up to date, they help to understand how online marketplaces have evolved over the past 20 years and how they will most likely generate value in the future.

Case studies

As mentioned earlier, online marketplaces have emerged in many industries and variations. Some have been massive success stories, others have failed. While the previous chapters have presented resources on some of the fundamental underlying concepts of online marketplaces including selected examples, this chapter lists case studies from different perspectives that hopefully fill the above concepts with life.

Many thanks for browsing and reading. As mentioned above, please reach out in case you would like me to add / delete resources to / from this overview or have any comments.

Startup
Marketplaces

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Christian Sprinkmeyer

Written by Christian Sprinkmeyer

87 Followers

I am an entrepreneur passionate about digital ventures, particularly businesses with network effects.

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