REPEATING ATTRIBUTES OF MARKET NETWORKS
Attributes and patterns of identification of the largely under explored yet powerful realm of Network Marketplaces.
In his essay “The Last 10 Years Have Been About Social Networks — The Next 10 Will Be About Market-Networks”, veteran Silicon Valley investor James Currier defines a “Market Network” as a N-Sided Marketplace with transactions happening in a 360 Degree Pattern: “More Marketplace” + “More Network” having “High Transaction Value” per “Branded Service Professional”.
In Jan 2014 we had started TAKE ZERO with the aim of enabling various members of the Indian Film and Entertainment Industry create and maintain their online professional brand — a resume of their work, a portfolio. The marketplace angle was evident since the then focus was primarily on performing artists like actors and models, who were in constant lookout for opportunities. However, it evolved quick and fast into a Market Network.
The primary difference between a Marketplace and Market Network is Frequency. Marketplaces play on Numbers. Market Networks play on Repeat Numbers. Extrapolating James Currier’s essay on the attributes of a Market Network, you can identify a Market Networks through this cheatsheet:
Repeat Collaboration:
In the Indian context, typical Job Marketplaces like Naukri and Monster are used by professionals to search for a job once, and perhaps again while looking for a switch. However, in case of Market Networks, most professionals are involved in short term projects — an average period of fifteen days — which means they need to come back to the platform again and again to look for more opportunities.
Repeat Connects:
In Networks like LinkedIn professionals often maintain passive connections (except perhaps Business Development Professionals and Recruiters), but in Market Networks professionals connect across the industry and reconnect after end of every project to explore new collaborations or referrals. Thus, features are built around “stickiness” bulging retention part of the marketing funnel rather than just enabling quick conversions.
Repeat Referrals:
For P2P Marketplaces like 99 Designs, each project or assignment is a one-off deal, and often goes undocumented (unless there is a review component involved). Unlike such marketplaces where the recruiter is in for quick fulfillment for a project, in Market Networks both the recruiter and the talent are part of the same industry. Thus referrals and endorsements are valued higher in comparison to reviews on marketplaces like JustDial.
Repeat Transactions:
All the above three finally culminate to one big number that matters. While Marketplaces like Flipkart, who today boast of over a hundred thousand transactions everyday, with one in every 200 users transacting, have no comparisons, Market Networks have the ability to come close to recreating such repeat transactions due to high pay off repeat nature of the projects in an environment that fosters long term relationship.
Summarizing, Market Networks like AngelList and Behance enable creation of ‘Long Term Relationship’ via ‘Strong Referrals’ while facilitating ‘High Volume of Transaction’ each of ‘High Transaction Value’, and as James Currier puts it: “Combining the best elements of both Marketplaces and Networks”.
A great read — the shorter version of James Currier’s essay, named “From Social Networks to Market Networks” also appeared on Techcrunch in June 2015.
