Product

I’ve been thinking about marketplaces a lot lately.

One recent observation is that the value of a marketplace is often correlated to the potential upside for the supply side. For example, the average Airbnb ($72B) host earns way more than the average Poshmark ($1B) seller.

Potential upside is also often correlated to supply-side frequency and retention. A Door Dasher earning a part-time to full-time living on the platform is much more likely to return than a parent selling their kid's bike on Craiglist.

@jayme what are your thoughts on marketplaces to sell businesses? We are currently seeing a massive transfer of wealth from older generations to younger ones. And with this, I believe we will also start to see a huge, digital transformation, largely kickstarted by marketplaces like this.

“We suffer more in imagination than in reality” — Seneca icbk.me/zachharris.eth

I think their business model leans on organic acquisition channels and long tail search keywords to leverage thought leadership to create an organic content flywheel to drive acquisitions based on past happy past customers. So, word-of-mouth is the viral coefficient for new bus.

But, I concur w many of your points.

My gut says that this is a really tough business to build because you have low to no frequency on both sides of the marketplace and you churn customers every time you make a successful match. 

The pro is that it’s high margin on big sales so you have a lot of marketing dollars to work with. 

I bet the ones that fundraised pitch that they will help the new acquired with all these value add services to run the business until they want to sell it.