Four Paths to Marketplace Success
When building a marketplace, most companies strive to excel on all fronts: high frequency, high retention, and (relatively) high transaction values. Like a hybrid between Amazon and Airbnb, they want to build the kind of habit-forming product users can’t help returning to—and spending lots of money on. It’s the holy grail of marketplaces, and with good reason. It’s not only difficult to achieve, it takes a lot of time.
Luckily, it turns out there’s more than one way to build a successful marketplace. While frequency of use and transaction size are common metrics for determining a product’s potential, the a16z Marketplace 100 revealed some interesting trends.
Four segments emerge.