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One of the most frequently asked questions from marketplaces founders is what side of the marketplace to focus on.
The answer is BOTH but at different times.
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The answer is BOTH but at different times.
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First step for any marketplace is to bootstrap the initial supply.
Depending on your vertical & competitive landscape there are a number of proven strategies from direct sales to piggy-backing off an existing platform. Good overview by @lennysan here: https://www.lennyrachitsky.com/p/how-to-kickstart-and-scale-a-marketplace-911
Depending on your vertical & competitive landscape there are a number of proven strategies from direct sales to piggy-backing off an existing platform. Good overview by @lennysan here: https://www.lennyrachitsky.com/p/how-to-kickstart-and-scale-a-marketplace-911
But supply never stays unique to your marketplace for long & suppliers start joining other platforms: Uber drivers 
Lyft, AirBnB hosts Homeaway, Etsy sellers AMZ.
So after initially focusing on supply, you now need to shift all of your attention to the demand side.
Lyft, AirBnB hosts Homeaway, Etsy sellers AMZ. So after initially focusing on supply, you now need to shift all of your attention to the demand side.
Long-term you can only build a lasting moat by capturing buyers' mindshare and hence aggregating demand.
To quote @bgurley: "A lesson I have learned many times in my 20 years as a marketplace investor is that aggregating demand is the one & only key." https://twitter.com/bgurley/status/1252701838496825345
To quote @bgurley: "A lesson I have learned many times in my 20 years as a marketplace investor is that aggregating demand is the one & only key." https://twitter.com/bgurley/status/1252701838496825345
How do you win the mindshare of buyers?
One core strategy is to "maximize happiness" of marketplace participants - @sarahtavel's Hierarchy of Marketplaces piece goes deep on how to create "Minimum Viable Happiness" and "Happiness Loops" (as you scale) https://medium.com/@sarahtavel/the-hierarchy-of-marketplaces-introduction-and-level-1-983995aa218e
One core strategy is to "maximize happiness" of marketplace participants - @sarahtavel's Hierarchy of Marketplaces piece goes deep on how to create "Minimum Viable Happiness" and "Happiness Loops" (as you scale) https://medium.com/@sarahtavel/the-hierarchy-of-marketplaces-introduction-and-level-1-983995aa218e
Building a two-sided marketplace is complex but being clear on what to focus on at what stage gives you a better chance of succeeding: supply is most important when you start off but aggregating demand is the only long-term moat.
