Traditional marketplaces are similar in operations to that carried out online where buyers meets with sellers, only that one is physical while the other is through a web interface. Both marketplaces requires two or more independent groups of customers to come together at a spot to interact. The former have been around for a while but online marketplaces have been dominating the startup scene for sometime now and are still increasing in numbers. Examples of such marketplaces are Uber, Airbnb, StubHub, Lyft, Thumbtack, Storefront, Carmudi, Konga etc.
Online marketplaces comes with a lot of challenges to successfully run it. As explained in the Business Model Generation book by Alexander Osterwalder and Yves Pigneur, “multisided platforms grows in value to the extent that it attracts more users” i.e both ends of the model needs to work for the platform to become valuable. Customers on one end of the model derives value when customers at the other end of the model are available. This creates complications for founders of such startups in trying to manage, create and derive value from its multisided platform. Tristan Pollock, a successful entrepreneur, investor and co-founder of Storefront, (the online marketplace that connects makers with physical retail space), shares some of the typical mistakes online marketplace founders make that are capable of killing a startup. These 14 mistakes were gathered from founders of world leading marketplace companies such as Airbnb, Odesk, Etsy etc. and presented in an article on http://www.500.co.
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