Recommendations for Craigslist

As you can see from my article on The Evolution of Marketplaces, Craigslist is facing a great unbundling. Startups are attacking Craigslist category by category by offering a better user experience in a safer environment. They are successfully taking share from Craigslist despite the fact that they charge and that Craigslist is free. Moreover, by not addressing a few fundamental issues, Craigslist is failing in its stated mission of providing a free public service to the community. All that said Craigslist has tremendous strengths. The site still has extraordinary liquidity and strong network effects. Despite being out of… Read More

Fantastic article on how to build trust in modern marketplaces to achieve liquidity

Anand Iyer, the Chief Product Officer of Threadflip, just wrote a thoughtful blog post on how to build liquidity in modern marketplaces. In short: Create a managed environment Have an actionable rating systems Carefully curate content Have a human touch, but keep learning Focus on supply Invest in your interface, especially focusing on mobile and frictionless payment Provide social proof Read the full article at: http://firstround.com/article/How-Modern-Marketplaces-Like-Uber-Airbnb-Build-Trust-to-Hit-LiquidityRead More

The Evolution of Marketplaces

In the early days of the web Craigslist’s horizontal listing based marketplace was all things to all people as speed, simplicity and liquidity were the key success factors in the market. A few vertical competitors emerged in the late 1990s and early 2000s, illustrated by sites like Monster, 1stdibs and HomeAway. They typically retained a listing based business model, but offered better content quality and more sophisticated tools and search. In the mid and late 2000s, vertical sites became transactional, managing the payment process and taking a percentage of the proceeds. By closing the transaction loop their reviews also became… Read More

Henry Blodget’s Slides on the Future of Digital: 2013 are a must read

I have had the privilege to see Henry do his “Mary Meeker” impersonation as he effectively flies through 200 slides in less than 1 hour and it’s very impressive. He is articulate, clear and to the point. His new report on the current trends is fantastic. In brief: Half the world is online Smartphone penetration is increasing rapidly globally, especially in emerging markets Android is the clear platform winner People are consuming media and doing transactions on multiple screens with smartphones and tablets taking share away from PCs and the web The rise of mobile is helping create new opportunities,… Read More

3D Printing will change the world

It seems a foregone conclusion that 3D printing will change the world. It’s already revolutionized prototyping, and we’re now getting a glimpse of the technology’s potential in mass customization, medicine and home use. It’s easy to imagine a future where everything is bespoke: even items mass manufactured in China will be complemented with 3D printed customization in stores. Once printers become commonplace in the home, one can conceive printing custom glasses and plates for a dinner party. In medicine, hospitals are already printing structural body components. In labs they are working on printing out organs, though it will be a… Read More

Bill Gurley’s thoughts on marketplaces are a must read!

As you can probably imagine given my recent blog post, Thoughts on building successful vertical marketplaces, marketplaces have been on my mind a lot of late. Last November Bill Gurley from Benchmark wrote a very thoughtful article on the 10 factors that make for successful marketplaces. It’s highly recommended reading for all entrepreneurs interested in marketplaces. Much of his thinking is in line with mine though he did a better job than me of creating a list to allow you to evaluate whether your idea is worthy. Read the full article: All Markets Are… Read More

Great article on optimal take rates in Internet businesses

Bill Gurley is a partner at Benchmark and an investor and on the board of Uber, OpenTable and Zillow amongst others. He just wrote a fantastic article on the optimal pricing strategy for Internet businesses. He makes a compelling argument that companies should have low rakes to establish themselves as the high volume leader and not leave an opening for competitors. Read the full article at: http://abovethecrowd.com/2013/04/18/a-rake-too-far-optimal-platformpricing-strategy/Read More

Thoughts on building successful vertical marketplaces

As you know, I love operating and investing in marketplaces. It’s been interesting over the years to observe which vertical marketplaces take off sustainably and which fizzle, especially in light of the two dominant horizontal liquidity behemoths: eBay and Craigslist. For a while it looked like vertical sites would take away eBay’s business category after category as experts in each vertical with the right community credentials built something better attuned to the needs of that marketplace. Many such sites took off in verticals like high end guitars, audiophile equipment, etc. before fizzling away. Other sites like Stubhub, Airbnb and others… Read More

Could it be that stock photography is the best business ever?

What is surprising about this business to me is how high the take rate is. Most marketplace business take between 1 and 20%: eBay: 12% Airbnb: 13% Stubhub: 25% Etsy: 3.5% Alibaba: Less than 1% What is staggering about the stock photography marketplaces is that they take 50-75% of the sales price: Shutterstock keeps 70% Fotolia keeps 50% Other amazing features: You don’t care at all about the quality of the photographer given that you are buying the picture that you see directly – no need to deal with rating systems, etc. The picture can be sold many times The… Read More