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Marketplaces. Where can we take them? Written by Cody Brooks (Medium Link)

• A marketplace is a business model that connects supply and demand. In recent history, we have seen marketplaces transition from physical locations to digital platforms, expanding our ability to access virtually anything. Acting as an aggregator of supply and demand to enable transactions, it is reasonable to assume that wherever the synergistic relationship between supply and demand can be identified and contained, there is an opportunity for a marketplace to emerge and facilitate interactions between the two sides. However, not every marketplace will succeed. Supply and demand ebbs and flows, customers give and take, all while the business simultaneously tries to straddle both sides. But if you are able to facilitate interaction with minimum friction, marketplaces can experience organic and dynamic growth.


• While there are many important factors contributing to the success of a marketplace, the business model has done very well over time because of its inherent strengths. An important characteristic is network effects – You may ask, "If my marketplace adds additional customers, will current customers have a better experience?", to address this characteristic. A marketplace with network effects can build a virtuous cycle of scaling as participants gain additional value, become more engaged, and there is an expectation of transactions taking place (i.e. marketplace liquidity).


• Three categories where supply and demand are readily observable are goods, services, and experiences.


• Digitally native marketplaces have transformed the way goods are bought and sold online with the creation of e-commerce giants (Amazon, Alibaba, eBay, Wayfair, and others).


• Service marketplaces have reshaped fulfillment of both consumer and business needs (Upwork, Uber, Lyft, Airbnb, Grubhub, and others). We are in just the beginning of this era as the service industry makes up ~70% of consumer spending, but just ~7% of services utilize the internet to facilitate these transactions. New service marketplaces will emerge, driven by unlocking complex or regulated services.


• The third category where marketplaces could emerge is experiences (social, emotional, travel, etc.), and this seems to be a much more difficult supply and demand to pin-down bottoms-up; however, experiences drive us by tapping into social, emotional, and other intangible qualities through moments, engagement, impressions, etc. The easiest example of this is to look at the rise of dating apps (Hinge, Bumble, Tinder) or types of travel arrangements / social events (Airbnb Experiences, Meetup, Jetzy, and others). If you find yourself in a new location and look for an experience, one thing is apparent: this is a massive, disjointed, and highly fragmented market.


• While experiences can be a property of current goods or service marketplaces, it is important to consider separation of experiences and isolating the strong experiential/emotional trigger driving social and emotional engagement and be open to what will emerge. Why is it less present now? Will this space be opened as more data is collected from us? Will we see marketplaces for experiences in wave of AR/VR/MR/XR...? (time will tell).


• With this information, a question we can ask is -- as opportunities are discovered and the trend for marketplaces accelerates over the next decade, what will be the next "different animal & the same beast"? [Kobe]