Heterogeneous - search marketplaces, guests are responsible for finding their desired listing. Once you have unique supply, it is up to the product team to build a compelling demand-side product experience that simplifies search, creating as much of a one-click purchasing experience as possible.
Homogeneous - matching marketplaces, where demand doesn’t care which supply they receive as long as it is above the standard.
Homogeneous marketplaces compete on other aspects of the product offering, like price, greater loyalty, brand distinction, or what values the marketplace ultimately stands for
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Another factor that dictates the dynamics of the marketplace tremendously is the uniqueness of your supply.
Airbnb offers heterogeneous supply, meaning that each listing is unique. This creates a competitive moat — it is hard to replicate that supply — and an inherent advantage to Airbnb. H...
There are four key factors that shape every marketplace:
Understanding those factors — and structuring your platform accordingly — can make the difference between a wildl...
All marketplaces exhibit a form of network effects, where each additional user on either the demand side or the supply side enhances the utility of the network for all users.
Airbnb has global network effects because travel is global. Companies like DoorDash and TaskRabbit have root densit...
Simplistically, a marketplace is a place where buyers and sellers meet to conduct commerce. In the online setting, that definition still holds true — online marketplaces give buyers a choice in what they would like to buy and sellers a variety of people to sell to. I classify Airbnb as a search m...
There are two broad incentives to keep transactions on the platform: trust and convenience.
Technology can bridge trust by offering:
The size and frequency of interaction in a marketplace are paramount to its health. Frequency of interaction determines how much liquidity there is on the platform. . Larger-dollar transactions are better for the platform because they generate more economic activity. Some businesses are high doll...
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