Max Brun discusses when marketplaces should expand beyond their core business. He covers the tension between adding new services too early versus waiting for strong product-market fit, and uses fintech companies that moved into expense management as examples of successful adjacent expansion.
Chapters
As far as like when it comes to marketplaces, a lot of times here is, you know, earlier to kind of, you know, mid-stage teams, you know, we're thinking about like the importance of, you know, sequencing, right? And like if and kind of when to expand or kind of, you know, layer on a new kind of service or category. So, you know, how do you think about that now even kind of working with and investing in marketplaces?
Look, in a world of infinite money, it was easy to parallelize these things, right? Again, back to make sure that people don't learn the lesson today that was inferred from a different environment back then. That being said, I do think there are dangers in going too long for one, with one business line past the point where you have product-market fit and not starting to think about what the next iteration of The new business should be. Now, is it possible that the one thing you have product market fit at is so explosive that it just makes sense to do that and nothing else? Of course, there are situations like that. But oftentimes, you know, I think you see this with a lot of fintech players today, you know, not marketplaces necessarily, but they like, oh, we're going to have a credit card for corporations, one product, or I'm going to have a banking account with a really cheap debit card thing. And they did well on that, but then all of a sudden they sort of saturated that market. And then you're like, okay, well, what's the next thing? And it turns out for some of these companies, like, well, now it's doing expense management software, and now that takes a year and a half to build, and there's incumbent players. And so you don't want to do this serially too much if you have one product that has product-market fit. If you don't have that, then yes, it's much more dangerous to be spreading your bets too wide too early in this economic environment.
