Marketplace founders should nail product-market fit before monetizing. Start by identifying an underserved audience, then build a flywheel that keeps supply and demand in balance. Once you have that, transaction fees, advertising, and subscription models like DashPass or Uber One can work.
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So do you have any tips maybe for early-stage marketplace founders that might be helpful? Yeah, I'd say like, look, I've been working on monetization for a while and I'd say like, if you're early stage, I think you wanna focus on product before monetization, right? I think, and here's my definition, right? Basically by organic, I mean your organic product is a product that is solving a problem for your chosen user, right? I mean, you're, you know, whether you're serving, um, you know, you're the babysitting problem with SitterCity, or the dog walking problem with Rover, or the high tops problem with StockX, right? Just make sure you solve that problem, which is you're aggregating supply, um, for the right, for the right sort of demand, right? So let me, let me, let me share this one mental framework, Debbie, that that was built at Facebook, which is identify a problem with a given— say you're choosing a space, right? Let's say you wanna— let's say like you wanna build an online pharmacy. This is like a pretty dumb example, but just, you know, just gonna— let's go along with it, right? Sure. Figure out what is the most underserved audience and sort of the drug that they want, right? By drug, I mean like, you know, tablets and medicines and stuff, right? Once you know what that audience is like, be really focused on that and then aggregate supply. So first start with demand, find the problem, aggregate relevant supply, make sure you have simple rules to match. Well, make sure you have the right mechanism to acquire that demand. Make sure you onboard enough supply so there's enough selection for the demand side. Create simple rules for connecting demand and supply. Make sure you know your acquisition channels for demand and supply, and then get that flywheel going and make sure your product market fit, right? I think that's like the fundamental stuff, right? I think the monetization stuff can come later on, right? I think once you have product market fit, you can figure out, hey, look, you know, I'm making 15% on every order or on every transaction. How can I increase that? How can I increase revenue? Right? Then you can say, hey, you know, actually I'm gonna throw in some ads. I'm gonna throw in a subscription. Like, you know, so if you look at DoorDash, they've got DashPass. If you look at, I think Uber, Uber's got Uber One. So when you have a high, you can increase, you can introduce a subscription on either the demand side or the supply side for the power users because they wanna decrease their marginal cost of high volume consumption. Right? And eBay has got eBay Stores on the supply side because they want to list a lot of stuff. So they actually want a discount on the listing fee. They want a discount on other stuff. Um, DashPass, DoorDash consumers want free delivery because they're ordering every day, right? So I think this is the kind of stuff you can do later on, but this first you got to figure out the product-market fit on, on both sides.
