B2B marketplace founders should validate take rates at seed stage, not delay it. Pairing take rates with ancillary revenue like seller financing, specialty freight brokerage, or workflow software creates more predictable cash flow and signals product-market fit to investors.
Do you have a preference as far as like demonstrating take rate and, you know, at what stage you like to see that, you know, a B2B marketplace can, can demonstrate that?
Yeah. So I don't know if we've been lucky here, but I have, I have struggled with marketplace pitches where they say, we'll figure out take rate later. Basically running at like Zero or negative take rates. To me, it's just sort of kicking the can down the road in terms of when you can validate if there's real product market fit for your marketplace to exist. I mean, like, you know, I can— you can kind of— what is it, sell a dollar for 80 cents all day long. So So I would— I skew much more heavily towards having some kind of take rate out of the gate, and then with visibility to improving that take rate over time. The marketplaces that we've invested in to date are all— they've all started even at the seed stage with a relevant take rate. Now, like, I think you're gonna see this a lot. is like take rates not going to be the only sort of revenue stream for these businesses. And I think over time, particularly in some of these materials-based marketplaces where you might even have like commodity risk, like in the, in the example with Rebus, you want to diversify your revenue streams. You know, take rates are great. They're really unpredictable. So as you get further down the road, Investors have a hard time forecasting your business because you start every day at zero. So if you, if you do add other revenue lines, if you do add things like— so at Rebus, we are, we have a financing offering now. We've also rolled out an entire basically like digital freight brokerage for these like specialty, like flatbed trucks that they use to move these massive steel coils. So these are all new kind of ancillary revenue streams that have much more predictability behind them. Another one you see often is like people building this workflow software, or having an API that plugs into your inventory management system. I mean, these are all things that we're starting to see that ultimately are value-add and give a little bit more visibility. But to answer your question, I am a big fan of validating take rate in your market early on. I would, I would even say validating it before you really Start your marketplace.
Yeah, it comes up all the time in B2B marketplaces specifically. So definitely I wanted to kind of ask and, you know, get your take on that.
Yeah. And look, like there are some very large marketplaces today that are still trying to figure out take rate or operating on like a negative gross margin, but I don't see how they can have successful exits without proving to the market that they're capable of getting the take rates unless there's some bigger play that they're like, a lot of folks will say we're going to do something with all the data that we're collecting, or there's some other end goal. So there's, there's totally kind of edge cases for this stuff. But I think, I think on the whole, product market fit to me includes take rate validation.
