,
6 tweets,
2 min read
Read on Twitter
Not surprisingly, this was so so good. Master class on network effects and marketplaces with tons of specific examples and insights.
"do unscalable things to build a network"
"liquidity quality matters more than liquidity breadth"
"marketplaces built around monogamy e.g. doctors, haircutters, babysitters much harder to scale than marketplaces built around promiscuity e.g. restaurants"
"liquidity quality matters more than liquidity breadth"
"marketplaces built around monogamy e.g. doctors, haircutters, babysitters much harder to scale than marketplaces built around promiscuity e.g. restaurants"
"Have come to be skeptical of supplier acquisition as differentiator in marketplaces. Demand is the game"
"Fragmented supply, high frequency, SMB suppliers, young businesses are characteristics of wildly successful investments"
"Fragmented supply, high frequency, SMB suppliers, young businesses are characteristics of wildly successful investments"
"Super high marketing expenses usually sign there's no network effect. These tend to act as outsourced marketing agencies, buying demand cheap and selling it on"
Travel pretty clearly qualifies for supplier acquisition driven outsourced marketing yet BKNG + EXPE = $100B mkt cap
Travel pretty clearly qualifies for supplier acquisition driven outsourced marketing yet BKNG + EXPE = $100B mkt cap
Thinking about this more, travel pretty clearly an outlier to his framework, because Gurley loves UGC and finds that as a natural ramp to network effects, yet TRIP worth far less than either of the two booking sites, which are marketing machines.
Reminds me of this thought around reviews. Why in some categories has UGC led to a dominant position, and in others the transactional businesses have earned the lion share of profits?
