, 7 tweets, 2 min read Read on Twitter
1/ Creating a new on-line marketplace is vastly easier if:

a. Supply and/or demand sides of the market are fragmented,
b. Value for participants increases with the number of participants,
c. High market liquidity (after bootstrap), and
d. Market maker is in the payment flow.
2/ Best practices include: a) doing things that don't scale at first to solve the "chicken and egg" problem, b) creating low sign up friction, c) offering complementary products and services and new experiences; and d) adding new value for participants with technology.
3/ A market "side" that receives a subsidy tends to: (1) have more elastic demand; (2) be an offering that is harder to get; and (3) is needed more by the other side. Subsidizing the side of the multi-sided market with lower marginal cost/COGS is optimal. Falling CAC is a goal.
4/ 25iQuiz: What is the worst pitch for a marketplace that you can imagine?

"Think forwards and backwards — invert, always invert.” “Many hard problems are best solved when they are addressed backward. Figure out what you don’t want and avoid it and you’ll get what you do want."
5/ Who said this recently?

"One of my rules for getting a marketplace off the ground is do tons of unscalable things."

"You have to understand what the end game is and whether you’re building the system where things tip into one another which allows the business to take off."
6/ "Really big effects, lollapalooza effects, will often come only from large combinations of factors. You get a little bit more mass, and you get a nonlinear result." I’ve been searching for lollapalooza results all my life. I’m interested in models explaining their occurrence."
7/ The lollapalooza quote is Charlie Munger and the previous quote is Bill Gurley, who also said in the same podcast: "Increasing returns is a mental model I’ve kept in the back of my mind at every single investment decision we’ve ever made."

Successful market = lollapalooza.
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