What's Next for Marketplace Startups

The past and future of marketplace startups -- where are we? Ever since eBay popularized an internet meeting place for buyers and sellers of, well, just about everything, we've been waiting for 100 other at-scale marketplaces for everything else, including services.
In this hallway conversation, Frank Chen and Li Jin from a16z's Deal & Research team talk about why there aren't 100 thriving marketplaces for services yet -- and what's changing to make this next wave of marketplace startups super exciting.
You can also see a related post on the topic by Li Jin and Andrew Chen at:
a16z.com/2018/11/27/services-...
***
The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the enduring accuracy of the information or its appropriateness for a given situation.
This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments and certain publicly traded cryptocurrencies/ digital assets for which the issuer has not provided permission for a16z to disclose publicly) is available at a16z.com/investments/.
Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see a16z.com/disclosures for additional important information.

[@abhishekmishra-zm9kx]

In managed marketplaces, you are basically managing the supply side of things. You can never really change the demand (consumer trends/sentiments). So if you want to start a consumer marketplace startup you need to find out what are the areas where consumers need a better experience (10x better than the current). Then you'll need to see if the supply side of that marketplace can be managed to enhance the consumer experience. If yes, then it might probably work (but never assume that if you build it, demand will be automatically generated, instead build if demand is already there). Demand should be enormous and very frequent as opposed to operating in a niche sector. Good examples can be Healthcare (Flatiron, USA), Education (Lambda, USA), Hospitality (OYO, India), etc. This can be applied to SMBs as well.

[@SirBrassknuckles]

GOAT competed with Ebay for "Authentic" items and killed it.

[@HBrown-cc6wv]

I am a small business owner in the rocky mountain west. (Not a technology company) but this youtube channel and blog posts are helpful for all. thank you.

[@graemeroberts2935]

I loved this hallway conversation. It was very exciting, and I kept thinking of young friends to send it to. It's also just great news that many bad marketplaces are "under attack" by market forces. The great numbers of mediocre doctors, lawyers, tradespeople, and more who abuse their sinecure, often in working class or poor areas, just won't be able to get away with it under managed programs. And there's now a fair chance that plumbers will be excellent.

[@bluezcluez315]

Great content all around. Really enjoyed the series about autonomous vehicles and how many industries the technology can / will disrupt, especially as an entrepreneur working in that space. Keep it coming!

[@asiawff]

Great content, I've learned a lot thanks to you. Deep analysis and natural presentation, really perfect

[@reynergiovanni]

Love this content, definitely need more!

[@someshk02]

Awesome discussion, thanks for the research and sharing your findings, opportunities and strategies.

[@RyanIng]

24:26 "the best marketplace companies that tap into latent demand that consumers have, but are unable to access today" aka a lot of unmet demand So the constraint will be in the supply instead of the demand really brilliant conversation

[@felipebetancourtcelis9081]

Loved it. Thanks for sharing!

[@FerdinandPrinz]

Thanks for the valuable insights! Impressive talk

[@triptop3703]

Li is amazing!💗💗💗💗

[@originally11]

Thanks, very insightful and practical!

[@MikeWilliamsYoroomie]

Great high-level overview! Would love to see another video as a follow-up that drills down into a specific vertical and examples.

[@apkhurana]

I second that

[@artshorts5157]

Great conversation!

[@RulezPUnk]

Really insightful

[@chimaohiagbaji9469]

Great video! Am currently working on a few marketplace Platforms to launch in Nigeria and this video gave me a lot of insight, more importantly, from the perspective of an investor. Well done, I love to see more videos along this lines.

[@igweuguru]

Hi @chima, how is your marketplace moving?

[@vjay6667]

I’m also interested to know how it’s going. Thanks

[@ownnit5573]

This was great

[@aishaibrahimabbas5867]

Valuable content

[@serbrad6426]

great

[@lucanthony2209]

Is education/Academic market places for student is the next era of market places since there is a huge demand but not enough supply?

[@alexcipriani6003]

also interested in doing something in this space would love to hear them talk about it

[@TheHellogs4444]

I'd say the problem is more with students being unable to pay than anything. Everything we students use rn is opensource or built by students with that audience in mind. It's hard to monetize cash strapped teenagers without monetizing very hard things like attention and data (FB, tiktok, etc.)

[@RuilinLinRyan]

Would Atrium (founded by Justin Kan) be considered a managed marketplace for corporate lawyers? I'm trying to understand the idea of a managed marketplace

[@khairulimran1269]

Failed

[@RuilinLinRyan]

30:30 onward, I'm confused about a managed marketplace. A marketplace of that type will have the professionals on their books as employees? Which in that case how is that still a marketplace?

[@DaveCraige]

Exactly. That doesn't really make sense. They are employers.

[@PallavMathur10]

No. Managed marketplace is where you control the quality of the supply side. They still don't get employee benefits and are mostly contractors, but there are checks and balances to control this supply quantitatively or qualitatively.

[@theworldisastage3425]

I'd love to share my idea. My marketplace site is almost finished it is services only. But who can I trust to get help with this to take it to the next level and not cut me out of my own company?

[@artshorts5157]

Hotels.Center ; is also for sale

[@Luminaring]

24:32 Unfilled need...From the creator of the Dodge 'Peterbilt pickup' in '86...Tandem bikes are romantic but poor handling, if only there was a better mechanical solution for all the families of the world...

[@Wolverine_3]

Sir I am working on a marketplace where CTOs can be approached for technical and architecture limitations faced by another companies. On demand basis. If you can provide feedback it would be great.

[@FreshaDenaMofo]

Why can't the CTO's contact their fellow senior CTO's via the likes of LinkedIn? Is this really something they seek?

[@Wolverine_3]

Well they can. But its not happening usually. Unless Credible CTOs open up to help the community.

[@AssadKhan1]

@@Wolverine_3 I'm working on something similar

[@Wolverine_3]

@@AssadKhan1 Sure lets connect if wish to.

[@SriRam-fp1kt]

@@AssadKhan1 how's the progress of your venture?

[@foundingfreedom1537]

6:15 Last 30years Diagram breakdown

[@brandantang9154]

Hi Ms. Jin, How do we get in touch with you? My startup helps alleviate the service inefficiency and quality within the hospitality sector. I’d love to connect and talk with you. Thank you.

[@nustaimo6755]

10:43 more than half of the companies are losing money

[@absbox_]

The solution is pretty obvious now if you think about it. Blockchain and zero commission marketplaces

[@ChielReemer]

What's on the guy's left, behind her, off-screen? It must be fascinating, he can't take his eyes off of it.

[@AssadKhan1]

Haha yes Now I can't stop noticing

[@graemeroberts2935]

He might be just avoiding looking at her too much. Intelligent men are not unaware that looking can seem lascivious. A young woman about to graduate from the business school that I attended asked me for advice, and we met at Starbucks. She was a beautiful, buxom, young Indian woman, and was wearing an unusually low-cut dress. What should have been a very pleasant experience was excruciating, as I tried any and every way to keep my away from her breasts. I know that wasn't the situation here, but we are now hypersensitive.

[@nicholasroosa]

Its actually an illusion of the table and camera angle. He is looking at her, but it looks as if he is looking away, or behind her.

[@serbrad6426]

not various

[@basenvy]

please let's not use "sausage factory" as a term ever

[@georgeaguilarhemminger4726]

Great information. Her speech pattern is somewhat annoying. “Upspeak” makes it very hard to listen

[@graemeroberts2935]

And starting every response with "so," a Silicon Valley pretension that I found charming at first.

[@madmathematician4458]

The vast majority of major online businesses are service based organizations. This lady doesn’t know what she is talking about.