Takeaways and Highlights of The Marketplace Conference

Updated: Feb 22

1th & 2nd December 2020


4 Strategies to make the most out of a Crisis

Speakers: @JeroenArts Associate Partner @Speedinvest @JoergGerbig, Co-Founder & COO @JustEatTakeaway @MathiasOckenfels, General Partner @Speedinvest

  1. Support your base: increase flexibility without hurting your suppliers

  2. Leverage the crisis as an opportunity to increase market share

  3. Turn emergency pivots into long-term business model extensions

  4. Leverage the crisis as an opportunity to increase digital adoption: Provide free tech infrastructure to lock-in market

What Early-Stage Investors Look for in Marketplace Investments

Moderator: @AlGuerrero Managing Director @SiliconValleyBank

Speakers: @DanielHoffer Managing Director @AutotechVentures @AnnMiura-Ko General Partner @Floodgate


- Need to be able to sell a story: the company is going to change the world and have an impact

- In the Seed stage, the team and the product-market fit are the most important things

- #COHORTS

- How early to engage with investors to build a relationship? It's like a marriage. Make to be sure is the right partner: style, chemical


Growth Lessons From India’s Largest B2B Wholesale Market

Moderator: @HansTung Managing Partner @GGVCapital

Speaker: @VaibhavGupta Co-Founder @udaan

- Since 2015 mobile internet change how business is made because of its massive access

- Revenue vs GMV: Establish the potential and dimension of the market before focusing on revenue


Once You've Nailed It, Ideas on How to Scale It

Speaker: @EdBaker Investor & Entrepreneur @Whoop @Uber @Facebook


- Find your product-market fit first

- Optimize your viral loop: See-->Signup-->Use-->Share-->See

- Remove Barriers (price, etc.)

- Internationalize your product

- Focus on Retention at scale: Growth = Acquisition - Churn + Re-engagement


From Good to Great: How to Ace Your Marketplace Fundraise

Speakers: @Philip Specht Principal @SpeedinvestNetworkEffects @JustinDaRosa Vice President @BatteryVentures

Pre-Seed

-Market Size & Monetization Potential: From Focus on GMV to Asses gross margin potential

-Competitor Analysis: From analysis on two axes to detailed competitive analysis

-Market Research: Quoting selective study results to comprehensive market insights

-Customer and expert insights: From simple customer survey to Interview (audio)-transcripts

-Achievements & Product Validation: From MVP First screenshots to systematic user-centric testing

-Network Effects: From a world in this topic to show an in-depth understanding of network effects play.

-Forecast: From long term revenue forecast to detailed 18-month budget

- Relevant KPIs: # waitlisted users, # sign-ups, relevant actions taken (profiles created), engagement/repeat rates of beta-testers, pilot agreements, the pipeline of advanced conversations

Early-Stage


- Product-Market Fit: Engagement, repeat rates, stickiness.

-Use #COHORTS for Active Customers, Number of orders, and Average Order Value, Revenue retention, etc.



Growth Stage

Growth at scale and efficiency

- # COHORTS segmentation

-S hare of wallet tells how vital you are becoming on both the demand and supply sides. Assess share of wallet = actual demand / potential demand of the customer

-Growth efficiency metrics: LTV/CAC Customer Acquisition Cost: fully-loaded number including salaries, overhead, tools, etc.; Include non-media costs such as referral costs, free trials, etc.; Include supply-side acquisition costs; Distinguish between paid CAC vs blended CAC, Look at numbers by channel


How to Monetize Your Marketplace Without Alienating Users?

Speaker: @SameerSingh @breadcrumb.vc and Advisor @TheNTWK

- Startups built on network effects are more complex to monetize than those with traditional business models

- Depend on the nature of the marketplace you will determine who you charge to

- On marketplaces, demand-supply relationships are primarily governed by 2 factors: Transaction complexity and degree of asymmetry.

Monetization types:

1. Commission (or interaction taxes): Enable transaction and take a cut.

2.Paywallet Marketplaces: charge one side for access to the marketplace.

3.Premium Network Tier: Enhanced matching opportunities for a fee.

4.Advertising: Tricky balancing act with default monetization option.

5. Complimentary Product: Monetize standalone product that enhances the marketplace's value proposition

6. Derived Product: Rarely used by marketplaces

- Monetization constraints can be changed by layering new forms of network effects


How to Kickstart and Scale a Marketplace Business

Speaker: @LennyRachitsky Investor and Advisor former @Airbnb

Phase 1:Cracking the chicken and egg problem

1. Constrain: Either by Geography or Category

2. Concentrate: Decide to concentrate on one side (supply or demand) Supply is generally the King

3.Grow initial Supply tactics:

-Top 3 early supply-growth levers (Direct sales, Piggy-backing, Referrals)

-Not major early supply-growth levers (Performance marketing, SEO)

4. Get initial demand:

-Top 3 early demand-growth levers (Word of mouth, Supply driving your demand, SEO)

-Not major early demand-growth levers (Sales, Referrals)

Phase 2: Scale your marketplace

1.Supply vs. demand constrained

2.Scale growth levers: Performance marketing, Expanding geographically, Conversion (top 3)

3.Maintain quality: Standards + penalties, Manually onboard, Reviews (top 3)

4.What would you do differently: more focus, more aggressive, Think longer-term (top 3)


Hierarchy of Marketplaces

Speaker: @SaraTavel General Partner @Benchmark

  1. Focus: Minimum Viable Happyness, not grow. End to end transaction experience > Focus on a constrained problem, product, and policy. How to measure? #COHORTS each process of your marketplace

  2. Tip: Tipping is when your network effects come alive when your flywheel spinning faster. Focus on identifying the loops! 6 obstacles to tipping the market: Competition, fragmentation, Disequilibrium between both sides, Regulation, Homogeneity of the buyer, Inability to corner the buyer side

  3. Dominate: Become #1 by a wide margin, the bigger you are than the #2, the less you need to subsidize the growth and more value you are able to create and capture

- Never rest on your laurels


4 Questions Every Marketplace Needs to Answer

Speaker: @JonathanGolden Partner @NEA

Four key factors shape every marketplace:

  1. Network Effects: Global network effects businesses tend to grow more organically and root density network effects businesses tend to grow supply in more concentrated ways

  2. Type of Supply: Heterogeneous supply creates a competitive moat but increases the cognitive load on the demand side creating a search marketplace. Homogeneous marketplaces offer the same supply making it easier to replicate the business. A huge benefit is that decreases the cognitive load on the demand side, creating a simpler transactional experience

  3. Two-sided Incentives: Avoid market-breakage by creating Trust ( Identity Verification, Reviews, Assurance) and Convenience (Payments, Messaging, Transactions)

  4. Size & Frequency of interaction: Making sure that transaction volume is thriving is more important to a new marketplace than getting the largest take-rate


Reimagining the Customer Experience for a New World

Speaker: @SidSuri Head of Marketing @Sendbird


- Community drives commerce

- Conversation: Chat id the new center of the transaction

- Live commerce: instead of static




The State of Marketplaces Report

Speaker: @RogerLee General Partner @BatteryVentures


A new paradigm brings new possibilities, COVID-19 effects:

(+) Digital Health: Fast-tracked regulatory and policy change

(+) Future of work: Accelerated the rise of the freelancer

(+) EdTech: Expedited the adoption of digital tools that supplement offline behavior

(+) E-commerce: Highlighted the efficiency of online shopping for all goods

(+) Digital Entertainment: Unlocked new use cases

(-) Travel: Suspended flights and border closures have halted travel overnight

(-) Events & Ticketing: Mandated quarantine canceled, rescheduled, and modified live events

As a new status quo is established, what’s important to understand and prioritize?

1. Efficiency is Always Relevant: “Growth at all costs” mentality is done, and efficiency is king, The Rule of 40: Efficiency drives superior returns.

2.Prepare Your Workforce For the New Normal: Ensure your employees have the right skills and willingness to embrace change

3. Ensure You’re Indexed to the Right Behavioral Trends: Consumers are embracing new behavior and habits – many of which will endure after COVID-19


Slice and the Future of Food Delivery

Moderator: @FrabriceGrinda, Founding Partner @FJLabs

Speaker: @IlirSela, Founder & CEO @Slice

- Digital transformation is still in an Early Stage in the food industry

- Less than 10% of pizza delivery and pick up is digital today