NPC 2015: Growth Hacking Marketplaces by Amit Somani, Managing Partner, Prime Venture Partners

Growth Hacking Marketplaces

@amitsomani

Managing Partner

What is a marketplace?

•  Drama:cally Increase the Customer Experience? – E.g. Uber, JustDial (circa 2010)

•  Create new economic value? – HotelTonight, LinkedIn

•  Highly Fragmented – Hotels vs. Flights

•  Does Technology add material value? – E.g. Matchmaking in a Job Site

First, does your marketplace make sense?

© Amit Somani, 2015

Marketplaces giving birth to other Marketplaces!

What is Liquidity?

# of Interac:ons

Consumers Producers

Ok, there are two more metrics

1.  Liquidity, Liquidity, Liquidity

2.  Matching Efficiency

3.  Trust


So, how do you grow Marketplaces?

•  Focus on whatever is more constrained – Demand – Supply

•  Seed the marketplace

•  Op:mize for Liquidity

•  Rinse and Repeat


Solve the RIGHT challenge for Suppliers

•  Supply/Demand Mismatch (e.g. neighborhood salons)

•  Presence (e.g. Car Mechanic, Restaurants) •  Price Discovery (e.g. Farmers, Home Services) •  Differen:ated Service (e.g. Lawyer, Doctor). •  Margins (e.g. Hotels, ) •  Does not understand Technology (All ☺)


Examples of Supply Constrained Marketplaces

•  “Branded” Budget Accommoda:ons in India (a la OyoRooms)

•  Alterna:ve Accommoda:ons, esp. in high end markets (a la AirBNB)

•  Teachers for tutoring students •  Blue collar workers e.g. House Help, Drivers, On Demand workers, etc.


1/2: Most marketplaces are DEMAND constrained

•  Create value for a “single” customer/user – E.g. LinkedIn profile has value independent of Network

•  Build a Killer Customer Experience •  Start in a Niche – Hyperlocal, Group, etc. •  Time Shie Demand and Supply •  Create demand “manually” (organic + paid) •  “Hack” demand from an exis:ng source

– E.g. AirBNB from Craigslist


2/2: Most marketplaces are DEMAND constrained

•  Focus on “agrac:ve supply” that is scarce E.g. –  A BMW as a taxi-‐cab (Uber) –  Ren:ng an SUV (Zoomcar) –  Golf lessons from a Top Coach (GolfLAN) –  Top Speakers at a Conference (eg. Evan Spiegel@NPC)

•  Build “Localized/Niche” Network value –  Do a neigborhood first before doing a city or a country –  E.g. Qikwell for Docs, Uber in SFO

•  Leverage Influencers and PR (e.g. free drop to IPL game)


P/M fit for a marketplace?

•  # of interac:ons on plamorm •  Trust metric (e.g. Reviews, Net Promoter Score, etc.)

•  Time to liquidity for a new supplier •  Referrals kicking in:

– Customers genng more customers – Magic:

•  Customers genng Suppliers and Vice Versa


Summary 1.  Op:mize for LIQUIDITY 2.  Focus on the constrained part of

Demand or Supply 3.  Fake it :ll you make it! 4.  Build Trust in the marketplace 5.  Enable Referrals/Virality for

Growth © Amit Somani, 2015

@amitsomani

Managing Partner

Thank you!

NPC 2015: Growth Hacking Marketplaces by Amit Somani, Managing Partner, Prime Venture Partners

Marketing

Transcript of NPC 2015: Growth Hacking Marketplaces by Amit Somani, Managing Partner, Prime Venture Partners