Podcast title: featuring special guests

[00:00:00] Welcome to Two-Sided the Marketplace Podcast, brought to you by Share Tribe.

[00:00:13] Hello and welcome. I'm Sjoerd CMO at Sharetribe, and I am your host. Welcome to the final episode of season two of two. This is not an interview episode, but instead I will attempt to do a summary, a sort of cliff notes of the entire second season by going through what I thought were some interesting takeaways from this season.

[00:00:33] You can also use this episode as a guide to the season to find the episodes you hadn't listened to before that are worth checking out. Although of course, I recommend checking them all out. I have several topics for this recap. I'll shortly introduce each of them and tell you why I think it's worth remembering or revisiting.

[00:00:49] And for each topic will also play some outtakes from the guests that will hopefully drive the point home. But before we go into all of this, since this is the final episode, I just wanna say a couple of things. First of all, this has been a fantastic season. It took a lot longer to get to this than expected, so to those who have waited since the first season, thank you for your patience and continuing support and to all of those who joined us this season for the first time.

[00:01:15] Thank you too. I'm really happy you're here, and I hope to see you next season as. And of course a big, big thanks to all the guests. I realized there is not much upside to doing this and spend an hour of your time with me, but I do know that many people are truly helped by this Also, dear listeners, if you have feedback ideas or if you feel you know, an awesome marketplace entrepreneur I should talk to, if you have any questions about the discussion we've had.

[00:01:42] Please reach out to me. You can reach me@shortsharetribe.com. That is sj oe rd sharetribe.com, or just tweet to at sharetribe and I'll read it. I'd love to hear from you after the end of last season. I got some really inspiring and motivating messages. I love getting them and I'd love to get some more.

[00:02:04] Finally, if you're an inspiring marketplace entrepreneur and you don't yet have a marketplace, but you have a marketplace idea, have a look at share. We build marketplace software, which allows you to get your marketplace platform up and running into the market in a fast, easy, and affordable way. Even if you have no technical chops, you can find us@ww.sharetribe.com.

[00:02:25] Now with all of this out of the way, let's get to it.

[00:02:45] The first. For those who have listened to last season's recap, I'm going to sound a little bit like a broken record, but I swear there are some new insights later on. Since I know a lot of starting founders are listening to this, I cannot stress this first point enough. Start small or constrain your marketplace since last season.

[00:03:04] Andrew Chen from Andreas Horowich, who unfortunately I haven't yet been able to get on a podcast, has provided us with a really good way of talking about this, starting small. He wrote a fantastic book called The Cold Start Problem, where he describes that platform should be looking for their atomic network, which is the smallest network needed that can stand on.

[00:03:25] Its. And as Andrew says in the book, your product First Atomic network is probably smaller and more specific than you think. Not a massive segment of users or a particular customer segments or a city, but instead something tiny, maybe on the order of hundreds of people at a specific moment in time. It was similar for Uber whose networks we tend to talk about as San Francisco or New York, but in the earliest days, the focus was on narrow ephemeral moments more.

[00:03:53] 5:00 PM at the Cal train station at Fifth and King Street. So that's a great example of how small a marketplace can start. Casey Winters, who has been instrumental at GrubHub, Pinterest, and Event Bride, and who has a genuine marketplace and Grove Wizard shared something similar with us in the first episode of the season.

[00:04:12] He talks about the need to know the shape of the network effect that you're looking.

[00:04:17] Yeah, so I think the main goal, and there's not a lot online about this, but we were trying to understand is the shape of the network effect. That you're trying to build. So, uh, ritual is one of these companies I advise and their network effect is how long you're willing to walk for a coffee or lunch.

[00:04:35] That is a very small distance. Whereas compare that to like Etsy, right? Yeah. Etsy's network effect is wherever it can ship. So like that's pretty global, you know, rituals is hyper local. And then a lot of the companies we've talked about, you know, are, are more in between like, You know, mainly it's about cars in the area that you are, but you could also use it when you travel.

[00:04:53] So there are some more global elements. You know, Airbnb, I mainly care about does it have places where I'm traveling today, but if it's adding supply in places I may travel in the future, I'll, I'll at some point, you know, get, get a benefit from that. But your only goal is to get an initial network effect to work, and that's what we call liquidity or product market fit.

[00:05:12] So you don't wanna expand into incremental markets until you have liquidity. in, you know, the network effect that you've decided is the appropriate shape. It could be one market, it could be one category, whatever. Yeah. And then if you manage to unlock that, which is usually the hardest part, you're trying to understand what created that so that you can replicate it in these other markets.

[00:05:33] Yeah. And

[00:05:33] to have another illustration of that atomic network, David Oats from Cury, which nowadays is a marketplace for reselling apparel and is doing more than 25 million annual GMV actually started out as a dress rental marketplace. Not just in one state or in one city, not even in one university, but in one sorority.

[00:05:53] Listen to David sharing their origin story. It

[00:05:56] actually started as a more of like rent the runway, but on college campuses. Specifically like within the sorority system? So my friend from high school, William had a girlfriend at the time and she was in a sorority and he was in a fraternity and he was a computer science major.

[00:06:11] And she was saying that, you know, especially the culture of in the south at these big s e c schools, uh, which is like, you know, the schools that have football and Greek life. Okay, yeah, yeah. It's, it's very centered around dresses. Pretty much every, every single social thing. Football weekend, baseball games, all of the formal events connected to the fraternity and sorority parties, like you need a different dress for all of those.

[00:06:37] And so she calculated that you need something like 20 unique dresses per semester. And some of those are gonna come from, you know, gifted from your parents. Some of those are gonna come from a local boutique, some of those are gonna come from your roommate's closet. But her idea was to create an app where you could list your dresses on it.

[00:06:54] Other people could rent them from you and you would go, yeah, you would go meet in the sorority house. They could try it on and if it fit they could take it for the weekend and then bring it back on Monday. And so that was the, that was the idea. It was just at Ole Miss when we launched, all the rentals were paid for via Venmo and we just ki