2011 The Year of The Marketplace and How to Win

I got some quick advice from Gary Swart of ODesk and he said the best way to build a marketplace is to make sure the “buyer” and “seller” are the same person. If they aren’t the same person building a marketplace will be very costly and time consuming.

Lets take a look at eBay. Buyer and Seller are practically the same person. You only really need to market to one type of person and both sides of your marketplace grows.

Now for example lets look at Twitter. I joined twitter to just follow a few people. After a few weeks I started tweeting as well. Same thing happened with me on Quora. The “follower” became the “contributor”. You will see similar patterns with StackOverflow, Airbnb, StumbleUpon, and Fon.

If you take a look at ODesk or Etsy (both very successful companies) they both spend a lot of time and money on advertising (Search Engine Marketing in ODesk’s case and Grass Roots Community Building in Etsy’s case).

Conclusion: If you want to build a marketplace make sure you only have to market to one person.

This blog post was inspired by a tweet my buddy Noah posted a few days ago.