Marketplace Checklist

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Marketplace Checklist: 15 Questions

1. Which side of the network values the other side more?

2. Is there an effective and proprietary method for distribution to each side of the marketplace, especially the more highly valued side?

3. How strong are cross-side network effects, is there a metric that can measure that, and how has it tracked over the last year?

4. Are there same-side network effects, and how strong are they?

5. What are switching costs for each side?

6. What are LTV and CAC for demand and supply side?

7. What does liquidity look like, and how do you measure it (e.g. average amount of time from supply being posted to fulfilled/met with demand)?

8. What is frequency of use (transactions per month) for demand and supply side?

9. What is average transaction size for demand and supply side?

10. What is the marketplace take rate or monetization model, and what is the the sustainable take rate over time and why?

11. Does it get easier to acquire incremental supply and incremental demand as this marketplace grows?

12. How fragmented is supply side?

13. Is there an initial focus on one or two geographies or categories, and how strong are the network effects there?

14. What is the winning strategy for that initial market, and what is the plan to scale beyond that?

15. Is there a new product enhancement to the marketplace/transactional user experience, such as Eat24 allowing more convenient food ordering from a mobile app vs. the old model of making phone calls and needing a paper menu?