All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces - Above the Crowd

Two main ones. One is fragmentation of the marketplace. I often have used the difference between OpenTable and Fandango in explaining this. OpenTable, the average restaurant owner on OpenTable owns one restaurant. And so aggregating them is a pain in the ass. But once you've aggregated them, it's a very valuable thing.

Service marketplaces must continuously provide value in terms of either discovery, convenience or trust. In line with this, successful service marketplaces tend to be either repeated-discovery, online-first or SaaS-enabled.

Vertical service marketplaces can optimize around one or a few adjacent verticals, but the low frequency of most verticals (other than cleaning and lawn care) creates challenges.

2.0 marketplaces possess the following qualities:

Uber is the quintessential example of a marketplace with low transaction complexity and asymmetry. Matching demand and supply is simply a function of availability and pickup time — commissions are the obvious fit here. On the other hand, marketplaces like Classpass and Scoutbee avoid commissions entirely.