Ameet Shah, partner at Golden Ventures, on the economics of vertical SaaS marketplaces

The more complex and fragmented the market, the more likely you will have these many-to-many relationships, which get harder to manage without a software layer.

Consumer marketplaces thrive on high frequency, and B2B marketplaces need tons of volume. 

If demand can only buy more from the supply side once they sell the goods because of balance sheet limitations, then payment terms are really important.

We love asset-light or asset-less B2B marketplaces that use existing infrastructure and think building endpoints to access that infrastructure is the future.

We've learned over the years that B2B marketplaces are poorly positioned to own customer support on behalf of supply and demand, given the complexity of what follows a transaction.

I do think that bringing the marketplace functionality too early can be a burden on the company, especially one that's not capitalized well... offer something with high intrinsic value and low marginal cost, start getting customers hooked into that workflow, and then expand into other parts of the workflow that leave you well-positioned to launch a... See more

Another way to think about [expanding a company into an adjacent market] is, will this new offering contribute back to your growth function. Let's say that for a marketplace, growth is a function of GMV, take rate, frequency of orders, size of orders, AOV, all that stuff. The new product offering should have a neutral to positive impact on those va... See more

The other thing that we’re seeing is that there are so many agents and aggregators up and down the stack in many industries. These represent opportunities for integrated software solutions to streamline the process. We think about how these low-value brokers and inefficient workflows can be replaced by machine-to-machine transactions. The value acc... See more

When considering building a marketplace, there are many decisions you have to make upfront, particularly whether they want to own the infrastructure or partner with the best-in-class partner or provider. For example, if you were starting a marketplace four or five years ago, you probably were building a lot of this stuff yourself. But suppose I’m b... See more