How to Kickstart and Scale a Marketplace Business

The research points to two ways to constrain a marketplace: (1) by geography, and (2) by category. If the offering requires supply and demand to be in the same physical location, the constraint is always geographical (e.g. a limited set of markets). Otherwise, it’s category-based (e.g. handmade goods).

The first major learning that emerged from this research is that, with the exception of one company, every single marketplace that I interviewed constrained their initial marketplace to more quickly get to critical mass.

Step 1: Constrain the marketplace