Building & Investing in Marketplaces

This is one key insight in Ben Thompson’s famous Aggregation Theory: modern marketplaces get their power from aggregating the demand side. And that’s a much better position than the old way of trying to own the supply side.

Keith Rabois, a general partner at Founders Fund, has another way to think about the concept of network effects. He relates it to what he calls “accumulating advantages.” When Rabois hears a pitch, he looks for evidence that the startup can build momentum so that the business is likely to be more successful every day. “Sometimes you can talk yourse

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On Ecommerce and Marketplaces: Look for 1. Positive unit economics on the product, positive contribution margins on products sold. 2. Logistics: how long does it take to get to you? Will people pay for convenience. 3. Ability to browse as a human and connect, products that delight the customer, 4. Hooks the customer going forward, 5. The future is ... See more