Winning Strategies for Service Marketplaces

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.

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.

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.