A Checklist for Online Disruption

On November 13, 2012, Bill Gurley, a partner at Benchmark Capital, posted a remarkable essay on his blog. In it, he described the, “10 factors to consider when evaluating digital marketplaces.” Given the tremendous value marketplaces create and how hard they are to get right, I found this essay to be a goldmine of insight.

I teamed-up with my friend and blogger Sangeet Paul Choudary, to digest Bill’s post into a more memorable format. The result is this brief checklist we hope will help take some of the luck out of evaluating marketplace businesses.

As Bill wrote, “It is unlikely that you will find a marketplace opportunity that would score ten out of ten with respect to this list.” But according to Bill, the odds of success improve the more of these characteristics the business exhibits.

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  • Are marketplaces the classifieds of yesterdays media? and if they are, is there an opportunity to think of marketplaces (or classifieds of today) as just one revenue stream for today/tomorrow’s media? Might a site that is a content play like remodelista http://www.saymedia.com/remodelista eventually consider incorporating a marketplace to drive engagement and also one more revenue stream?

  • fiveshorts

    …and if our startup TRULY scores 10 out of 10?
    The problem we’re facing, is hanging on to the tiger’s tail.
    After 30yrs of serial entrepreneurship; with each effort leading down one financial cul-de-sac after another; having now found “the big one”, I never realized just how much harder it is to introduce something with potential, than something with none.

    Thank you for your continuing wisdom.

  • Here is another good essay on marketplaces that Fabrice Grinda wrote just two days ago http://www.fabricegrinda.com/business-musings/thoughts-on-building-successful-vertical-marketplaces/

  • Now that the online marketplace model has proven to have tremendous value, what can communities do to leverage the power of community at an affordable cost. That is what we do at Meylah (www.meylah.com), a platform powering community marketplaces so communities can build their own online marketplaces to connect buyers and independent businesses of their communities.

  • Bill Hurley’s post is great. Thanks for making it more memorable. I’d like to add Simon Rothman’s post on How to Structure a Marketplace http://techcrunch.com/2012/08/19/how-to-structure-a-marketplace/ Another great read.