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 are known to create and how hard they are to get right, we found this essay to be a goldmine of insight. We wanted 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. Read Bill Gurley’s original post here: http://goo.gl/xoAUw - Nir (nirandfar.com) and Sangeet (platformed.info)

1. MAKING A MARKETPLACE
A CHECKLIST FOR ONLINE DISRUPTION
inspired by @bgurley
by @nireyal and @sanguit

2. 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 are known to create and how hard
they are to get right, we found this essay to be a goldmine of insight. We wanted 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 !nd 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.
- Nir and Sangeet
Read Bill Gurley’s original post here: http://goo.gl/xoAUw

3. 1. Does your marketplace
make a behavior dramatically
easier and more e"cient?

4. Alibaba
Made transactions between US importers and
Chinese manufacturers dramatically easier than the
previous methods of !nding suppliers.

5. 2. Does your marketplace
produce more value than
current markets?

6. AirBnB
Allows anyone to run their own hotel. Room
owners pro!t from renting out unused rooms
while guests bene!ts from lower prices.

7. 3. Does your marketplace
utilize a new technology to
create e"ciencies?

8. OpenTable
Leveraged adoption of high-speed internet access
by both restaurants and consumers to create a web-
based reservation platform.

9. 4. Does your marketplace
consolidate a fragmented
market?

10. Kickstarter
Connects entrepreneurs with !nancial backers who
want to see projects succeed. Both sides of the market
are fragmented with no dominant players.

11. 5. Does your marketplace
make it easy for suppliers to
sign-up?

12. Etsy
Makes it very simple to sell handcrafted goods
in minutes.

13. 6. Does your marketplace
serve a large market?

14. eBay
Serves a very large market of online buyers and
sellers for just about anything.

15. 7. Can your marketplace
bring in unserved customers and
expand the market?

16. oDesk
Expanded the market for software outsourcing by
making it simple enough for anyone to use.
Photo Credit: racheocity

17. 8. Does your marketplace
serve a frequent need?

18. GrubHub
Serves a frequent need for many o"ce workers,
ordering daily food delivery.

19. 9. Does your marketplace
control the transaction?

20. Uber
Is at the center of the payment #ow when it
coordinates a ride between a driver and rider.

21. 10. Does your marketplace
leverage a network e#ect?

22. YouTube
Is more valuable with each new video published to
the site. The more videos posted, the more
important the site becomes to viewers.

23. Good luck
We wish you success making your marketplace.
// @nireyal blogging at: nirandfar.com
// @sanguit blogging at: platformed.info
Read Bill Gurley’s original post here: http://goo.gl/xoAUw