Summary of Marketplaces – Jeff Jordan a16z//

Marketplaces – Jeff Jordan a16z

What makes marketplace business models so attractive, especially as compared to classic ecommerce and retail? (Hint: network effects.),

From the classic unbundling of Craigslist to entirely new marketplaces enabled by smartphones and mobile, a16z general partner Jeff Jordan — a veteran of numerous marketplace businesses and currently on the boards of many such a16z companies — shares examples, drivers of profitability/margins/moats, and what makes marketplaces superior for consumers as well: identity, reputation, payments, trust and safety, frictionlessness, and transparency.

The main dynamic Jeff starts out talking about is that more users drive more buyers in marketplace businesses. He continues to breakdown how companies like Amazon, Airbnb, Craigslist and others are leveraging their marketplaces.

Marketplaces also have some advantages for end-users such as identity, reputation, payments, trust & safety, friction reduction, and transparency. These factors allow marketplaces to earn their margins by providing a superior service to their end-users.