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a16zThe Marketplace 100: A Glimpse Into the Future of Commerce
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At a glance
WHAT IT’S REALLY ABOUT
a16z Partners Unpack Marketplace 100 Trends: Curation, Video, Trust, and AI
- Connie Chan explains that a16z loves marketplaces for their defensibility and network effects, and the 2023 list ranks private marketplaces by 2022 GMV using anonymized credit card data from Consumer Edge across more than 12,000 companies.
- Shopping is shifting from search-based transactions toward discovery and entertainment, with Whatnot's video-driven model and Temu's personalization and gamification cited as examples.
- Curation and trust and safety are central, enabling new supply to join, as seen in curated marketplaces, Temu's warehouse oversight, mental health marketplaces helping therapists accept insurance, and sneaker marketplaces protecting sellers.
- The partners discuss disintermediation, arguing marketplaces keep users by providing value to both sides, such as Wyzant's coordination and payments or Peek's vertical software for suppliers.
- Looking ahead, they see video as a lasting trend, ticketing growth as likely transient, social platforms moving into commerce, and AI plus marketplace infrastructure tools lowering the barrier to building marketplaces.
IDEAS WORTH REMEMBERING
5 ideasMarketplaces are prized for defensibility and network effects
Connie Chan says the larger a marketplace gets, the harder it is to disrupt, which is why Craigslist persists despite a bare-bones interface and why many of venture's biggest returns have been marketplaces.
GMV is a lagging indicator of marketplace health
Olivia Moore says that when evaluating investments the team looks at growth in active supply and demand, listing-to-sale conversion, and user and revenue retention rather than GMV alone.
Search-based and discovery-based marketplaces need different experiences
For specific-item purchases like car parts, inventory volume matters most, while browsing-driven marketplaces must invest in UX, personalization, and entertainment, as Whatnot and Temu do.
Curation and added trust layers unlock new supply
Olivia Moore notes that high-end brands and food merchants that avoid Amazon or DoorDash will list on curated marketplaces like Sense and Locale, which also gives buyers more conviction in what they get.
Marketplaces can create supply that didn't exist online before
Mental health marketplaces help therapists get credentialed to accept insurance, bringing appointments down to $10–$30 versus $100–$200 for uncovered care, much as Airbnb created new hosts.
WORDS WORTH SAVING
5 quotesA marketplace, the larger it gets, the harder it is to disrupt.
— Connie Chan
Disintermediation, I feel like, is the elephant in the room when it comes to a lot of marketplaces, and probably the easiest and, like, most obvious question to answer when- or to ask when you're talking to someone building a marketplace.
— Olivia Moore
I think that kind of static e-commerce transaction experience is getting a little boring, and consumers want more shopping entertainment.
— Zach Cohen
even if it doesn't seem like there's room to create a new marketplace, there's always something about the experience on existing platforms that one side is probably secretly unhappy with and is willing to change to something new if you're kind of able to nail it and finally get it really right for them.
— Olivia Moore
It all comes down to conviction that whatever I bought is something I actually want. That's what all shopping boils down to, right?
— Connie Chan
High quality AI-generated summary created from speaker-labeled transcript.
