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Building Marketplaces is Hard, Mark Britton Shares His Tips for How to Succeed

October 1, 2019

Seattle is known for marketplaces, Expedia, Amazon, Zillow, Redfin, Rover.

“Building them is REALLY hard.”

If you are looking to build a marketplace based company – you inherently have two sides and two potential customer groups for whom to optimize.  In the latest episode of Madrona’s podcast, Founded and Funded, Mark Britton, the founder of AVVO, talks about how he approached this at AVVO; the opportunities founders have to create meaningful marketplaces and the common mistakes they make.

One of these mistakes comes from misjudging who your most important customer is.

“The touchstone is the consumer – you have to really understand the consumer and solve their problem in a very unique way.”

Since a marketplace is a flywheel, you need to get it going and that is not easy.  Mark suggests get started by limiting your geography or the product in a way that makes it possible to generate the supply side in a meaningful way for your very first customers.  For AVVO that meant a practice area of law and a geographic region.

With most marketplace businesses, the big tech companies will start to encroach.  One example is the Trips service from Google released earlier this year that offers a search for vacation packages, flights and more, all of which have been traditional fare for travel marketplaces for years.

“Every single e-commerce model that is informationally driven; Google believes they should own that.”

Mark suggests that entrepreneurs who are thinking about a building a marketplace, focus on the community they have a passion for.  Google is trying to capture everything about the world, you know a community or a specific market, so leverage that focus and lean into it.

Build out the tools to increase interactivity on the platform and keep your eyes open for when the competition from big tech companies heats up.  Your focus has the opportunity to prevail against big tech.

The addition of AI and ML related technologies is another challenge for startup marketplaces – the big companies have teams, compute and the technology to help make the connections and matches in a marketplace.  Even if they do so incrementally, they will be doing it at scale.

This all comes back to your unique love of the community and ability to understand and build it in a way that is not possible from a Google or an Amazon.

“Building community is such an art – Google will not be your tight community.”



Mark is a Strategic Director at Madrona Venture Group and Elisa La Cava is a Senior Associate.  You can contact them by emailing or connecting through LinkedIn.



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