Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?

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Glasp

Sep 14, 20234 min read

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Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?

In today's digital age, businesses are constantly looking for innovative ways to grow and expand their reach. One trend that has emerged is the transition from a Software as a Service (SAAS) model to a marketplace model. But can this transition actually work? In this article, we will explore the potential of this shift and the challenges that come with it.

SAAS, or software that businesses access online and purchase via a subscription, has become increasingly popular in recent years. Companies like Slack, Adobe, and Atlassian have successfully utilized this model to provide their services to businesses. However, as SAAS companies have expanded into niche verticals, they have found that the opportunities for growth through extension platforms have dried up. This has led them to explore the idea of becoming marketplaces.

Marketplaces, on the other hand, are platforms where sellers provide their services to attract additional buyers. Buyers come to these marketplaces to seek out services and find new suppliers. Marketplaces commonly process transactions and charge a commission to either the supplier or the demander. Some marketplaces also charge lead generation fees to suppliers. By transitioning from a SAAS model to a marketplace model, businesses aim to help their customers attract more buyers by aggregating them on their platform and aiding in their discovery.

One of the key requirements for successfully transitioning to a marketplace model is changing the incentive structure for the entire company. Founders often face the challenge of prioritizing the core business over risky propositions that may drive long-term growth. To overcome this, they can either make the entire company's growth revolve around the new initiative or create a separate team with separate goals and reporting lines. This ensures that the transition receives the attention and resources it needs to succeed.

Another challenge in transitioning to a marketplace model is changing the company culture. Strong businesses build a culture of understanding their customers and catering to their needs. However, when a new customer or business model is introduced, employees may struggle to prioritize and trade off the needs of different customers. To address this, founders need to bring in new blood with consumer product development backgrounds and recruit internal resources who are passionate about the opportunity. This helps align the company culture with the new business model.

Before embarking on the transition to a marketplace model, founders also need to confirm that there is a demand side to the market and that the way they engage with this demand aligns with their customers' business models. One common reason for marketplace transitions to fail is the lack of a demand side. Additionally, founders need to ensure that the opportunity aligns with the characteristics of successful marketplaces. Marketplaces are often built on under-utilized fixed assets, and hitting the minimum scope for the demand side is crucial for success.

Now, let's shift our focus to content curation in the digital age. Maria Popova, a renowned curator, believes that in a world of informational abundance, content curation has become a new kind of authorship. Just as curators in the art world select and organize content around a theme, online curators do the same with digital content. However, with the rise of new media and platforms like Twitter, curation has taken on a life of its own.

Twitter, in particular, has become a powerful tool for content discovery. It allows users to direct attention to destinations where it can be sustained with more concentration and immersion. While traditional media fought against the scarcity of information, new media are fighting the overabundance of information. Twitter enables people to discover the most relevant and impactful information in any medium and relate it to other information in a networked ecosystem of meaning.

It's important to note that Twitter is a constantly changing platform defined by its evolving social utility. Users have introduced new features like the photo-sharing service because the communication on this platform demanded them. This constant evolution gives people the power to express themselves and gather like-minded individuals, making Twitter a dynamic and influential platform.

However, the challenge lies in acknowledging content curation and information discovery as a form of creative labor. Our current models for crediting this kind of labor are inadequate, if they exist at all. Finding a way to recognize and codify this labor is the next frontier in how we think about intellectual property in the information age.

In conclusion, the transition from a SAAS business to a marketplace model is a complex endeavor that requires careful planning and execution. Founders need to change the incentive structure, shepherd the right resources, and ensure that there is a demand side to the market. Similarly, content curation has become a new form of authorship in the digital age, but it lacks proper recognition and acknowledgment. As we navigate these transitions and challenges, it is crucial to embrace innovation and adapt to the changing landscape of business and information consumption.

Resource:

  1. "Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?", https://caseyaccidental.com/saas-marketplace/ (Glasp)
  2. "Maria Popova: In a new world of informational abundance, content curation is a new kind of authorship", https://www.niemanlab.org/2011/06/maria-popova-in-a-new-world-of-informational-abundance-content-curation-is-a-new-kind-of-authorship/ (Glasp)

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