Growth Frameworks For Your Marketplace: Move Over Influencers, Here Come Curators

Growth Frameworks For Your Marketplace: Move Over Influencers, Here Come Curators

In the world of marketplaces, understanding the dynamics of supply and demand is crucial for success. Identifying whether your marketplace is supply or demand constrained will help you develop the right growth framework. Let's explore the different aspects of each constraint and how they can be leveraged for growth.

Supply Constrained Examples: Uber, Airbnb, StockX, DoorDash, OpenTable, and Hipcamp. These marketplaces are characterized by a scarcity of suppliers or inventory. Success in these marketplaces often hinges on unlocking new supply within the market through innovative strategies. Once the supply is available, the focus shifts to turning infrequent suppliers into "power sellers" or "power users." Becoming the primary channel and source of income for suppliers is key.

On the other hand, Demand Constrained Examples: Amazon, Zillow, Expedia, and Booking.com. These marketplaces face challenges in meeting the demand for their products or services. The scarce and expensive resource is the demand itself. Efficient and scalable demand-side acquisition strategies are essential in these marketplaces to maintain favorable unit economics. Unlocking new marketing channels can be a game-changer for demand-constrained marketplaces.

Marketplaces can also be categorized based on their network effects: local, regional, or global. Local marketplaces thrive on the value created by more users within a specific neighborhood or city joining the network. These marketplaces are hard to get going but can be highly defensible. Expanding into new geographies too early can leave local marketplaces vulnerable, but expanding to similar markets at the right time is crucial for sufficient market coverage.

On the other hand, global marketplaces with strong network effects require blitzscaling. The prize is bigger, but defending the turf becomes more challenging. Even purely digital, global marketplaces need to localize their products to cater to different regions and cultures. Airbnb, eBay, Etsy, and Google are examples of global marketplaces with strong network effects.

But the world of marketplaces is evolving, and a new trend is emerging - the rise of curators. Aspiration is no longer solely about having money to buy things; it's about having the taste to know what to buy. Curators are individuals who have developed expertise in specific cultural niches, such as menswear, streetwear, luxury fashion, design, food, or travel. Their role is to share their taste and turn their social and cultural capital into economic capital.

What sets curators apart is their dedication to quality over quantity. They don't chase after sheer reach and volume of followers; instead, they focus on building a loyal and engaged audience within their niche. Many curators choose to remain anonymous, as it boosts their credibility and adds an air of exclusivity to their recommendations.

For brands or individuals looking to become curators, there are four starting points to consider. First, define your business objective - what are you trying to accomplish through curation? Second, define the point of view and the story you want to tell - what sets you apart from others in your niche? Third, determine how you will convey this story - what platforms and strategies will you use to reach your audience? Lastly, create an execution plan to bring your curation vision to life.

When curating products or services, values play a significant role. Filtering brands within a category based on their values, such as gender equality, sustainability, or diversity, helps curators make decisions between similar products. Curators can also organize items based on their knowledge and expertise, the cultural moment or atmosphere they want to create, the story behind the products, their hobbies and interests, location, trends and hype, personality or celebrity endorsements, price, and heritage, ritual, and tradition.

In conclusion, understanding whether your marketplace is supply or demand constrained and recognizing the network effects at play will help you develop a growth framework tailored to your specific circumstances. Additionally, the emergence of curators presents a unique opportunity for brands and individuals to establish themselves as tastemakers and thought leaders within their niche. By focusing on quality, values, and storytelling, curators can build a loyal and engaged audience that values their recommendations.

Three actionable advice for marketplace growth:

1. Identify your marketplace's constraint - Whether it's supply or demand, understanding where your marketplace is constrained will help you prioritize your growth strategies.

2. Leverage network effects - Determine whether your marketplace has local, regional, or global network effects and tailor your expansion plans accordingly. Local marketplaces should focus on market leadership in their dominant market before expanding, while global marketplaces need to consider localization to cater to different regions.

3. Embrace curation - If you're looking to establish yourself as a curator, define your objectives, point of view, and storytelling strategy. Focus on quality, values, and building an engaged audience within your niche.

By combining these key insights and taking actionable steps, you can create a growth framework that maximizes the potential of your marketplace and positions you for long-term success.