LinkedIn is the New Craigslist: Better Aligning Value Creation & Value Capture

LinkedIn is the New Craigslist: Better Aligning Value Creation & Value Capture

In today's digital age, the unbundling of platforms like Craigslist and LinkedIn is becoming increasingly evident. Just as Craigslist was once the go-to platform for various needs, LinkedIn has now positioned itself as the professional networking platform. However, there are still gaps in LinkedIn's coverage, particularly when it comes to blue-collar workers. This gap in the market presents an opportunity for startups to create hyper-vertical marketplaces that cater specifically to these workers.

One key factor to consider when building a successful marketplace is frequent repeat usage on the supply side. Workers in the fractionalized labor marketplaces often rely on these platforms to find their next money-earning opportunity. By identifying a vertical with high repeat usage, startups can tap into a market that has the potential for rapid growth.

Another challenge that marketplaces face is disintermediation, which occurs when there is a high degree of trust between the demand side and the supply side. To defend against disintermediation, startups should focus on a vertical with homogeneous supply. This means that the marketplace should provide a value proposition that is strong enough to keep both the demand and supply sides engaged.

One successful example of a marketplace that has overcome disintermediation is Uber. Riders trust the marketplace itself, rather than individual drivers. This trust allows for a seamless experience, even with different drivers each time. By providing value-add tools or services for one or both sides, startups can create a similar level of trust and loyalty.

Additionally, many vertical labor marketplaces have a data moat that creates defensibility for the platform. This data moat often comes in the form of reviews or feedback about the workers on the supply side. As workers receive more feedback, they are more likely to secure future jobs, creating stickiness for the platform.

While labor marketplaces are focusing on better aligning value creation and value capture, other industries can also benefit from this shift. The music industry, for example, has been undermonetizing compared to the video game industry. By leveraging cryptocurrency, musicians and other creators can directly capture the value they create.

Crypto networks enable new ways for creators to monetize their work. They can sell their creations to their audience and charge them in a granular way, leading to more financial incentives and increased fan engagement. This direct value capture allows creators to take ownership of the value they generate, which has the potential to revolutionize the industry.

Furthermore, crypto networks have the potential to transform the traditional corporate structure. Co-ops have always faced barriers in accessing capital markets, limiting their growth potential. However, crypto networks make it easier for startups to raise money and get customers by making them investors. This aligns the financial incentives for all stakeholders and opens up new possibilities for community ownership and network alignment.

In the ownership economy, capitalism becomes more palatable to a wider audience. Startups that are built, operated, and owned by their users have the potential to grow much faster than their institutionally owned counterparts. This shift towards community ownership and network alignment is a step forward in making capitalism a positive-sum game.

In conclusion, the unbundling of platforms like Craigslist and LinkedIn presents opportunities for startups to create hyper-vertical marketplaces that cater to specific needs. By focusing on verticals with frequent repeat usage and providing value-add tools or services, startups can overcome challenges like disintermediation. Additionally, leveraging cryptocurrency and embracing the ownership economy can revolutionize various industries, allowing creators to directly capture the value they generate. To succeed in these endeavors, startups should consider incorporating actionable advice such as identifying verticals with homogeneous supply, building strong value propositions, and leveraging data moats for defensibility.