Andrew Chen recently delivered a keynote at StartCon in Australia called: What’s Next in Growth? You can find his entire talk, here, on his blog.
One of the themes of his talk is that, “technology changes, but people stay the same.” I like that. See above.
But more specifically, his presentation focuses on 3 techniques for growing businesses and products: customer referrals, viral content, and bootstrapping marketplaces. All of it is interesting, but I’m particularly fascinated by the last one.
Marketplaces are all around us. Uber is a marketplace that pairs drivers and riders. Bars are a marketplace that try to pair people together. Finding, trading, and transacting (whatever that might mean for the marketplace in question) seems so fundamental to humans. And cities really empower that.
The challenge with marketplaces is that they’re hard to start. There’s always a chicken-and-egg problem and so one side of the marketplace usually needs to be “hacked” at the beginning.
Uber is a perfect example of this. At the outset, it didn’t have enough liquidity in its marketplace to compete with incumbent taxis. That is, it took longer to get an Uber than to get a taxi.
So instead, the value proposition was not about speed (or cheapness); it was about luxury. Uber was “everyone’s private driver.” That made waiting acceptable. You were getting a different level of service. The first Uber I ever called in Toronto took 20 minutes to get to my place in midtown.
But obviously as liquidity increased, Uber was able to move downmarket and capture more (most) of the taxi market. Marketplaces are powerful once they get going. Network effects.
I say all of this because, as many of you know, I have spent a lot of time wondering about the future of real estate marketplaces.
At the same time, I also think that many of these seemingly tech-focused lessons could be applied to cities. Starting an online marketplace is difficult. So is building a new neighborhood from scratch. In the end, it’s always about people.