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Marketplaces: Uber, AirBnB, Snappr, Fiverr, Upwork and niching

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A topic related to SAAS or APPs

martinz1995

New Contributor
Jan 12, 2022
5
5
Hi so I had a question about the marketplace business model that you see nowadays - essentially while there are still small businesses and even big corporations, many professions have been turned into freelancers.

Essentially a service business is a marketplace - for example if I run a digital marketing agency I would simply match clients with employees. As in I would match SEO experts, PPC experts, designers etc. with clients e.g. enterprise, small businesses, medium sized businesses.

Good case is a small business I currently run- it is a wedding videography business. I simply match a videographer that I've hired with couples through marketing. I don't do any videography or video editing at all. And I was thinking I am simply running a marketplace. So in this sense, this business is a marketplace where I connect/match wedding videographers with couples.

However Fiverr/Upwork is just a larger version of this marketplace, with more scale. E.g. Upwork has designers, accounting, data analysts, SEO experts, web developers, video editing etc. and it is GLOBAL unlike a small business that I run. The only way for me to achieve that sort of scale would be if I turn it into a franchise or if I turn it into an app/ online marketplace.

So now I am thinking couldn't this these larger marketplaces be niched down and improved in quality? Here's what I noticed:
Dribble is an example of a marketplace (similar to Fiverr/Upwork) that is only focused on design.
Hire Digital (similar to Fiverr/Upwork) is an example of a marketplace focused on digital marketing.
Toptal is an example of a marketplace (similar to Fiverr/Upwork) focused on high quality freelancers (finance, development, design, product management and project management)

So couldn't all the broad categories of Fiverr be niched down to just 1 area/service? E.g. Fiverr for video editors / Fiverr for translators / Fiverr for accountants/ makeup artists. Because it seems like that's how things are moving nowadays.
 
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SEBASTlAN

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Hi so I had a question about the marketplace business model that you see nowadays - essentially while there are still small businesses and even big corporations, many professions have been turned into freelancers.

Essentially a service business is a marketplace - for example if I run a digital marketing agency I would simply match clients with employees. As in I would match SEO experts, PPC experts, designers etc. with clients e.g. enterprise, small businesses, medium sized businesses.

Good case is a small business I currently run- it is a wedding videography business. I simply match a videographer that I've hired with couples through marketing. I don't do any videography or video editing at all. And I was thinking I am simply running a marketplace. So in this sense, this business is a marketplace where I connect/match wedding videographers with couples.

However Fiverr/Upwork is just a larger version of this marketplace, with more scale. E.g. Upwork has designers, accounting, data analysts, SEO experts, web developers, video editing etc. and it is GLOBAL unlike a small business that I run. The only way for me to achieve that sort of scale would be if I turn it into a franchise or if I turn it into an app/ online marketplace.

So now I am thinking couldn't this these larger marketplaces be niched down and improved in quality? Here's what I noticed:
Dribble is an example of a marketplace (similar to Fiverr/Upwork) that is only focused on design.
Hire Digital (similar to Fiverr/Upwork) is an example of a marketplace focused on digital marketing.
Toptal is an example of a marketplace (similar to Fiverr/Upwork) focused on high quality freelancers (finance, development, design, product management and project management)

So couldn't all the broad categories of Fiverr be niched down to just 1 area/service? E.g. Fiverr for video editors / Fiverr for translators / Fiverr for accountants/ makeup artists. Because it seems like that's how things are moving nowadays.

There's many Fiverr alternatives, but I wouldn't launch a niche one unless there's some real proof of social demand - not to mention the two sided marketplace is one of the hardest models to crack.
 

MJ DeMarco

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So couldn't all the broad categories of Fiverr be niched down to just 1 area/service?

Absolutely, and photography can be one. Just know that any such marketplace is a rough nut to crack, two-sided marketplaces are doggedly hard to start, but as such, have great barriers to entry.
 

Eudaimonium

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Jun 8, 2017
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I highly recommend to you the book: "The Lean Marketplace"

I don't think you should study Fiverr, Uber, Upwork etc. for their marketplace business model as they are not niched enough.

Marketplaces for digital products / services have by far the highest margins. Steam, iTunes, Shutterstock etc.

They can collect fees amounting to 30-70% of transactions, which is hard to accomplish in the physical realm where services/items are not easily replicable.
 
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Johnny boy

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I hate MOST marketplace business models. Someone's gotta do the hard work. Everyone thinks their "uber of lawn care" is a great idea but they are just running away from the difficulty (the difficulty brings in all the profit).

Imagine a restaurant where you go in, sit down, order food, and the chefs in the kitchen are just guys off the street who are independent contractors. The restaurant doesn't train them or give them instructions, just the type of food that was ordered. Is that what you want to build?

Build the hard thing and you will be rewarded. We enjoy a 50% profit margin and will still be around in 10 years. We may not give VC funds and angel investors a boner with our business model because it's not a SAAS, but we have something that all of these "uber of _____" companies don't have and that's PROFIT.
 

Andy Black

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Imagine a restaurant where you go in, sit down, order food, and the chefs in the kitchen are just guys off the street who are independent contractors. The restaurant doesn't train them or give them instructions, just the type of food that was ordered. Is that what you want to build?
Agreed, that restaurant doesn't sound appealing.

Is that a marketplace though? Would the marketplace be the directory where you found the listing for the restaurant?
 

martinz1995

New Contributor
Jan 12, 2022
5
5
I hate MOST marketplace business models. Someone's gotta do the hard work. Everyone thinks their "uber of lawn care" is a great idea but they are just running away from the difficulty (the difficulty brings in all the profit).

Imagine a restaurant where you go in, sit down, order food, and the chefs in the kitchen are just guys off the street who are independent contractors. The restaurant doesn't train them or give them instructions, just the type of food that was ordered. Is that what you want to build?

Build the hard thing and you will be rewarded. We enjoy a 50% profit margin and will still be around in 10 years. We may not give VC funds and angel investors a boner with our business model because it's not a SAAS, but we have something that all of these "uber of _____" companies don't have and that's PROFIT.
Absolutely I agree with this point. And that seems to be the problem I've noticed with Fiverr - it is like the lower quality version of Upwork. Essentially I look at the marketplace as a product. Craigslist is a marketplace but it is so poor in quality that barely anyone uses it anymore.

So the goal is the create a marketplace that will attract both exceptional talent as well as great clients.
 
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