Promiscuous Supply & Marketplace Network Effects
At scale, online marketplaces are fantastic businesses. However, a crop of startups is aiming to chip away at marketplace networks effect by making multi-tenanting easier for suppliers.
Keeping It 100
Since 2020, Andreessen Horowitz (a16z), a venture capital firm, has released the Marketplace 100, a list of the top 100 private online marketplaces. The report ranks startups based marketplace activity, a combination of app activity, website traffic, and GMV.
Like music streams or box office receipts, marketplace activity follows a power law, with the top companies representing a disproportionate share of overall activity (the 80/20 rule). For the second consecutive year, grocery delivery service Instacart topped the charts. Instacart accounted for 64% of marketplace activity in 2022, down from 72% in 2021. The most interesting tidbit from this year’s report is that as multi-tenanting gets easier for buyers and sellers, the winner-take-all dynamic of online marketplaces is getting weaker.
Multi-Tenanting 101
Multi-tenanting is using multiple platforms to list or search 2. It’s common on social networks like Facebook, Twitter, and Tiktok as well as on marketplaces like eBay, Etsy, and Poshmark. Multi-tenanting can happen on either side of a…
