Buyers or Sellers: Who Do You Need to Attract First in a Marketplace?

Marketplaces are notoriously hard to get started because they face the notorious chicken and egg problem. Do you need to attract the buyers or the sellers first in order to be successful? But once they get started and have some critical mass, they can be a goldmine by making a small amount on memberships or on each transaction with little effort.

buyers or the sellers: who do you need to attract first

On The Small Business Radio Show this week, Shirish Nadkarni who is a serial entrepreneur with proven success in creating multiple consumer businesses that have scaled to tens of millions of users worldwide. Shirish was the cofounder of Livemocha, the world’s largest language learning site with 15+ million registered members from over 200 countries. Livemocha was acquired by RosettaStone in 2013.

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Shirish started his career at Microsoft where he engineered the acquisition of Hotmail and launched, which became a leading web portal in the early days of the Internet. He has a new book called, “Winner Takes All: Case Studies in How Online Marketplaces Are Creating Modern Monopolies”.

Here is what I asked Shirish:

  • The best way to jumpstart a marketplace and get past the “chicken or the egg” problem.
  • How to build trust between demand and supply in a marketplace.
  • How companies like Amazon, Apple, and Google have abused their monopoly power.
  • Why are marketplaces destined to become monopolies?
  • Ways that the market can be regulated to level the playing field and prevent future monopolies from dominating the space.
  • Understanding marketplace mechanics from multi-tenanting to differentiated supply
  • Why the economics of marketplaces are quite different than traditional pricing theory and what you should know.
  • The different ways marketplaces can drive revenues from transaction fees to membership fees— and how to determine which is best for you.
  • Case studies of successful marketplaces that leverage a technology platform shift

Listen to the entire interview on The Small Business Radio Show.

Image: Shirishnadkarni

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Small Business Radio Show As a small business expert, Barry Moltz gets owners growing again by unlocking their long forgotten potential. With decades of entrepreneurial experience in his own business ventures as well as consulting countless other entrepreneurs, Barry has discovered the formula to get stuck business owners unstuck and marching forward. As a small business expert, Barry applies simple, strategic steps to facilitate change.

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