|Speedinvest x Scorecard for Marketplace Startups|
|For more detail, follow along with our blogpost here:|
|1. Value proposition|
These are, in our view, considered to be the “hygiene factors” of any marketplace or network effects-driven business.
|Multiple choice (Select more than one)||Quality of supply|
Customers expect and receive strong quality of goods/services from your platform.
|Intuitive user journey|
Customers can easily find what they're looking for. From first learning about your service, to finally transacting (then hopefully returning) the user experience is clear and simple.
|Facilitation of trust|
Users need to feel it is safe to transact through the website
|New or much better user experience vs. status quo|
“Great marketplaces do not simply aggregate a market; they enhance it. They leverage the connective tissue to offer the consumer a user experience that simply was not possible before the arrival of this new intermediary." -- Bill Gurley
|Economic advantage vs. status quo|
The service becomes appropriately cheaper for the customer (demand side) and/or the sellers (supply side) can earn more money.
|Postively validated references (customer & suppliers), indicating product/market fit|
Those who use and interact with your service speak highly of it.
|Multiple choice (Select more than one)||First mover advantage|
This can significantly help with market share capture, and simultaneously build brand recognition and customer loyalty before competitors enter the arena.
|Opportunity for tech to create value|
An online marketplace becomes a stickier service offering if it does more than only matching supply and demand. Ideally, it has some tech features ingrained in its value proposition that a user would be willing to pay for even without conducting a transaction in the marketplace.
|Opportunity to gather data with unique commercial value|
Data is proven to be uniquely valuable when certain customers/partners are willing to pay for access to it.
A great way to get users engaged and grow a loyal user base is to turn a platform into something more than a marketplace. Communities can drastically increase the value of a service to all users.
|Customer or supplier lock-in|
If customers or suppliers can be locked into the service by contracts, value-adding services, technical barriers or other means, that creates a deep moat around the business.
|Very high customer satisfaction: NPS above 50 or trust pilot rating > 9|
We believe NPS is one of the best and simplest tools to measure customer satisfaction.
|3. Network Effects|
|Multiple choice (Select more than one)||Direct network effects|
Each new member in the network increases the value of the network for all other members of the network.
|Two-sided network effects|
Marketplaces and platform businesses have 2-sided network effects. Every new supplier on a marketplace adds value to the customers and vice versa.
|N-Sided network effects|
Collaboration in n-sided markets often happens around a project, e.g. a construction site (e.g. via Building Connected) or an event (e.g. via Honeybook), connecting many parties who have previously communicated and transacted offline.
|Data network effects|
The more data collected, the more valuable the offer of the platform (e.g. due to better curation and matchmaking ).
|Transregional network effects|
All things equal, we prefer transregional network effects over local network effects. Every new flat of AirBnB is a benefit to all users of the platform, whilst every newly listed item on a peer-to-peer lending platform for neighbors is only a benefit for people living in close proximity.
|Indirect network effects and/or community|
Indirect network effects can be observed when users of a platform or other companies start building products or services around the platform.
|Buyer equals seller ratio of over 5%|
The beauty of P2P marketplaces is that buyers often become sellers and vice versa.
|Active users from organic traffic outgrowing paid traffic|
When this ratio is stable and organic traffic outgrows paid traffic, it can be assumed that word of mouth is effective, positive news is being spread about the business.
|Virality co-efficient of at least 0,25|
Users invite others because they are incentivized by a referral bonus, or simply because they would benefit from the presence of the referred customer on the platform.
|Adressable market size (Select one)||> € 50B|
Select the addressable market size, OR indicate if you are creating a new market/unlocking a shadow market.
|Alternatively||Creating a new market/unlocking a shadow market|
|Market growth (Select one)||Market is growing fast (>5%)|
YoY growth rates indicate how big the opportunity could become.
|Market is growing slowly or stagnating (0-5%)|
|Market is shrinking|
|High level of fragmentation (Yes/No)||Always more than 10 possible transaction partners for both supplier and customer|
Always more than 10 possible transaction partners for both supplier and customer?
|Competitive Landscape (Select one)||No competitors exist in relevant market with similar business model yet|
Understanding other players in the market is crucial. Competitor approach, funding, and overall progress can inform your own business strategy.
|Competitors exist in relevant market with similar business model and similar funding|
|Competitors exist in relevant market with similar business model and better funding|
Marketplaces can vary significantly in their approach to revenue. "Commission models" are quite common, but other monetization strategies can be found in successful marketplace businesses.
|Revenue margin (Select one)||> 25%|
How much of your gross revenue (or GMV) translates to net revenue
Medium to high purchasing frequency (Yes/No)
|Marketplace could be relevant for the customer at least once per month|
|Monetization channel (Yes/No)||Other monetization channels implemented/planned|
|Own payment flow (Yes/No)||"Owning" the transaction: Start-up controls the flow of money|
One choice overall (EITHER growth YoY or CMGR)
Your company's financial progress gives us a sense if your product is being well-received in the market.
|Growth YoY (GMV or active users)||>5x|
|<2x or pre-launch|
CMGR last 4 months (GMV or active users)
|<6% or pre-launch|
Often, in the early stages of a marketplace user engagement is an even better indicator of success than financial traction.
|Share of wallet (Select one)||> 80%|
What percentage of the customers transactions value in this specific use case is funneled through your platform?
|Emergence of power users (Yes/No)|
Existence of users who spent more money or time on the platform than they did before for this specific use case?