Speedinvest x Marketplace Scorecard
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Speedinvest x Scorecard for Marketplace Startups
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For more detail, follow along with our blogpost here:
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https://medium.com/@philipspecht/why-we-have-created-a-scorecard-317355d1c046Description
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1. Value proposition
These are, in our view, considered to be the “hygiene factors” of any marketplace or network effects-driven business.
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Multiple choice (Select more than one)Quality of supply
Customers expect and receive strong quality of goods/services from your platform.
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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.
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Facilitation of trust
Users need to feel it is safe to transact through the website
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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
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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.
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Postively validated references (customer & suppliers), indicating product/market fit
Those who use and interact with your service speak highly of it.
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TOTAL0.0
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2. Defensibility
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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.
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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.
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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.
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Community aspect
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.
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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.
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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.
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TOTAL0.0
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3. Network Effects
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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.
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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.
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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.
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Data network effects
The more data collected, the more valuable the offer of the platform (e.g. due to better curation and matchmaking ).
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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.
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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.
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Buyer equals seller ratio of over 5%
The beauty of P2P marketplaces is that buyers often become sellers and vice versa.
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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.
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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.
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TOTAL0.0
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4. Market
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Adressable market size (Select one)> € 50B
Select the addressable market size, OR indicate if you are creating a new market/unlocking a shadow market.
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€ 25-50B
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€ 10-25B
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€ 2-10B
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€ 1-2B
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Alternatively Creating a new market/unlocking a shadow market
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0.0
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Market growth (Select one)Market is growing fast (>5%)
YoY growth rates indicate how big the opportunity could become.
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Market is growing slowly or stagnating (0-5%)
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Market is shrinking
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0.0
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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?
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TOTAL0.0
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5. Competition
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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.
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Competitors exist in relevant market with similar business model and similar funding
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Competitors exist in relevant market with similar business model and better funding
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TOTAL0.0
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6. Monetization
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.
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Revenue margin (Select one)> 25%
How much of your gross revenue (or GMV) translates to net revenue
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15-25%
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0-15%
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Medium to high purchasing frequency (Yes/No)
Marketplace could be relevant for the customer at least once per month
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Monetization channel (Yes/No)Other monetization channels implemented/planned
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Own payment flow (Yes/No)"Owning" the transaction: Start-up controls the flow of money
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TOTAL0.0
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7. Traction
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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.
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Growth YoY (GMV or active users) >5x
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3-5x
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2,5-3x
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2-2,5x
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<2x or pre-launch
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0.0
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CMGR last 4 months (GMV or active users)
>14%
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10-14%
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8-10%
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6-8%
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<6% or pre-launch
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0.0
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TOTAL0.0
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8. Engagement
Often, in the early stages of a marketplace user engagement is an even better indicator of success than financial traction.
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Share of wallet (Select one)> 80%
What percentage of the customers transactions value in this specific use case is funneled through your platform?
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50-80%
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20-50%
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<20%
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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?
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