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How to win as an early marketplace

๐ŸŒˆ Abstract

The article discusses strategies for early-stage marketplaces to capture and retain customer demand, using the author's experience working with Sesame, a healthcare marketplace, as an example. It introduces the "Market Capture Framework" which outlines five key areas where marketplaces can differentiate themselves: Price Advantage, Exclusive Supply, Discoverability Advantage, Trust Advantage, and Fulfillment Advantage. The article also examines the challenges Tripadvisor faced in transitioning to a more transactional marketplace model, and how its attraction booking business has found more success by leveraging these five dimensions.

๐Ÿ™‹ Q&A

[01] The Market Capture Framework

1. What are the five key areas where marketplaces can differentiate themselves according to the Market Capture Framework?

  • Price Advantage - Offering the most competitive prices in the market
  • Exclusive Supply - Providing unique inventory that can't be found on other platforms
  • Discoverability Advantage - Making it easy for customers to find what they need and difficult to comparison shop elsewhere
  • Trust Advantage - Establishing the marketplace as the safest, most reliable option for transactions
  • Fulfillment Advantage - Delivering a superior end-to-end purchase and delivery experience

2. How does Sesame, the healthcare marketplace the author is working with, perform across these five dimensions?

  • Price Advantage (High) - Sesame offers doctor visits starting at $29, up to 50% lower than competitors
  • Exclusive Supply (Medium) - Sesame's doctors are carefully curated for quality and customer-centricity, but not entirely exclusive
  • Discoverability Advantage (High) - Patients can easily find available doctors by specialty, price, time and location
  • Trust Advantage (Medium) - As a newer brand, Sesame is building trust through focus on customer satisfaction and streamlined experiences
  • Fulfillment Advantage (Very High) - Sesame handles the entire process from booking to prescriptions, bypassing the typical hassles of dealing with insurance

[02] Tripadvisor's Transition to a Transactional Marketplace

1. What was the "leaky bucket" problem Tripadvisor faced when it was primarily monetizing through "check prices" ads? Tripadvisor was facilitating demand but not capturing the value from that demand, as travelers would quickly flow from Google to Tripadvisor to a booking site where they would price shop and eventually complete their booking.

2. How did Tripadvisor perform across the five dimensions of the Market Capture Framework when it launched Instant Book for hotels?

  • Best Price (Low) - Tripadvisor could only achieve price parity in most cases, not offering the best prices.
  • Exclusive Supply (Very low) - Hotel supply was primarily the same across online travel marketplaces.
  • Discoverability Advantage (Medium) - Tripadvisor could help people discover relevant hotels, but the supply could be easily cross-shopped on other platforms.
  • Trust Advantage (Medium) - Tripadvisor is a trusted brand, but other platforms like Booking.com and Expedia had a stronger trust advantage for hotel booking.
  • Fulfillment Advantage (Low) - Tripadvisor had limited ability to differentiate the purchase or stay experience compared to booking directly with hotel brands.

3. How has Tripadvisor's attraction booking business, powered by the Viator acquisition, performed better across the Market Capture Framework?

  • Best Price (Medium) - Tripadvisor can offer good prices on a wide selection of attractions, often much cheaper than booking in-market.
  • Exclusive Supply (Medium-High) - Many attraction suppliers focus their efforts on Tripadvisor/Viator due to the demand it drives.
  • Discoverability Advantage (High) - Tripadvisor makes it easier for travelers to find the best attraction options based on reviews.
  • Trust Advantage (High) - Tripadvisor benefits from the social proof of having millions of reviews for attractions.
  • Fulfillment Advantage (Medium) - Tripadvisor can streamline the fulfillment process through features like ticketing, skip the line passes, and in-app information.
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ยฉ 2024 NewMotor Inc.