Consumer Demand 4

This is Part 4 of the Consumer Demand Series.Introduction‍Part 1: Merchant Front Office Apps - Setting the Foundation‍Part 2: Creating Demand with Merchant Facing Apps‍Part 3: Consumer AppsPart 4: The Big Leap to Two-Sided Marketplace

And now we arrive at the Great White Whale—the two-sided marketplace. Extending to a consumer two-sided marketplace is the financial promised land, given the economics (anywhere from 5% to 70% take rates) and the strategic flywheels created.

Marketplaces are an opportunity when utilized and a threat when ignored. The most forward-looking marketplaces are beginning to evaluate vertical integrations into SaaS to build moats, secure their supplier base, and provide a better consumer experience. By nature of their high monetization and strategic value proposition—delivering customers—marketplaces pose a real long-term threat to any VSV. They can fund significant sales efforts, offer disruptively low prices on software, and compete in ways unfamiliar to the typical VSV. I don’t want to be the boy who cried wolf, but VSVs should be afraid. They need to respond before it becomes too late.