Want your own slice of the p2p marketplace? Six questions you should ask yourself:

I had an idea a couple of years ago (was too busy with a healthcare app to pursue) for a highly mobile focused local marketplace specializing in used furniture.  The pitch being that most furniture being large would almost always require a local source for economical delivery and risk control.  This led me to do a fair amount of research on peer to peer marketplaces.  But first some facts about the most successful standalone p2p marketplaces:

1. Craigslist was founded in 1995 when internet users totaled around 16M.  There weren’t any slick, idiot-proof ways to build sites and hosting space was something few knew how to access.  I don’t have to tell you how popular Craigslist is and they have a very hippie-like profit model that is hard to compete with.

2. Ebay – Shocker.. founded same year and reaped similar benefits.

3. Autotrader went online in 1999 via partnership with AOL having a well established brand.

From a branding perspective, these guys bought prime real estate on Park Ave in the 18th century relatively cheap.  No one will ever not know who they are and what they do.

My point is that what they did can’t be done again; not the way they did it. There are now nearly 3 billion internet users and getting the attention of users is hard.  Really hard.  Internet content has gone from novel to commercial to pedestrian in the span of less than 20 years.  The internet is a really noisy place.  Google has spoiled us to believing we can find anything we want in seconds with precision.  And for the most part that is really true.  Content/knowledge has been commoditized, democratized and molecularized in staggering ways: Squidoo is a good example.

I am struggling to avoid using buzzwords like Social Media, Web 2.0 etc.  But the reality is that the way we choose to consume content and trust resources/entities is a messy process; texting/talking to friends, surfing sites maybe responding to affiliate ads that follow us around etc.  Understanding your consumer (who’s trust you need) well enough is the barrier to entry for commerce in this age.  Having a solid profile on your target audience is everything.  This article is really good:

How to Create a Lively p2p Marketplace 

The key is knowing your market really well and going ultra-niche.  Chairish is a good example.  They offer an experience superior to Craigslist for stylish furniture.  Then there’s Pintrest.  How bold is that?  They prove that feedback and peer review is independent of commerce.

This list shows the potential for further aggregation and oversubscription of consumer assets as well as the future of sourcing certain kinds of labor.  While people will still be buying stuff, a big chunk of commerce in the future will likely be occupied this sort of on-demand access to resources from consumer to consumer.  I, myself, have sourced labor from oDesk and Fiverr and as well as participated as a a crowdsource of labor for wegolook.com.

It would pay to think through to these kinds of scenarios to try and minimize the number of expensive pivots you might have to go through to enjoy success.  And it will have a huge impact on what kind of tech you wind up purchasing.  I suspect that whatever you wind up doing will be possible on a ready made platform or network of platforms already available.  A brutally simple example: http://www.sell.com  Then a niche p2p market for selling used phones: http://www.usell.com.

So in closing, the questions I would have to ask myself are:

1. Why would anyone trust me to provide the service and/or products and prefer mine to the thousands of other ways already available to them?
2. Is there a way to profile my target market accurately (enough) and how will this factor into my cost of customer acquisition vs. the lifetime value of a customer?
3. How exactly can I test the accuracy of my profile?
4. What profiles overlap with my target consumer (Prosumerism etc.)?
5. Have can I scale, technically?  This is usually the easy part.
6.  Then other more traditional business requirements like labor input etc.

The first four things will be huge.  I think the climax of p2p marketplaces will be in crowdsourced sharing networks. For example there are times I need a trailer to haul things that a pickup truck won’t.  But I don’t want to buy one because then I’d have to put it somewhere.  Conclusion: I don’t need a trailer.  I need access to one once in a while.  A marketplace that provided that would be valuable.  Have tools,that get used less than once a year? Could they be making you money?

See how this is being done to the extreme: http://abcnews.go.com/Business/show-money-make-extra-cash-renting-stuff-dog/story?id=14862818

If you are able to define your business according to a particular niche or group/network of niches, your odds of success will increase dramatically.

Leave a Reply

Your email address will not be published. Required fields are marked *