How to build a website like Airbnb

Airbnb is a phenomenal business.

In 2023, almost 450 million nights were booked on Airbnb—resulting in revenue of nearly $10 billion. What is truly remarkable is how well the company was able to bounce back from the decline brought over by the pandemic in 2020 and maintained a solid growth trajectory ever since.

When Airbnb first got started, online marketplaces were a budding trend. No tools or guidebooks existed, and the founders had to invent and build everything from scratch. Today, Airbnb employs over 1,200 developers.

The good news is that today's marketplace founders are in a much better position to start a website like Airbnb. Marketplace builders like ours at Sharetribe let you launch, run, and grow a marketplace website like Airbnb—at a fraction of the time and cost.

The hard part is getting a two-sided marketplace business like Airbnb off the ground. Building a marketplace is much harder than building a regular E-Commerce store.

With this guide, I want to help you with both. My goal is the help you achieve two things:

1. Find out the best way to build a website like Airbnb for your idea, requirements, skills, and budget.
2. Learn how to crack the challenges inherent in the two-sided marketplace model and build a successful marketplace business—leaning on lessons from Airbnb's successful history and our own experience of 10+ working with successful marketplace founders.

Let's dive in.

The basics we hardly need to cover: Airbnb connects hosts and guests and facilitates their transactions. This makes Airbnb a two-sided online marketplace. The business model relies on charging a commission—a service fee—for each transaction that takes place through the platform.

More specifically, Airbnb is a location-based peer-to-peer rental marketplace. This has some implications for what it means to build a website—and a business—similar to Airbnb, so let's quickly define all three concepts.

In a nutshell, Airbnb can be described as a...

• location-based
• peer-to-peer
• rental marketplace.

Location-based means that the customer needs to be at the same location as the listing to make a transaction. This affects both feature requirements and business strategy.

Peer-to-peer describes Airbnb’s primary user groups. On peer-to-peer marketplaces, private individuals can act as sellers, buyers, or both. B2C (business-to-customer) or B2B marketplaces (business-to-business) can also be successful, but they might require slightly different functionality than a peer-to-peer platform.

A rental marketplace brings together people who have idle assets with people who want to rent those assets. A rental website needs different features than product-selling marketplaces like Amazon or eBay. The rented property can be some type of space or anything from swimming pools to music studios or cameras.

Now that we've laid out the foundational building blocks of Airbnb, I'm sharing three examples of marketplace with a similar logic that have been built on Sharetribe.

• Swimmy lets people rent private pools in France and Spain.
• LandTrust is a marketplace for booking private land in North America.
• Nomady is a platform for renting camping sites in central Europe.

You can read the stories of each of these marketplaces and their founders through the links below.

You can find more inspiring examples of Sharetribe-powered marketplaces by browsing our customer gallery and founder stories.

Now, with these building blocks in mind, let's look at what the process of building a marketplace similar to Airbnb looks like.

In our experience working with successful founders, building a marketplace business like Airbnb happens through 10 steps:

1. Identify a strong marketplace idea
2. Choose the right business model
3. Start with a focused scope
4. Pre-validate your idea
5. Build a marketplace platform—start with an MVP
6. Onboard your first sellers (ie. the "hosts" on Airbnb)
7. Launch to customers
8. Reach problem-solution fit
9. Reach product-market fit
10. Scale into new markets.

The remainder of this article will go through what happens at each step in practical terms, and through the lens of a rental marketplace business like Airbnb.

These steps are based on our complete guide to how to start a marketplace, and I recommend checking it out for more in-depth discussion and lots of inspiring additional resources.

Airbnb's origin story is legendary, not least because of what it says about the power of great ideas.

In 2007, an upcoming design conference filled up hotel rooms in San Francisco. Roommates Brian Chesky and Joe Gebbia decided to earn some extra by offering to host attendees on air mattresses.

The idea led to a simple website site that brought three people to stay at Chesky and Gebbia's flat. A year later, Nathan Blecharczyk joined to start building the foundation of a two-sided marketplace website.

The rest is history, with many entertaining stories from selling breakfast cereal to getting rejected by famous VC firms before reaching a valuation measured in billions.

Today, launching a website like Airbnb is much easier, quicker, and more affordable than in 2007. But the very first step—how the founders came up with a great idea—is as relevant as ever.

Chesky and Gebbia got the idea for Airbnb by identifying an underused asset: extra space people had in their homes. In our experience, this is a very common way founders land on marketplace ideas: they look around and spot inefficiencies.

Another road to a great marketplace idea is identifying a problem founders have themselves—and how it could be solved by a marketplace. Chesky and Gebbia, too, got their idea by looking at the empty space in their own apartment. They also quickly realised that the other side of the marketplace had a problem too: difficulty finding hotel rooms during peak demand.

These days, we also often see a third path: identifying a niche market that is poorly served on existing platforms (or any other improvement to the offering of an established player).

The latter is how many interesting Airbnb competitors have emerged—Sharetribe customer Socialbnb is a great example.

In a nutshell, a great marketplace idea is the result of four factors:

• It solves a real problem for both sides of your marketplace (supply and demand).
• It targets a large enough market that matches your business goals.
• The market is fragmented (many suppliers and customers).
• There’s potential for frequent usage (repeat purchases).

When you start looking at the world through the eyes of a marketplace founder, you'll likely start noticing ideas everywhere.

At Sharetribe, we studied how the top marketplaces in the world monetize.

We found that most one or several of these six revenue models:

• Commission: charging a flat fee or a percentage out of each transaction.
• Membership: charging a subscription fee for joining the platform.
• Listing fee: charging a fee when a provider posts a listing.
• Lead fee: charging providers for access to customers.
• Freemium: charging for additional features, but core features are free.
• Featured listings/ads: charging providers or other businesses for visibility.

We also found out that commission—the model also used by Airbnb—is by far the most widely used.

Airbnb charges a commission—which it calls a service fee—from both hosts and guests. Similarly, platforms like Amazon, Etsy, Upwork, and Fiverr all use commission as their primary revenue stream.

Commission is a popular business model for a reason.

First of all, it poses minimal barrier of entry to new users. Especially in the early stages, marketplaces typically charge a commission from the supply side only. This makes signing up for the platform easy: customers don’t need to pay extra to transact on the platform, and providers only pay a fee when they make money.

Commission also tends to be the most lucrative of the business models. The website owner gets a piece of all the value that happens through the marketplace.

There are a couple of inherent challenges to this model, too.

First of all, the commission model exposes a marketplace to the threat of marketplace leakage: users taking payments offline to bypass your commission. Airbnb and most other marketplaces like it combat the challenge by offering so much value that going around its payment system isn't worth the trouble for users.

Another challenge is that the commission structure is very complicated to implement from a technical and legal standpoint. Our recommendation is to integrate your platform with a third-party payment provider that has a dedicated payments product for marketplaces and platforms. Otherwise, there's a risk that you can't charge your commission in a way that complies with local and regional online payment regulation.

Needless to say, Sharetribe has built-in support for the commission business model and an integration to Stripe Connect to process payments safely and reliably. (It's also very easy to build flows for membership, listing fee, and lead fee models without coding on Sharetribe, if you're considering those revenue strategies.)

For more on marketplace business models and the payment infrastructure, check out our resources on marketplace business models and marketplace payments.

Airbnb is a global marketplace. As a customer, you can find a place to stay on Airbnb almost anywhere you can imagine traveling.

This might make the next piece of advice feel somewhat counterintuitive, but it's something we've heard from pretty much every single marketplace expert, investor, and founder we've talked to.

That advice is: start small.

Instead of targeting the entire world off the bat, focus on a singe region, country, or even a single city or neighbourhood.

The logic behind this recommendation is that the hardest part of building a marketplace is to get both sides of the business working. You need to have enough supply to attract demand, and enough demand to keep your supply happy.

It's much easier to crack this challenge with small initial user base. And it will be much easier to expand your platform when you have established a user base that is small but strong and loves your platform.

In fact, this is exactly what the Airbnb founders did. They started in San Fransisco where they knew the yearly event calendar and the hotel market and its shortcomings.

As startup guru Paul Graham told Airbnb founder Brian Chesky: “It's better to have 100 people love you than a million people sort of like you.”

Once you've identified your idea and revenue model and decided on the initial scope, I recommend that you take a few steps to pre-validate your concept. This helps you avoid spending time and money on doing the wrong things.

In the pre-validation stage, the goal is to validate if you've made the right assumptions about your audience, their problems, and their willingness to pay for the solution you've come up with.

Here are the steps:

1. Find and talk to your target audience in person and online. Starting small makes this a lot easier: you can engage your target audience in online forums and groups, or meet them live.
2. Ask if people have the problem you think—and how they’re solving it now. Then, pitch a prototype of your idea and listen to their feedback.
3. If the feedback shows some of your assumptions were wrong, change your approach and validate again!

In terms of what you should ask them, I recommend open-ended questions like:

• How do you currently find the rental (or product or service)? Is it easy?
• How do you compare different locations (or again: products or services)?
• Could you take in more customers than you currently have?
• How do your customers currently find you?
• And so on.

As you research your target market, you may find another marketplace already operating in your space. Don't let that discourage you. If you can solve the problem better than any other existing solution, you have a window of opportunity. So learning how your competitors do it can offer key insight into how your marketplace can offer an improvement.

So as you can see, you can get some validation for your idea before building anything.

But at some point, you'll have exhausted the learning opportunity that comes from just talking. The next step is to build something and see how users engage with it.

The best way to start a marketplace like Airbnb is in stages. Once you've pre-validated your idea, you want to get the first version of your website out into the world as quickly as possible so you can continue learning and fine-tuning your concept.

This version is called the Minimum Viable Platform, or MVP.

The list of key things your first version has to achieve is rather short. You'll need to be able to:

• Communicate your value proposition (on a website landing page, for instance)
• Let users find, create, and book listings
• Faciliate payments and collect a fee ((if you plan to charge a commission, it's a good idea to be able to validate this revenue model from day one)

In the MVP stage, it’s ok to do things manually, even if you plan to automate them later. Again, getting something live quickly—without spending your entire budget on it—is the goal.

Sharetribe is a great solution for this, for two main reasons:

1. It has all the functionality you need for a location-based peer-to-peer rental marketplace like Airbnb from day one, without any coding.
2. It's infinitely scalable and expandable—so once your business takes off, you don't need to rebuild everything from scratch. You can add custom designs, features, and functionality on top of the no-code essentials.

But then again, I'm biased. So let's put my subtle self-promotion aside and look a bit deeper into what functionality a marketplace like Airbnb needs, and what options, beside Sharetribe, you have for building them.

The features on Airbnb are very different from those offered by traditional online stores and product-selling marketplaces. Your rental marketplace will likely need at least some of these features from the start.

These days, Airbnb has a wide variety of functionality that has been built over the past decade. It's important to remember that Airbnb did not start with all this functionality in 2008. Instead, they iterated and improved based on user feedback—as this tweet from Brian Chesky illustrates well.

So, when defining the functionality your marketplace needs, focus first on the core functionality. What is absolutely vital to have on day one? And what can you build later once you've validated your marketplace idea and have the revenue or funding to finance additional development?

Here is our list of the core features of Airbnb:

• Profiles and listings
• Map and location search
• Online payments (with delaying payments and holding funds)
• Availability and booking management
• Two-sided reviews
• Admin tools

A few words next on each item.

On Airbnb, a huge number of customers and providers interact and transact with each other.

To list or book a rental apartment, users need to:

• Create an account
• Create and update their listings (the rental properties)
• Publish and update their user profile

Informative and nicely designed profile and listing pages help boost your marketplace's conversion rate and increase trust between users.

Here's an example of how profiles and listings look on Biketribe, Sharetribe's rental marketplace website template that works very similarly to Airbnb.

On traditional eCommerce marketplaces like eBay, location doesn't matter, as the products sold can be shipped worldwide. On location-based marketplaces like Airbnb, the guest and host will need to meet for a transaction to succeed. Or at least the guest needs to be at the host's rental property physically.

This means a location-based marketplace can’t get by without a powerful, location-based search engine that allows users to look for listings in their ideal location. Showing the listings on a map is essential, as well.

Here's an example from Sharetribe.

When a marketplace offers services or rentals, providers need a reliable system to specify when their listings are available. Customers should only be able to browse and book listings that are available during their desired dates. When a listing is booked, it should automatically be defined as unavailable for that period.

This feature is a crucial part of the value proposition of a rental marketplace like Airbnb. It helps providers make the most of their rentals, boosts successful transactions, and avoids frustrating double bookings.

Classified sites like Craigslist connect customers and providers locally but don't facilitate payments between them. Peer-to-peer rental marketplaces like Airbnb allow the customer to make a booking and pay through the site. This is critical if you wish to monetize through commissions, because that requires the transaction happening through your marketplace.

Robust payment functionality makes using the platform easy and convenient. Facilitated online payments are also safer than dealing with cash or direct payments. All these factors are crucial for building a successful marketplace business.

In addition, many Airbnb-like businesses add a layer of trust with a feature called delayed payouts. When payouts are delayed, customers pay for a listing right away when they book it. The provider, however, receives the money only after the booking has passed.

Delaying payouts is a powerful way to ensure both the providers and the customers of a marketplace make bookings with honest intentions.

Online payments are subject to complex legal regulations. Charging a commission and delaying a payout add a lot to the regulatory and technical complexity.

If your platform isn't powered by a tool like Sharetribe (which comes with a pre-built payment system and support for commission and various other monetization models, and integration to Stripe Connect), I highly recommend that you build an integration to a payment gateway with a dedicated marketplace offering. (Here's our complete guide on marketplace payments with a lot more information.)

Peer-to-peer marketplaces are based on trust between strangers. Online stores and platforms like Amazon usually ask customers to review the sellers. But on marketplaces like Airbnb, providers also need to be sure the customers are trustworthy.

That’s why two-sided review functionality is a must. After a transaction, the customer reviews the provider, and the provider reviews the customer. Public reviews increase trust, and great reviews also boost sales.

Succeeding with a marketplace will require daily monitoring and management. As a marketplace admin, you'll want to be able to send notifications to your users, moderate user-generated content like profiles and listings, control user access, see your transaction processes, and so on.

When Airbnb first launched, online marketplaces were something completely new. While many things have changed since the early days of Airbnb, coding a similar location-based peer-to-peer rental marketplace can still be a complicated, time-consuming, and expensive project, depending on how you go about it.

Today’s marketplace entrepreneurs have alternatives that don't require development skills or massive budgets.

Today, the three most common ways to create a marketplace like Airbnb are:

• Coding from scratch
• Using a combination of no-code tools
• Using a marketplace builder.

In addition to these three approaches, there are several other ways to create a website like Airbnb. For example, it's possible to use a generic website builder like Wordpress with marketplace plugins. While none of these can quite match the speed to market of dedicated no-code marketplace software or offer the same flexibility as custom development, they may fit your specific situation. If you're looking for the right approach for you, have a look at our article on choosing the right marketplace software.

Custom development gives you a lot of freedom to build and design your marketplace. But a marketplace is far more complex than your average web application. A custom development process is extremely time-consuming and heavy on upfront costs.

If you’re not a technical founder, hiring a developer to build your marketplace from scratch will require a budget in the five figures. Though development costs vary between agencies, even the most cost-efficient choice will likely set you back north of $50,000 just to launch your site. That sum won't include the cost of third-party tools, maintenance, updates, hosting, or monitoring. You will still need to pay these costs on a monthly basis.

If you’re a software development expert, the option to code from scratch is more accessible. If you can build the frontend and backend yourself and are willing to take on the maintenance work, the costs will be limited to hosting and third-party tools. You can benchmark the Airbnb technology stack or get to work using the technologies you're familiar with. You can use the programming language (Ruby, PHP, JavaScript, Python, Java, Clojure...) you know best.

If you're interested in exploring this option further, I highly recommend this article on developing a marketplace app by our senior full-stack developer Mikko. It's a detailed guide to building a marketplace app from scratch and helps you estimate the scope of the project, choose your technology stack and prioritize features and functionality.

However, even if there are no costs for the actual development work, there's a signifincat opportunity cost you should consider. Your time as a marketplace founder is your most valuable asset.

Is it really the best investment to spend it on developing marketplace basics?

Custom developing the bare essentials of a modern marketplace will take several months of focused work. And none of that work translates into a real competitive advantage, because marketplace essentials are very similar across platforms.

For a founder with technical skills, I'd really recommend going with Sharetribe's Developer Platform. You get the marketplace essentials built-in and can spend your time and focus on adding your unique features and designs on top.

But what if you're not technical and don't have the budget (yet) to outsource development? Let's look at a few options for you.

Using no-code tools to launch your first version is a much faster way than custom development.

In fact, even if you do know how to code, I'd still recommend considering this option. Again, your time and focus are your most important resource, and no-code can free those up for more important work.

If you don't want to go with a no-code marketplace builder like Sharetribe, you have the option to build your platform with a combination of no-code tools.

A common toolset could be:

• A website builder (like Webflow) for your landing page
• A tool like Typefrom to collect data from your users
• Airtable to organize the data
• Calendly for calendar bookings
• MailChimp for marketing automation
• A payment provider like Stripe to process payments
• Zapier to connect all the tools together
• Or, if you're a skilled Bubble user, building the entire site from scratch with Bubble is also an option.

A setup that relies on an interplay of several different no-code tools isn't necessarily the most solid, and things may easily break. But this might not be a concern if you're only testing your concept for a limited amount of time.

This setup definitely isn't scalable, so when the time comes to expand your platform, you'll need to rebuild it from scratch. This, of course, is a positive problem to have, and not necessarily something to worry about on day one.

In my experience, the biggest drawback of this approach is that it can still take a considerable amount of time to figure out your feature requirements and get the interplay of various tools working to your liking. If that time is away from engaging with a real audience and learning how your idea works, the opportunity cost is just too high in my opinion.

And even if scalability isn't the biggest factor to consider at the MVP stage, you might be wise to spare some thought for the future.

Especially if you're targeting a competitive market, it might be that you'll need to invest in some custom features rather soon to stand a part from competitors. At that point, you might find yourself stuck between a rock and a hard place: not able to build anything custom with your current setup and not able yet to pay five-six figures for a complete rebuild.

If you have a business idea that works very similarly to Airbnb, using a marketplace Software-as-a-service (SaaS) tool is by far the fastest way to market. That can mean ours at Sharetribe or a Sharetribe competitor, which we've listed and discussed in more detail here.

For example, Mike Williams launched a rental marketplace for music studios in one day with Sharetribe and grew it into the world’s largest before exiting.

Marketplace SaaS is also the easiest choice for non-technical founders. If your software gives you the essential marketplace website features, you can create a website similar to Airbnb in a matter of days instead of months. You won't need to worry about hosting, maintenance, backups, or updates and can launch and run a marketplace entirely without coding.

Using a SaaS marketplace tool is great if you're not a developer—and again, even if you are, this approach lets you validate your idea and find a product-market fit without spending months building your website.

Another big benefit is that maintenance, security compliance, updates, and so on are usually taken care of. Especially at scale, this is usually the work of one or several DevOps engineers.

Building your marketplace with a ready-made tool doesn't give you the same freedom as custom development. There will be some functionality unique to your marketplace idea that the no-code software does not support. At the early stages, this is a reasonable trade-off to make in favor of a faster time to market.

There are also marketplace builders available that allow for adding custom features on top of the no-code builder. Sharetribe is a pioneer in this category: our product lets you keep the no-code marketplace builder and add custom-coded features, designs, and integrations on top. (And if you don't have a developer, our global network of Sharetribe Experts is there to help.)

The fastest way to get the first version of your marketplace out there and start learning from your users is to create a fully functional marketplace MVP with a no-code software tool like Sharetribe. Depending on your idea, you might even get forward with a simple website, matching your customers and providers manually! Whichever solution lets you launch fast while still delivering a great customer experience, that’s what you should go for.

Airbnb-like platforms need to handle complicated functionality from filtered searching, geolocation, and online payments to communication between the users and review systems. Building such a site from scratch requires a lot of work and technical skills, and that's why outsourcing development will nearly always cost well over $50,000.

Using dedicated marketplace software can help you save both money and time. Here are two example budgets for the first year of running a no-code, Sharetribe-hosted marketplace and a self-hosted, customized Sharetribe platform.

In this example budget, we assumed you're using Sharetribe's no-code builder to validate your idea and build your MVP and want to keep costs to a minimum.

In addition to building a website, you’ll likely need to spend some money on building your brand and marketing your site. On top of the costs in the table, you may want to outsource design work, buy fonts, images, or certificates, and pay for ads or marketing solutions. However, there’s a lot you can do with affordable or free online tools.

Please note that the subscription does not include the time you spend building your platform, which you can do during your 14-day free trial and with the Build plan ($39/month) if you need a bit more time before going live.

At this stage, you probably know your target audience well and have already generated some revenue to fund the development of your marketplace's next version. Sharetribe is specifically designed to power websites similar to Airbnb with zero to minimal customization work.

If you don't have a developer on your team, check out the Sharetribe Expert Network. We've partnered with carefully better agencies and freelancers who are happy to help you customize your Sharetribe marketplace.

However, please note that the budget above is a rough estimate – prices for designs and development vary greatly depending on the Experts’ hourly fees and the extent of customizations you need for your idea. Still, compared to coding a marketplace from scratch, you are sure to save time and money, which you'll be able to put into another important aspect of growing a business.

The budget is for a comprehensive custom marketplace project. You could also only add one custom feature or modify your visual design only while otherwise keeping the out-of-the-box functionality. In this case, the custom development or design fees would stay much lower.

Developing with Sharetribe is free for 14 days. You can then continue building with the Build plan ($39/month) and upgrade to a higher plan when you launch your marketplace and want to onboard actual users.

When your MVP is ready, it's time to bring in your first users.

Usually, the best way to start building a marketplace audience is to start with the supply.

The supply tends to be more willing to sign up to a new platform with a promise of new demand, even if that demand isn't there yet. Customers, on the other hand, aren't as flexible. If they visit a new marketplace and don't find what they're looking for, they leave and usually don't return.

So, start by building an initial, really high-quality supply before you open your marketplace to the demand.

In our experience, there are as many ways to find sellers as there are marketplace ideas. Some common ways include:

• Finding them in online forums and groups
• Visiting local meetups and events
• Visiting them in person
• Maybe becoming a supplier yourself
• Faking initial supply (scraping listings from the web or find the listing your customer booked manually).

Airbnb famously contacted hosts on Craigslist and encouraged them to sign up on Airbnb, as has been documented by Dave Gooden.

This is an are where getting ideas an inspiration from other founders can be really helpful. Here are some resources:

• Our guide to building marketplace supply
• How Mike Williams onboarded and grew supply for his music studio rentals marketplace, Studiotime
• Podcast: Drive lah found supply by leaving flyers on the windshields of parked cars - Gaurav Singhal (Drive lah)

Your marketplace like Airbnb has a good amount of initial hosts (or whatever term you use for your supply).

Now is the right time to bring in just enough customers so that the supply and demand on your marketplace are well-matched. The faster you get both sides on your marketplace interacting, the sooner you learn if your idea has wings.

Note that by "launch", I don't mean a huge marketing effort with all the bells and whistles—not yet. The best time to do a proper "marketing launch" is later, when your initial audience is working and you've reached problem-solution fit (more on this step in the next chapter). (And, as this tweet from Brian Chesky testifies, you can do a marketing launch several times if the first one didn't make big enough waves.)

In the case of a marketplace like Airbnb, your initial supply might already have the key to unlocking demand. They might have existing customers and marketing channels of their own to bring to your marketplace—and it this is the case, you should definitely encourage them to do so.

You might also go to places similar to where you found your supply: online forums and local meetups. Paid search ads (like Google Ads) could also work, but make sure they're really targeted so you don't waste money on reaching too big a crowd.

When your supply and demand are in place, your next goal is to reach problem-solution fit.

Doing that validates that your marketplace idea works: you've identified a real problem and created a good solution for that problem.

It's important not to start scaling your marketplace before you've reached first problem-solution fit and then product-market fit (more on the latter in the next chapter).

So, how do you know that problem-solution fit is there?

The top three signs are:

• You're facilitating transactions regularly, on a recurring basis, and with less and less intervention from you.
• Your user base is growing (slowly and mostly organically through word of mouth—don't invest in scaling yet!)
• Your marketplace liquidity is improving.

If these aren't happening, don't lose faith. This simply means you need to iterate. Go to your users, ask them what's missing from them having a great experience on your marketplace, and take the lessons into your strategy and product.

After problem-solution fit comes product-market fit: validating that you're targeting a good market with a product that can satisfy that market.

Indicators of product-market fit on a marketplace are these key marketplace metrics: 

• Liquidity
• Repeat-purchase rate
• GMV retention
• Unit economics (customer acquisition costs vs. customer lifetime value)

The most important metric is liquidity. It measures the likelihood that a seller gets their listing sold and that a buyer finds what they’re looking for. 

To get those numbers up, this is likely the right time to:

• Expand your MVP. At this point, you'll likely need to invest in custom features to attract more people to your platform and automate processes to reduce costs.
• Build a growth engine for your marketplace. Test different marketing tactics and see what works in your market. Note that depending on your exact marketplace idea, you might need different tactics to bring in more hosts than to increase demand.

For Airbnb, these tactics included a host of manual and automated approaches. Early employee Jonathan Golden lists activities like:

• Meetups with hosts
• Outreach to targeted guests
• On-the-ground host referral campaigns
• "Latching on" to local events
• Encouraging employee travel to boost demand.

You might also find that, similarly to Airbnb, there's overlap between guests and hosts on your marketplace. If this is happening, lean into this dynamic. Encouraging customers to also become sellers on your marketplace can be a huge growth lever.

After you've reached product-market fit...the sky is the limit.

You now know what works in your initial market. It's time to apply those lessons learned—and maybe a handful of new tactics—to expand your reach into new markets.

The four stages of scaling your marketplace are:

1. Decide how you’ll scale your marketplace (by adding a new category, new user group, or new location)
2. Choose your next market
3. Create a playbook
4. Raise funding (if you need to)

In order to not stretch yourself too thin, it's a good idea to expand one new market at a time. According to Jonathan Golden, even Airbnb—a global marketplace by nature—saw benefits in a step-by-step approach:

"Our marketplace was global from day one, but there were numerous benefits to targeting specific geographies over a fixed period of time. We looked for tactics that showed promise, then figured out how to double down and get more sophisticated and scalable. There’s no single technique to credit with Airbnb’s early market growth; the sum of all of these strategies was greater than the parts. And your early course will rarely be linear. At one point, we were ramping up 50 markets simultaneously, and clearly spread too thin. After a moment of truth, we scaled back to a maximum of ten markets at a time."

This guide helps you lay out the exact steps for your specific scaling journey.

And this guide is a great source for considering your marketplace funding.

And as we're talking about funding, I'll conclude with a famous anecdote from the history of Airbnb. In its early stages, the founders contacted seven investors in an attempt to raise $150,000 at a $1.5M valuation (meaning that you could have bought 10% of Airbnb for $150,000).

Five rejected. Two didn't reply. Founder Brian Chesky has shared screenshots of all five rejection emails and ends with an inspiring quote:

"Next time you have an idea and it gets rejected, I want you to think of these emails."

Creating a successful marketplace business is a big challenge. Building a powerful marketplace website is an important step but not the whole story. What counts is how quickly you'll be able to learn about your users, solve their biggest problems, and grow and expand iteratively.

The surest way to succeed is to focus on a clearly defined target audience and answer their needs better than anybody else. You'll start learning about both when you launch your site.

The faster you launch, the quicker you can start learning about your audience. The more you learn, the better you can develop your offering to serve your audience better than any other solution.

Sharetribe has been developed with this process in mind. It is designed for launching fast and jumpstarting the learning process quickly and without coding. But it supports you just as well when you want to develop your business and platform further.

But no matter which approach you choose, I hope this article helps you embrace the iterative approach. Validate your idea by first talking to potential users. Find a business model that supports you through the early stages and helps you grow. Identify your core features, choose a fast way to build them, and launch your minimum viable product.

If you're interested in reading more about the steps of building a marketplace, check out our How to start an online marketplace guide. It offers lots of expert advice for marketplace entrepreneurs that you can apply regardless of how you decide to build your website.

Best of luck with your marketplace business!