Season 3 Recap: Six key takeaways

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Intro: Welcome to Two Sided, the marketplace podcast brought to you by Shear Tribe.

Sjoerd Handgraaf: Hello and welcome. My name is Sjord, CMO at Sharedribe, and I am your host. Welcome to the season three finale of Two Sided. Today, it's just me behind the mic. It's been a terrific season packed with great conversations with nine brilliant marketplace investors.

And in this special solo episode, I wanted to share what I thought were the key themes and takeaways or at least ones that stood out to me across those interviews. So consider this a friendly debrief, like a too long didn't read guide to all of the episodes in this season. Maybe you haven't listened to all of them yet or you haven't listened to any of them, and you're just using this to figure out which ones are interesting. Honestly, I think all of them were interesting. Maybe this is a good guide.

Join me for the next, hopefully, less than half an hour in which we sort of geek out about the things that we have learned from our guests. So aspiring marketplace founders, pay special attention because I think this is especially interesting for you. So let's dive in. Number one, no surprise, network effects are your moat. So one message rang loud and clear, and network effects are the holy grail of marketplace success.

Nearly every investor investor highlighted how crucial it is to build a product that gets more valuable as more users join. For example, Pete Flint from NFX stressed

Pete Flint: The best form of defensibility we've seen is through network effects. It's the most efficient. It's the most defensible.

Sjoerd Handgraaf: In other words, a strong network effect can protect your business from competitors over time by creating a some sort of self reinforcing advantage. We also heard on this topic from Sameer Singh, well known for his network effects blogs, breadcrumb.vc, and he looks at startup through this lens as well. So he told us that his first question when evaluating a marketplace is whether it enables what he calls a unique interaction among users. If don't have that, you don't have a network effect. The takeaway, make sure that your marketplace isn't just doing what others already do.

It should facilitate interactions between buyers, sellers, etcetera, that get better and more defensible as you scale. Network effects are the bedrock of a two sided business, and investors will ask you about them. Fortunately, all our guests believe that even in 2025, there are still plenty of untapped network effects opportunities out there. The next topic is something that we've also heard in the previous season when talking to founders and not investors. It's about the topic of constraining your marketplace.

So it's about start small and focus before you expand. So that really was another recurring theme focus, specifically to start with a niche or constrained market segment before trying to conquer the world. Going too broad out of the gate is a classic founder mistake. Mira Michalala from Piton Capital introduced us to the idea of lateral versus frontal attack in marketplace strategy. A frontal attack means taking on a giant incumbent head on, which is usually a losing battle for a new startup.

So Meera instead advises founders to

Intro: The company starts with a small adjacent market where you don't look like a direct threat initially. You fly under the radar for a bit until you dominate that adjacency. Then you launch an attack from that adjacency into the main market.

Sjoerd Handgraaf: In other words, find a niche beachhead where you can win rather than attacking Goliath on day one. This approach not only helps you avoid direct competition, but it can also lead to faster product market fit within that focus segment. If you think that this is interesting, I really recommend also listening to season one and two of two sided or or the summaries even of those seasons because that comes back again and again and again. Like, if you make your marketplace small, you constrain it well, you can figure out all of the mistakes, trouble, challenges within the small niche. You don't need to go broad to figure those out.

And also, Jeroen Arz from Speed Invest echoed this emphasis on focus. So he has seen many founders get lured into what he called, like, premature expansion, especially internationally before really nailing their home market.

Jeroen Arts: One mistake I I keep revolting against is the mistake of premature internationalization while they're still very early in their own journey and actually haven't quite figured out their home market.

Sjoerd Handgraaf: So that was Yaron's warning. His advice is to basically double down on your core market and validate the model there. Of course, like he mentions also that founders often do this as they are, like, pushed by over enthusiastic investors to to who are pushing growth, but it's really easy to underestimate the operational complexity and dilution of resources that come with spreading yourself too thin too early. So both Jorun and Mira are essentially saying, win small before you try to win big. Focus on a tight geography or a niche vertical, get that flywheel spinning, and then consider broadening out.

Again, it's advice I've heard in different forms many times, but hearing this seasoned investors practically insist on it was another great reminder. Interesting sort of and also detail on this that, Samir added a nuanced twist. So he said that, okay. You should definitely niche down, but don't pick a niche so narrow that it caps your upside. So he has seen founders air on both sides, so either trying to tackle too much at once or choosing an atomic market so tiny that it can't really ever scale.

And the art is in finding the sweet spot. So a contained market where you can realistically achieve liquidity, but that is at the same time a springboard into something much larger. So to sort of put the consensus, it's like focus early and expand later. And maybe very close to to that topic was another thing that came back again and again, and that is about nail early traction before chasing growth or even funding. Our investor guest also hammered home the importance of getting the basics right in the early stages.

Achieving liquidity, proving your model before you pour sort of gasoline on the fire. Andrew Blackmon, for example, suggests founders hold off on blitzscaling or big fundraising until there are real signs of traction. He cautions that building traction before raising capital is key, and he advises entrepreneurs to validate the marketplace idea first and get some uses going without relying on heavy funding. I particularly loved Andrew's practical point where he basically said that raising a ton of money too early can sometimes mask fundamental issues. Right?

So you can think, for example, about your unit economics being off or you're relying on I think he mentioned this also as an example in one of the companies where he was an operator in where they relied heavily for the growth on the paid channels or paid ads and that's why they're performance marketing. And then once the prices go up or once the economics of those things changes, then suddenly your business is in danger. So instead, you should focus on, like, manually solving the chicken and egg problem, delighting your first users, and ideally, of course, generating revenue. If you can even get a small community humming, he says that you're in a much stronger position to scale up sustainably. And, of course, as a result, you're also in a much better position to talk to investors when the time is right.

A really vivid analogy to this topic came from Mira Mikhailova. She warned against forcing growth at the expense of unit economics or product market fit, And she compared it to over fertilizing a plant, which I really, really loved. Here's what she said.

Intro: The scaling of a proposition that hasn't reached PMF, obviously dangerous. Forcing it to go faster is like applying excess fertilizer to a plant. It may work in the short term, but probably messes up the economics and the ecosystem in the long run.

Sjoerd Handgraaf: And, you know, in my mind, I can see founders that are listening to this, like, sort of nodding at that description because I think it's a perfect mental image. Grow for growth's sake can really burn your startup's roots. And her advice was to first ensure that the marketplace has healthy liquidity, that core supply demand equilibrium before worrying about adding, you know, fancy tech features or expanding to new market. Essentially, just get the garden growing naturally before you dump fertilizer on it to sort of stay within the metaphor. At the same time, don't grow too fast doesn't mean go slow in all aspects.

So Arz, he brought out something that I really, really like. I've been thinking about a lot since then. He highlighted what he values in founders or sort of a recent thing that he started to value in founders, which is their speed of decision making. And, of course, especially for early stage teams. So he looks for founders with what he called, like, high clock speed.

So those who can rapidly make decisions and adapt as new information comes in. And in Yaron's experience

Jeroen Arts: The clock speed that a founder brings to the business. So their kinda their ability to make decisions and to move forward, I think that's a really good indicator

Sjoerd Handgraaf: of future success. And this really resonated with me. I mean, in the chaotic early days of a marketplace, you can't afford analysis paralysis. The best founders he sees are decisive and action oriented, running rapid experiments to see what sticks while, you know, keeping the burn under control, of course. So the takeaway here is some sort of a balanced one.

Move quickly and iterate in the micro sense, but be patient in the macro sense. Like, you know, hustle day to day, but avoid the temptation to prematurely scale up things that aren't ready. And, you know, I can imagine that as a founder, I think that advice might be both sort of reassuring and challenging. You know, reassuring because it means you should focus on nailing a small win first, which is, of course, a great great motivation, but challenging because it sort of demands discipline not to get ahead of yourself. Maybe as an aside, Pete Flint also threw in a pro tip for early marketplace builders.

Identify which side of your marketplace is the hardest to get on board and tackle that first. His top advice for founders was to sort of concentrate on whichever side, you know, supply or demand is the critical or the hard side because if you can lock that in, then the easy side will follow. So it's a simple but powerful sort of framing to prioritize your hustle. Another point which came up, you know, another theme in this season were b to b marketplaces, which have a huge opportunity but specific challenges. Several of the interviews sort of ventured into this world, and the topics sparked kind of some contrasting viewpoints among our investors.

On the one hand, b to b marketplaces are seen as the next frontier. Many traditional industries are, you know, still just starting to be disrupted by digital platforms connecting businesses. Especially vocal on this were Lawrence Groenendijk and Bas Reiter of DFF Ventures who specialize in b two b marketplace investments. And so they spoke really enthusiastically about what they name as, you know, modernizing legacy industries. They noted, for example, how technology can create trust and transparency in b two b transactions, which often still happen, you know, right now through phone or fax or email.

And Voss pointed out that in b two b context

Bas Rieter: Trust is often the catalyst for liquidity. We're talking about large or order values. So there might be a hesitance

Sjoerd Handgraaf: without a trusted platform facilitating the deal. And this really hit home. You know? Unlike consumer apps, b to b marketplaces might deal with million dollar equipment sales or critical supply orders. If you can build a product that makes those transactions trustworthy through verification, insurance, escrow, quality vetting, etcetera, etcetera, etcetera, you can potentially unlock a ton of value.

And Boss and Lawrence gave examples like recommerce platforms for industrial goods that use particular tech to grade product quality, ensuring buyers and sellers feel safe with doing these big deals online. So for aspiring founders in these old school industries, the message is quite inspiring. Still, there are huge under digitized markets ripe for a marketplace solution as long as you address the specific trust gap in the b two b trade. However, we also heard a more cautious perspective on b two b marketplaces from Colin Gardner who runs yonder.vz. So Colin has seen some b two b marketplace start ups struggle to truly achieve the network effect model.

He was quite frank in the interview, and so he observed that, what he called head fakes in b two b marketplaces.

Colin Gardiner: There's a lot of head fakes in b two b marketplaces, honestly. Like, I mean, really what you're getting are these tech enabled brokerages. You're not really getting a marketplace model.

Sjoerd Handgraaf: In other words, many b to b, you know, quote unquote marketplaces are essentially traditional brokerages or agency businesses dressed up with a website and relying a lot on the founder's personality. So the founder might personally handle each deal, but, of course, in the end, that doesn't scale well. That's not a network effect. And so Colin noted that you can often get such a business to a decent revenue level, maybe even like series a b funding just with these brute force sales, but it will eventually fail to sort of cross the chasm into the self serving marketplace, which has the real network effects. And I thought, you know, that viewpoint was a great reality check.

It it doesn't even contradict Lawrence and Bos's optimism, but it reminds us that, you know, execution is everything. It's so important. And so to succeed, a b to b marketplaces must go beyond this manual brokerage model and actually build a liquid network. You know, if you're at home and you're building this b two b marketplace, I would say take both pieces of advice. There is a vast opportunity in bringing trust and efficiency to antiquated industries, and investors are very excited about that, of course, because the value of those markets is usually tremendous.

But at the same time, be mindful of designing the product so that it can eventually scale without simply adding more people to broker deals. For instance, try to leverage software and automation to reduce the need for human middlemen. And as Lauren and Boss suggested, think creatively about monetization too. So b to b platforms might not charge a simple transaction fee like Uber does. You know, you could think that with the average order value of those transactions that might be an a fee that will stop companies from using that model.

But instead, you could try earning revenue through subscriptions, escrow services, or financing solutions. You know, we heard from Boston Loudens that some b to b marketplace are moving beyond these traditional commission models. So the nuance from our guest is basically b to b marketplaces can absolutely work and absolutely produce huge outcomes or companies for returns, but the playbook might differ from consumer marketplaces. You often need, for example, deeper industry knowledge. You need more reliable mechanisms to build the trust and perhaps, like, a different path to scale.

I I found this debate super interesting because it shows how even among marketplace experts, there are sort of different angles on the same problem. And if you're a founder, you know, listening to call in might help you avoid fooling yourself about traction while listening to DFF's perspective might actually help you see the massive possibilities if you get it right. Then a fifth point, which I thought was a really fresh take, which I hadn't really realized before maybe or maybe I have, I just haven't seen it named so so so well, is about that great marketplaces create new markets. I think this came especially in the episode with Andrew Blackman. So this theme is the idea that the truly great marketplace, they don't just capture existing demand, but instead they create entirely new markets and unlock supply that was just previously nonexisting or or inaccessible.

Andrew Blackman articulated this beautifully. He said

Pete Flint: Biggest difference between, like, incredibly great marketplaces and good marketplaces are

Sjoerd Handgraaf: Is that the great ones

Pete Flint: are creating an entirely new experience that couldn't have existed before. Either you're unlocking new supply that never could have existed before, or you're somehow, like, enabling the connection that never could have happened on the demand side.

Sjoerd Handgraaf: So think about that. A merely good marketplace might make an existing process a bit easier or cheaper, But a great marketplace does something transformative. It brings something into the world that simply wasn't available until that platform came along. Andrew gave the example it's kind of a classic example of Airbnb unlocking, you know, an entirely massive new supply of short term rentals, namely people's homes that hotels could never provide. And so by tapping into these underutilized assets or unmet needs, Airbnb created a market that just hadn't been there.

And many of our guests echoes this notion in their own way. For instance, Colin Gardner emphasized the importance of aggregating unique supply. If your supply exists everywhere and is easily available, your marketplace faces an uphill battle. But if you aggregate truly unique, previously fragmented supply, you can offer consumers something they have never seen in one place before. And Colin saw that as a key driver of success for the marketplace that he has worked on.

And this theme is a great reminder for founders to ask, what is special about my marketplace? Are you just one more delivery app for restaurants, or are you enabling something fundamentally new, like delivery from home cooked, for example, a new supply? Investors usually really light up when they hear about a marketplace that can expand the pie instead of just competing for the same slices. Jose Moran also had a great thing about that. So Jose Moran from FJ Labs has invested in 1,100 plus marketplace startups.

He underscored that there is still plenty of room for innovation.

Jose Marin: I think that we are just at the tip of the iceberg. There is still a lot of stuff that can happen in marketplaces that has not been done.

Sjoerd Handgraaf: Is what Jose told us. And considering how many companies Jose has seen, that is an encouraging statement, I'd say. It means for early stage founders, don't be afraid to explore new angles. Whether it's applying the marketplace model to an industry that no one's tried yet or inventing a new way for people to exchange value, there are huge opportunity if you're truly offering something novel. One of my own reactions hearing this theme was, relief, you know.

You don't need to necessarily pitch your startup as we're like Uber for x or the next eBay, but better. In fact, you might impress investors more by showing how you create a market where none existed. If you can say, we're going to unlock a new category of supply that currently isn't part of the economy, I mean, that that's gold. Like, of course, it's easier said than done, but it is kind of a north star to guide your vision. Aim to build a product that people would scratch their head at before and then later say, how did we ever live without this marketplace?

And then finally, you know, talking about how did we ever live without this before, I already feel about this in some parts of my life, About this next topic, namely AI, the future AI and marketplace evolution. No 2025 podcast we would be complete without touching on AI. And indeed, several investors discussed how emerging technologies and trends like AI will shape marketplaces moving forward. Interestingly, there was a mix of excitement and also still some healthy skepticism around AI. On the optimistic side, we tell Pete Flint from NFX believes that AI is already both disrupting and enabling marketplaces, and he sees it driving the next wave of innovation.

In our conversation, Pete predicted that AI will create entirely new marketplaces that we haven't envisaged today. He's essentially saying that just as past tech shifts, he mentioned, I think, the Internet or mobile, you know, how those shifts birthed entirely new platform businesses, the AI revolution will do the same. So for example, AI might automate parts of transactions or matchmaking in ways that open up new possibilities for peer to peer exchange. Pete didn't mean this, I think, in a vague buzzword sense. As a marketplace veteran, you know, truly an investor, he's looking at how AI can give certain marketplaces an edge through smarter recommendations, faster onboarding, etcetera, and even enable new models where algorithms handle tasks that used to require humans.

One specific area he mentioned is what he called agentic or agent led marketplaces where AI agents act on behalf of users to negotiate or coordinate deals. It's pretty futuristic. I always have a hard time wrapping my head around these things. But on the other hand, if you think about it, it's also not that far fetched when you think about all of the routine coordinations that is happening in some marketplaces that AI could streamline. Andrew Blackman also weighed in on AI, but maybe with a more balanced view.

He sees AI as a tool to enhance marketplace experience. So making connections more efficient, helping with matching and pricing, but he noted that AI can't replace the human relationships and community that make a marketplace truly powerful. And I think that's a great point. A marketplace is often more than just an algorithm. It's also about trust and relationships.

And so AI might take away some friction, you know, automatically finding the best service provider, the best hotel deal, etcetera. But the network is what remains the moat. Then maybe on the other side of the spectrum, Samir Singh issued a bit of caution about chasing the latest trend. In his own words,

Sameer Singh: he said, I am scared of trains. Generally, when a train shows up, it's either bullshit or it's too late, and usually a combination of both.

Sjoerd Handgraaf: And I think that quote got a good laugh from me and also I think when when we shared the episode. But I think Samir's point is serious. Founders shouldn't let on to AI or any hot tech just for the buzz. He has seen wave after wave of hype and his advice is to focus on the enduring principles like real network effects, solving real problems rather than whatever is trendy this quarter. If an AI feature genuinely improves your marketplace, great.

But don't lose sight of the fundamentals of your marketplace. So what does the future hold? Our guest mentioned a few things, AI driven automation, generational shifts in behavior, Gen c coming into the market with different expectations and even regulatory changes opening doors. Pete, for example, encouraged watching for moments when an industry's rules or economics change because he feels that those can be the perfect timing for a new marketplace. But the consensus seemed to be that the core recipe for marketplace success remains the same.

Many of these core ingredients we discussed above, but that the context is evolving. So new technology like AI can be a differentiator and enabler if used smartly. And new demographics moving into the economy or new technologies can create windows of opportunity for startups and marketplaces to disrupt things. For the aspiring founders listening, would summarize the sentiment like this. Like, keep your eye on the horizon, but keep your feet on the ground.

Like, be aware of how AI and other trends might unlock new possibilities for your business because investors like Pete and others are certainly exploring that. But at the same time, you know, don't build a house on quicksand. Like, trends come and go, but a marketplace that truly serves its users will stand the test of time. I found this mix of views, like, super valuable. I already, in some calls with founders, have been sort of echoing some of these words.

And I think it's exciting to imagine what the next, you know, Uber or Airbnb or actually maybe more in a b to b marketplace business is. What a a successful marketplace might look like in an AI powered world. And at the same time, it's equally grounding to sort of remember that even the fanciest AI marketplace still needs to do the basics, nail liquidity, create trust, and have lasting network effects. There you have it. I think those were the key themes, at least for me, of season three of Two Cited.

We covered a lot. So from building moats with network effects to the importance of starting focused, to advice on getting that early traction, traction, insights on b to b marketplaces, creating new market opportunities, and then finally, the impact of AI in the future. And I think what's amazing is how these topics interconnect. So for example, start small and nail early traction so that you can build a strong network effect or use new tech like AI to augment an already solid marketplace dynamic. And hearing these investors share sort of complimentary and sometimes contrasting views has for me been a master class again in marketplace building.

And I hope that this recap has crystallized those insights for you as well. I want to thank you all for joining me in this season. It was a bit of a new direction talking to investors instead of founders, but I learned a ton right alongside you while you're listening. So whether you listen every episode or if you're just tuning in for this summary, I really appreciate you being here. I also want to give a massive shout out still to our eight guests, Jose Marin, Samir Singh, Andrew Blackman, Mira Mikhailova, Yaron Arz, Colin Gardner, Loudoun Schroene Dyke, and Basar Ritter, and Pete Flint.

Their willingness to openly share knowledge and some great stories made this season, I think, very special. As we wrap up, I felt that, you know, this season made me again incredibly excited about the future of marketplaces, which is, of course, good for our business as well as Sierra Drive. If season two with founders was about, like, here's how I build my marketplace, I felt like season three was more about here's what we spot and shape the next marketplace winners. And I think both perspective are valuable. So maybe my biggest takeaway is that the playbook for marketplace success is always evolving, but it's never sort of entirely rewritten.

So the principles of network effects, focus, liquidity, and trust, they, you know, they remain. We just keep finding new ways to apply them in new markets. So this was the last episode of season three. I can't promise when season four will be here. I'd like to maybe promise that there will be a season four, but I don't know when.

We do loads of things at SharerTripe, and we're a rather small, you know, but efficient team. We bring loads of other extremely useful content for aspiring marketplace founders or marketplace founders, marketplace operators, so go check that out at shareto.com/academy, for example. We also have the marketplace academy podcast, so if you are really in need of podcast, go check that out. And we also started doing a lot more videos, tutorials, and sort of like instruction or not instruction, but marketplace theory videos. So go check that out on our YouTube.

With that said, I just wanna say thank you for listening and learning along with me. If you have feedback, questions, or you just wanna say hi, please reach out. I love hearing from our listeners or the sort of the community of fellow marketplace enthusiasts. You can connect with me on LinkedIn. Just grab my name from your podcast player and look it up on LinkedIn.

I'm not gonna spell it here for you. It's rather too challenging. Or just send me an email, at short@share.com. That's sj0erd@sharetribe.com. This season, I got, like, surprisingly many super nice messages from people.

I always love getting them. It's always great to hear the value that we provide, and it's always great to hear that people learn as much as I do from these things. So thanks a lot for your time. Keep building. Keep hustling.

Keep that two sided passion in life. Talk to you in season four. Thank you for listening to two sided, the marketplace podcast. If you enjoyed this episode, don't forget to subscribe. And if you really liked it, please give us a rating or a review on Spotify, Apple Podcasts, or wherever fine podcasts are downloaded.

If you got inspired to build your own marketplace, go visit www.sharetribe.com. It's the fastest way to build a successful online marketplace business.