Marketplace

A business that connects buyers and sellers and takes a cut of the transactions, rather than owning the inventory itself. Airbnb, Uber, and Etsy are marketplaces.

Why it matters

Marketplaces can scale with strong network effects and light assets, but they face the chicken-and-egg problem of needing both sides at once. Solving that cold-start, and setting the right take rate, is the core challenge.

For example

Urban Company connects customers with service professionals and takes a cut of each booking, without employing the professionals itself.

Worth your time

All Markets Are Not Created Equal Above the Crowd · article Gurley's ten factors for judging a marketplace, the canonical checklist for what makes one great versus mediocre. Open abovethecrowd.com →

A Rake Too Far: Optimal Platform Pricing Strategy Above the Crowd · article The definitive piece on setting a marketplace take rate, why greed on the rake is how platforms get disrupted from below. Open abovethecrowd.com →

Related terms

Go deeper

See how founders actually handle this on Growing and marketing, part of the Starting Up hub.

eChai Partner Brands