Essay · ~20 min read

Required reading for marketplace startups: The 20 best essays

Andrew Chen · andrewchen.com Free Intermediate

Andrew Chen ran rider growth at Uber and now invests at a16z, so this is the canonical breakdown of how marketplaces get off zero. He organizes the best thinking on the chicken and egg problem around one honest idea: you almost never launch supply and demand at once, you seed the harder side first (usually supply) in a tiny atomic network, then pull the easy side in. Treat it as a starting map of tactics, then pick the one or two that fit your city and niche.

  • Solve the chicken and egg problem by picking the hard side (usually supply) and getting it dense in one narrow slice: a single city, campus, or vertical, before going wide.
  • Liquidity, not signups, is the real metric: enough activity that a buyer who shows up actually finds a match.
  • You can bootstrap one side manually (curate listings, run single-player-mode value) before the other side exists, which answers the 'no supply or demand yet' worry directly.
Open on andrewchen.com ↗

It answers 3 questions

  1. Can I validate a marketplace idea before I have supply or demand?
  2. I'm a solo technical founder. How do I MVP a two-sided marketplace when I need both buyers and sellers before it works at all?
  3. I run a two-sided marketplace. Do I get my first customers by starting with supply or demand, and how do I avoid the empty-restaurant problem?

Read with it

  1. The single best thing ever written on customer conversations. It teaches you to ask about the customer's life and past... momtestbook.com Book · ~130 pages The Mom Test Rob Fitzpatrick
  2. The permission slip to recruit users by hand, do things manually, and deliver 'insanely great' experiences to your first few... paulgraham.com Essay · ~15 min read Do Things That Don't Scale Paul Graham
  3. For a two-sided marketplace, the first real decision is which side to define and win first, and this essay makes the case... NFX Essay · Long read (about 25 minutes) 19 Tactics to Solve the Chicken-or-Egg Problem and Grow Your Marketplace James Currier
  4. Before you tune CAC and take rate, this book gives you the structural picture of why marketplace economics compound: network... W. W. Norton & Company Book Platform Revolution: How Networked Markets Are Transforming the Economy and How to Make Them Work for You Geoffrey G. Parker, Marshall W. Van Alstyne, Sangeet Paul Choudary
  5. Lenny interviewed dozens of people who built Airbnb, DoorDash, Thumbtack, Etsy, and Uber, then distilled how they actually got... Lenny's Newsletter Article · ~25 min read How to Kickstart and Scale a Marketplace Business (Part 1) Lenny Rachitsky
  6. Once you decide supply is the harder side to get, this piece is the tactical playbook for signing up those first suppliers by... Lenny's Newsletter Article · ~25 min read How to Kickstart and Scale a Marketplace Business (Part 3): Growing Initial Supply Lenny Rachitsky
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