Tool · 10 min read

What Is the Chicken and Egg Problem in Marketplaces?

Sharetribe · Sharetribe Marketplace Glossary Free Beginner

A clear, jargon free explainer of the problem plus practical seeding strategies (single side focus, faking supply, concentrating in a niche), from a company whose no code tooling lets you launch a real marketplace to test all this quickly. Good as your first read to get the vocabulary straight, and a genuine option if you want to stand up a working marketplace without engineering. Use it to orient, then go build a small test.

  • The problem is that each side waits for the other to show up first
  • Concentrating on a niche makes both sides feel present sooner
  • You can launch a real test marketplace before writing much code

It answers 2 questions

  1. 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?
  2. 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

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  3. Andrew Chen ran rider growth at Uber and now invests at a16z, so this is the canonical breakdown of how marketplaces get off... andrewchen.com Essay · ~20 min read Required reading for marketplace startups: The 20 best essays Andrew Chen
  4. 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
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