@daan_kinderfee

„Liquidity isn’t the most important thing. It’s the only thing. “ Simon Rothmann – Greylock Partners

@daan_kinderfee

About myself

• Mathematician

• Technical background

• Co-founder @ Kinderfee

• Worked in Investment Banking for 3 years before founding Kinderfee

• Work at Kinderfee and as a startup mentor

To get in touch:

• @daan_kinderfee

• daanlo.tumblr.com

Daan

@daan_kinderfee

Liquidity disected

@daan_kinderfee

Liquidity disected – the exponential curve

Liquidity

Bus

ines

s vo

lum

e

Frustrating waste land

First handful of transactions

Things start to happen

BOOM!

@daan_kinderfee

Magic formula for estimating your market liquidity

N = total number of potential needs

A = number of different demand

offers

B = number of different supply offers

(A * B)/N2

@daan_kinderfee

Liquidity disected

No match

@daan_kinderfee

Liquidity disected

Demand Supply One match

@daan_kinderfee

Liquidity disected

Many matches start happening

Demand Supply

@daan_kinderfee

Magic formula for estimating your market liquidity

N = total number of potential needs

A = number of different demand

offers

B = number of different supply offers

(A * B)/N2

@daan_kinderfee

Understanding YOUR marketplace

@daan_kinderfee

Where on the marketplace value chain are you?

Online

Classifieds Auction / Reverse

Auction Marketplaces Community

Marketplaces

Prevalent from 1990+ Prevalent from 2000+ Prevalent from 2010+

Much higher CLTV

Particularly good for marketplaces that require a large element of trust

Slightly higher CLTV

More trust & services than online classifieds

Low CLTV

Monetisation either through Ads or Subscription

Known counterparty

Handling of payment

Transactional knowledge

Additional services

Transaction made on platform

Enables user ratings

Searchable list of available offers

Low trust & low convenience

@daan_kinderfee

BCG – product life cycle matrix

Online Classifieds

Auction / Reverse Auction Marketplaces

Market share %

Gro

wth

%

Community Marketplaces

Cash cows Low investment requirements High margins / cash flows Slowing growth (imminent)

In early growth phase Rising stars & questions marks Showing huge growth

@daan_kinderfee

Number of sides on your marketplace?

Hard to get liquid Impossible to get liquid

One-sided marketplace

1.7-sided marketplace

2-sided marketplace

3-sided marketplace

Easier to build Easier to defend

@daan_kinderfee

What type of geographical liquidity is required?

Hard to get liquid Impossible to get liquid

Location independent

Local Postal Global

Easier to build Easier to defend

@daan_kinderfee

What factor does time play?

Hard to get liquid Impossible to get liquid

Time independent

12-24 hours Days Real time

Easier to build Easier to defend

Typically mobile first

@daan_kinderfee

10 second breather

@daan_kinderfee

Who is paying on your marketplace (and in what currency)?

Babysitter / Supply Parent / Demand

@daan_kinderfee

Who is paying on your marketplace (and in what currency)?

Host / Supply Guest / Demand

@daan_kinderfee

Who is paying on your marketplace (and in what currency)?

Car owner / Supply Driver / Demand

@daan_kinderfee

Who is paying on your marketplace (and in what currency)?

User

@daan_kinderfee

< <

In general...

@daan_kinderfee

< <

In general...

The side that is paying in trust is always harder to get liquid.

@daan_kinderfee

< <

In general...

The side that is paying in trust is always harder to get liquid.

Money is plentiful – trust isn‘t!

@daan_kinderfee

5 second breather

@daan_kinderfee

@daan_kinderfee

Typical transaction USD 80 per night 4 nights = USD 320 15% fee = USD 48

Guest Will do 1-3 trips per year

Host Can host up to 365 days per year

Please note: this example is my estimate. The data is entirely made up.

If this says USD 2 you are in

trouble

@daan_kinderfee

11 tips for creating liquidity

@daan_kinderfee

Design your site to create an appearance of activity

@daan_kinderfee

Focus on the side that takes longer to delete their account

-> this is often the supply or content creating side

@daan_kinderfee

Provide one sided utility

@daan_kinderfee

Find aggregators for supply or demand

Think adjacent

@daan_kinderfee

Think BIG, but START small!

Hustle! – in exponential growth every seed customer counts

@daan_kinderfee

Make your community work for you

@daan_kinderfee

[Scrape online listings and auto publish]

I don‘t recommend this, because it will kill your community

@daan_kinderfee

Understand YOUR marketplace

Be resourceful

@daan_kinderfee

Focus! Control N!

(A * B)/N2

@daan_kinderfee

Curate curate curate

“Force“ matches manually – even if it won‘t scale

@daan_kinderfee

Iterate around your customer

@daan_kinderfee

Hang in there!!!

@daan_kinderfee

Thank you