Not All Marketplaces are Created Equal: Tales of a Marketplace Founder

Dave Lu
27 min readJan 22, 2019

My company Pared was recently included in an essay from Andrew Chen and Li Jin entitled What’s next for marketplace startups? Recently I’ve been seeing some great pieces about network effects coming from the insightful minds over at a16z such as 16 Ways to Measure Network Effects and The Dynamics of Network Effects. I always enjoy reading the analysis of smart people who are trying to synthesize and create themes about businesses like my own. James Currier at NFX Guild does a fantastic job of this and I’ve always been a fan of his take The Next 10 Years Will Be About “Market Networks” because it hits so close to home. The challenge is synthesizing so many disparate business models into a single tidy blog post. Unfortunately, the downside of generalizing is that you miss out on the nuances and key differentiators to success of any one business or model. Andrew or James wouldn’t get many readers if they focused on very specific businesses or companies because it wouldn’t resonate with a broader audience.

It’s always fascinating to see the analysis and breakdown of businesses like your own from the outside perspective of an investor or academic, but we rarely see many insights shared from the inside. No one knows or sees the strength or weakness of a network or marketplace better than the people who are building them every day. I learn so much from spending time with fellow founders of marketplaces like my friends over at Honor and Trusted or friends who are executives at networks like LinkedIn. Although not all of their experience is directly applicable or relevant, I always come away armed with something new that inspires ideation and curiosity about my own business. The recent articles from the team at Andreessen Horowitz coupled with these conversations compelled me to reflect and share my experiences and insights with marketplaces.

The Evolution of Marketplaces

One thing I’ve clearly learned over the years building marketplaces like eBay, Luxe and Pared is that not all marketplaces are created equal. Marketplaces have evolved over time. As the VP of Marketing at Luxe, an on-demand valet service, I helped launch six new markets for a…

Dave Lu

Managing Partner @ Hyphen Capital. Proud Taiwanese-American dad. Passionate about marketplaces and communities.