What’s Next for Marketplace Startups? | Hacker News Reader

What’s Next for Marketplace Startups?

andrewchen.co

54 pointsyarapavan17 comments

I would say Zocdoc is the best example of B2C company tackling a regulated industry (healthcare) through a marketplace that I have come across. It does seem to me that more startups are tackling the professional services layer with B2B solutions at this point. i.e. helping a lawyer process documents for discovery or allowing a doctor to more quickly process medical images for diagnosis.

It seems to me, physician groups, law firms, accounting firms and architecture firms have all consolidated over the years, making B2B solutions fit better with status quo.

I also think it is really hard for a marketplace to prevent future service transactions from occurring offline. As anyone who has used TaskRabbit knows, the first thing that happens is you usually get a direct number from the end provider and a lower rate to skip the marketplace in the future.

I hadn’t heard of half of these newer companies. Is there a way to stay on top of this? Some of these seem pretty useful.

I guess this is also telling me I should catch up to the times and stop finding contractors on Craigslist.

One problem, that is alluded to but not really addressed in the article, is that so much is still offline--especially for those of us who don't live in the middle of major metros. I'm not even sure how much of this is really a technology problem.

I feel the general pain. There are a number of things I would be willing to write a check tomorrow to have handled at an even semi-reasonable price if I could just make a phone call and say "Make It So." Unfortunately my really good contractor retired and the last contractor I found (through Lowe's) did a generally good job in the end but was terribly uncommunicative and otherwise difficult to deal with.

I have various companies and individuals who do stuff for me but, in general, finding someone to do some semi-defined task for me is painful and I don't really expect that to change.

I thought services like Angie's List were a way to circumvent the 'finding a _____ guy/gal' for some job.

How do you envision a perfect service functioning?

Ask your neighbors for a recommendation?

I actually don't mean to be facetious. I'm just not sure that finding a good general contractor is as amenable to a tech fix as getting a driver from point A to point B. Where the post lost me was implying that Uber for X was part of a logical progression and I'm not sure it is.

I'm not sure what's available today for things like local plumbers is any better than the Yellow Pages was 20 years ago. Especially once you get out of high density population centers.

And for a plumber I'd rather a) do it myself if I can, or b) ask family for a recommendation.

I see your point. Trust is a key issue, I think.

>Trust is a key issue, I think.

Yes. And that's also the business challenge with these listing services. Once you find that A+ plumber you'll just work with them off-list. (For cookie cutter jobs, I've been happy enough just using the Yellow Pages but for something more complex and ill-defined I'd rather have someone I know and trust.)

That was my biggest annoyance about the contractor I had for my last big job. I would have loved to have a new contractor person in my Rolodex but nope. Just too hard to deal with.

I don't know where to catchup but move off of CL. Build a network, use them to find more, it's slower but higher quality IMO

”If you’re a founder who is looking to take on the challenge of tackling more complex services and bringing them online, we’d love to hear from you.”

Hear from us how? Does this just mean “apply to YC”?

This sounds shitty, but if you have to ask, then you’re probably not the person they are looking for.

People with legit founder tenacity and skills will find a compelling way to be introduced to these folks — note that a16z is always looking for promising founders.

Yes, it does sound a bit shitty, but only because it seems to shame the founder rather than just point out that the venture capital business is run a certain way (including with each one advertising and buiding their own ecosystem and network and brand). Why do you think there is a constant culture of blaming of startup founders for not working 20 hour days or not having enough “hustle” skills or “tenacity” because they didn’t get through to a VC or land VC funding? In the 1960s-90s that was a bit like blaming musicians for not being discovered by the A&R department of the record labels. Only a few can make it that way, the rest today use Spotify / Patreon / YouTube etc. and are discovered and approached later.

I like A16Z a lot. But I am curious, what is your background, did you have the founder tenacity, do you know founders that had it, that easily got meetings with partners of VC firms? Do you think anyone could do it if they didn’t live in the Valley? To me, a compelling way to be introduced is to have your app already out and being used by everyone and making money. Before you approach a VC.

> 4. The Managed Marketplace Era (Mid-2010s)

In the context of VC investing (outsize returns, $1B valuation targets) this is such a joke, because these types of companies will never reach software-like margins. Their scale is almost entirely correlated to HR count, thus affecting DCF numbers.

That being said, these companies absolutely deserve a chance as heavily tech-enabled business services firms reduce a lot of undesired waste in their business processes...it's just not appealing from a VC perspective.

I think that at least OpenDoor and Atrium can scale at a VC trajectory. There are probably others that I don’t know about.

That said, I agree that a lot of the markets are addressable with tech or tech-enabled solutions, but not at VC valuation targets. I personally see these domains as well as possibly the startup financing world moving more towards a modest but still lucrative business model (e.g., something more like bootstrapping than VC financing).

P.S. You are a pro at getting downvotes simply for raising a slightly contrary opinion. Even when I disagree with you, I find your posts thought-provoking, so please don’t stop!

Unless this parallels a thesis that AI will in turn allow HR costs to scale sub-linearly as these companies grow...

Except no one's proven that to work yet. For the same level of investment dollars, you'd be better off buying a mom-and-pop service company and throwing the software in there.

“...while services make up 69% of national consumer spending...”

69% seems like a huge number considering that many people that I know can’t afford most services. What is the definition of a ‘service’? And, did he possibly mean all services, not just consumer services?

According to wikipedia: "Activities in the service sector include retail, banks, hotels, real estate, education, health, social work, computer services, recreation, media, communications, electricity, gas and water supply."

Retail, banking (loans), education, healthcare, energy, all very large portions of the average persons expenses.

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