Network Effects in Marketplace, Communities and Social Platforms

These days, we’re hyper-focused on marketplaces, communities and social platforms. We love these platforms for many reasons, but the primary one is the power of their network effects and how they create a high degree of defensibility for startups. What are network effects? “Network effects” is a frequently used term…
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How we determine valuations for marketplaces

I often get asked about how to determine the valuation for a marketplace startup that is starting to scale. So I’ll run through some basic math for how we value marketplaces at version one. The main multiple we like to use for marketplace businesses is GMV (Gross Merchandise Volume…the total…
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Marketplace KPI Dashboard

A few months ago, I wrote about the questions that we typically ask when evaluating a marketplace opportunity. Now, inspired by our friend Christoph Janz at Point Nine Capital who created a KPI dashboard for early-stage SaaS, we have put together a KPI template for marketplaces. We recognize that every…
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