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Recent Posts
Entrepreneurship
This week everyone has been talking about Zirtual – the on-demand virtual assistant company that collapsed on Sunday night, suddenly laying off more than 400 employees (the company now is going to be acquired by Startups.co). Zirtual CEO Maren Kate Donovan blamed the collapse partly on an outsourced CFO firm and numbers that failed to […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
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 and it is sometimes confused […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
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 volume of goods sold on […]
Data / AI / ML, Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
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 marketplace is different, but each […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
As a marketplace figures out how to bring buyers and sellers together and builds liquidity, the virtuous cycle starts kicking in. The growth of sellers and buyers quickly accelerates. The ultimate goal is that a successful startup grows into a big company. But as you begin to scale, there are new considerations and strategies to […]
Entrepreneurship
It’s widely accepted that SaaS has permanently changed software sales. Enterprise software sales once meant a large “boots on the ground” field sales team who knew how to wine and dine the right individuals and stakeholders. With the emergence of SaaS, the sales process became more transactional and less about relationships. With software products at […]
Portfolio
Last October, we made our first investment out of Fund II and are excited to announce this news today as the company launches publicly out of beta. Volley is a friendly place for helping others solve problems online. Volley members can post requests in response to the question, “What are you looking for?” You can sift through […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
The virtuous cycle is the holy grail for online marketplaces. In this positive feedback loop, a high number of quality suppliers attract more customers; then more customers attract more suppliers to join. This cycle continues as a self-sustaining growth engine until both supply and demand reach critical mass to be “winner takes all.” But how […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
Clayton Christensen has written the book on disruption. He’s one of Silicon Valley’s most popular business school professors and we often subscribe to his theory on disruption from below. With his theory “Disruptive Innovation,” Christensen states that “a product or service takes root initially in simple applications at the bottom of a market and then relentlessly […]
Portfolio
With more and more messaging platforms emerging, members within groups and communities are more likely to communicate across multiple platforms (SMS/iMessage, Whatsapp, WeChat, Facebook messenger, etc.), and therefore, in a less consistent and disparate manner. As a result, we feel there is a great opportunity for startups to provide a better, more targeted experience for […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
The earliest days in a marketplace are a tricky time. As I’ve discussed before, there’s a chicken and egg problem when it comes to supply and demand: customers need supply, and suppliers need customers. But it’s nearly impossible to ramp up supply and demand in lock step. We’ve found that in most cases it’s best […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
I recently came across a good story about pivoting and how hard it can be to find the right monetization model for your marketplace. Thumbtack is a platform that helps people find service professionals (photographers, painters, home contractors, movers, etc.). My friend (and Thumbtack CEO) Marco Zappacosta described how the company first tried transaction fees, then a […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
The success of Uber has inspired hundreds of startups to call themselves the “Uber of X, Y, or Z.” There are now apps to order groceries, have you car washed, get legal counsel, and much more. Uber is part of a broad category of on-demand mobile services. Thanks to smartphones and cloud computing, it’s easier than […]
Data / AI / ML, Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
At Version One, we love marketplaces and platforms. Over 50% of our portfolio companies fall into this category including our recent investments in Headout (a mobile-first marketplace for last-minute travel experiences) and VarageSale (a mobile-first community-driven Craigslist). We’re often asked what we look for in a marketplace. While there are many factors to consider (Bill […]
Portfolio
We’re thrilled to announce our newest investment: Headout, an on-demand mobile concierge that helps travellers discover and book last-minute activities during vacations at great prices. Headout makes discovering new cities easy and spontaneous. As frequent travelers, we have been watching this space for a while, but most players took a web-first, mobile-second approach. Web-first doesn’t […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
One of the more interesting developments over the past few years is the emergence of managed marketplaces. The term means different things to different people, but I consider it a marketplace that not only connects buyers and sellers, but takes on additional parts of the value chain to deliver a better overall experience. For example, […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
Last week, my post on “Marketplace dynamics: buyer mindshare is key to building a moat” generated good discussion about the best strategies to disrupt existing marketplaces and get past the incumbent’s moat. It’s certainly an important topic to any founder or entrepreneur looking to break into an existing market. The discussion was sparked by Jonas’ […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
Most marketplaces start off by providing a unique supply of products/services. Demand follows supply, and so the flywheel of supply and demand begins. However, as a marketplace gains popularity, its supply inevitably becomes less and less unique. I know this firsthand. At AbeBooks, our booksellers initially listed only with us, but then started to list […]
Portfolio
Online marketplaces have made it easier than ever for people to buy and sell things. But the human element has been missing with the anonymity of Craigslist and eBay. That’s why I’m happy to announce an investment we did two years ago when we participated in the seed round of VarageSale. At the time, they chose […]
Entrepreneurship, Marketplaces / Social / Collaboration / Network Effects
The Freemium Model, where a vendor offers both a free and paid version of the product, has become the de facto business model for many SaaS companies. Freemium makes general usage free, while monetizing the heaviest users through premium features. This model has proven to work well for consumer apps like Spotify as well as […]