Marketplaces aim to address fragmented supply and demand by improving functions like discovery and trust, and should focus on building strong supply and demand, improving user experience, and ensuring sustainable economics through network effects.
Companies are capitalizing on trends in the food industry, with verticalization and virtual restaurants on the rise, while automation and technology are making labor more efficient; marketplaces are successful in creating seamless experiences for sourcing and delivering products, and verticalized marketplaces are emerging in various industries.
Marketplaces are enabling individuals to monetize their passions, with examples like OnlyFans and Hublot leveraging WhatsApp for online coaching, while SAS enabled marketplaces have the potential to become transactional platforms; there is also a growing trend of Shopify verticals for different segments, as seen with the success of FJ Labs in Latin America.
Marketplaces are evolving with unique disruptions in different regions, reducing logistics costs, embracing live stream shopping, exploring crypto and blockchain, and utilizing tokens to incentivize customers in the future.
Entrepreneurs who solve personal problems and use geographic arbitrage can find success in the marketplace, with opportunities in emerging markets like Europe, India, and China, and the importance of considering different business models and verticalization for growth.
We prioritize high-growth potential businesses with a verticalization of marketplace managed marketplaces, investing in only 3% of evaluated companies based on growth, capital efficiency, and price paid for traction, while understanding the correlation between gross margin, business growth, and multiples is important for evaluating marketplace businesses.
Despite challenging market conditions, it is a good time to invest and build great companies, focusing on profitability and raising capital to sustain themselves amidst economic cycles, with technology creating opportunities in marketplaces and the future looking optimistic.
Horizontal and vertical marketplaces can be successful depending on the existing market structure, with horizontal marketplaces initially offering more potential in smaller markets, and marketplaces can bring significant benefits to people's lives by improving information processing through AI; FJ Labs invests in companies and sells some of their stake in secondaries to accommodate founders and prioritize selling companies that won't grow into their valuation within 18 to 24 months, but they also adapt to different realities and seek out opportunities.
This article is a summary of a YouTube video "Jose Marin (FJ Labs): Marketplaces - What the Future holds" by Marketplace Conference