These slides were originally presented at Tech Open Air Berlin 2013. The presentation is intended to help founders understand their marketplace. www.kinderfee.de

1. @daan_kinderfee
„Liquidity isn’t the most
important thing. It’s the only
thing. “
Simon Rothmann – Greylock Partners

2. @daan_kinderfee
About myself
• Mathematician
• Technical background
• Co-founder @ Kinderfee
• Worked in Investment Banking for 3 years
before founding Kinderfee
• Work at Kinderfee and as a startup mentor
To get in touch:
• @daan_kinderfee
• daanlo.tumblr.com
Daan

3. @daan_kinderfee
Liquidity disected

4. @daan_kinderfee
Liquidity disected – the exponential curve
Liquidity
Businessvolume
Frustrating
waste land
First handful of
transactions
Things start to
happen
BOOM!

5. @daan_kinderfee
Magic formula for estimating your market liquidity
N = total number of
potential needs
A = number of
different demand
offers
B = number of
different supply offers
(A * B)/
N2

6. @daan_kinderfee
Liquidity disected
No match

7. @daan_kinderfee
Liquidity disected
Demand Supply
One match

8. @daan_kinderfee
Liquidity disected
Many matches start happening
Demand Supply

9. @daan_kinderfee
Magic formula for estimating your market liquidity
N = total number of
potential needs
A = number of
different demand
offers
B = number of
different supply offers
(A * B)/
N2

10. @daan_kinderfee
Understanding YOUR marketplace

11. @daan_kinderfee
Where on the marketplace value chain are you?
Online
Classifieds
Auction / Reverse
Auction Marketplaces
Community
Marketplaces
Prevalent from 1990+ Prevalent from 2000+ Prevalent from 2010+
Much higher CLTV
Particularly good for
marketplaces that require
a large element of trust
Slightly higher CLTV
More trust & services
than online classifieds
Low CLTV
Monetisation either
through Ads or
Subscription
Known counterparty
Handling of payment
Transactional knowledge
Additional services
Transaction made on
platform
Enables user ratings
Searchable list of
available offers
Low trust & low
convenience

12. @daan_kinderfee
BCG – product life cycle matrix
Online
Classifieds
Auction / Reverse
Auction Marketplaces
Market share %
Growth%
Community
Marketplaces
Cash cows
Low investment requirements
High margins / cash flows
Slowing growth (imminent)
In early growth phase
Rising stars & questions
marks
Showing huge growth

13. @daan_kinderfee
Number of sides on your marketplace?
Hard to get liquid Impossible to get liquid
One-sided
marketplace
1.7-sided
marketplace
2-sided
marketplace
3-sided
marketplace
Easier to build Easier to defend

14. @daan_kinderfee
What type of geographical liquidity is required?
Hard to get liquid Impossible to get liquid
Location
independent
LocalPostal Global
Easier to build Easier to defend

15. @daan_kinderfee
What factor does time play?
Hard to get liquid Impossible to get liquid
Time
independent
12-24 hoursDays Real time
Easier to build Easier to defend
Typically
mobile first

16. @daan_kinderfee
10 second breather

17. @daan_kinderfee
Who is paying on your marketplace (and in what currency)?
Babysitter / SupplyParent / Demand

18. @daan_kinderfee
Who is paying on your marketplace (and in what currency)?
Host / SupplyGuest / Demand

19. @daan_kinderfee
Who is paying on your marketplace (and in what currency)?
Car owner / SupplyDriver / Demand

20. @daan_kinderfee
Who is paying on your marketplace (and in what currency)?
User

21. @daan_kinderfee
< <
In general...

22. @daan_kinderfee
< <
In general...
The side that is paying in trust is always harder to get liquid.

23. @daan_kinderfee
< <
In general...
The side that is paying in trust is always harder to get liquid.
Money is plentiful – trust isn‘t!

24. @daan_kinderfee
5 second breather

25. @daan_kinderfee

26. @daan_kinderfee
Typical transaction
USD 80 per night
4 nights = USD 320
15% fee = USD 48
Guest
Will do 1-3 trips per year
Host
Can host up to 365 days per year
Please note: this example is my estimate. The
data is entirely made up.
If this says
USD 2 you are in
trouble

27. @daan_kinderfee
11 tips for creating liquidity

28. @daan_kinderfee
Design your site to create an appearance of activity

29. @daan_kinderfee
Focus on the side that takes longer to delete their account
-> this is often the supply or content creating side

30. @daan_kinderfee
Provide one sided utility

31. @daan_kinderfee
Find aggregators for supply or demand
Think adjacent

32. @daan_kinderfee
Think BIG, but START small!
Hustle! – in exponential growth every seed customer counts

33. @daan_kinderfee
Make your community work for you

34. @daan_kinderfee
[Scrape online listings and auto publish]
I don‘t recommend this, because it will kill your community

35. @daan_kinderfee
Understand YOUR marketplace
Be resourceful

36. @daan_kinderfee
Focus! Control N!
(A * B)/N2

37. @daan_kinderfee
Curate curate curate
“Force“ matches manually – even if it won‘t scale

38. @daan_kinderfee
Iterate around your customer

39. @daan_kinderfee
Hang in there!!!

40. @daan_kinderfee
Thank you