Unit Economics Benchmarks for Two-Sided Marketplaces | From Idea to Exit
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- Опубліковано 2 жов 2024
- I show you how the unit economics of a two-sided marketplace startup should evolve over its lifecycle, using VC benchmarks based on the stage of the startup.
Watch the entire 3-part "unit economics journey" series:
➡️ Part 1: SaaS • Unit Economics Benchma...
➡️ Part 2: Marketplaces - you're watching it now!
➡️ Part 3: eComm • Unit Economics Benchma...
✅ Download the Excel template: bit.ly/mktplc_uniteconomics
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Related Videos:
🚩How to Correctly Calculate CAC for Marketplaces: • How to Calculate CAC f...
🚩How to Build the Ultimate Marketplace Financial Model: • The ULTIMATE Marketpla...
🚩Talent Marketplace Financial Model: • Creating a Financial M...
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In this finance case study, we learn about how the unit economics of two-sided marketplaces change over time and how to benchmark them over the startup lifecycle.
Sections:
0:19 video overview
1:19 definition of unit economics & expectations over startup lifecycle
3:28 marketplace metrics & definitions (GMV, take rate, hard side, supply vs. demand constrained, ltv)
7:16 two-sided marketplace finance case study, description of business
8:45 how to calculate fully-loaded CAC for marketplaces (including buyer & seller)
11:03 unit economics breakdown
12:04 ltv: cac benchmarks for two-sided marketplaces (1-year vs. 3-year)
15:15 how to use customer retention cohorts to understand buyer behavior
20:40 part 2 - overview of marketplace with bad ltv: cac metrics
24:09 comparison of marketplace with strong vs. weak metrics
If you have questions - leave a comment below and I'll try to help. Cheers!
#uniteconomics #marketplaces #startups
Questions? Let me know in the comments happy to discuss.
💡 Also, if you want to learn how to systematically scale your startup without ending up as one of the 90% of startups that fail, have a look at this ⇒ www.ericandrewsstartups.com/financeforstartups
Best video in UA-cam please don't stop these great contents
Thanks for watching, working on my next video right now 🚀
Great video. I was wondering when were going to make a video about three-sided marketplace like Uber Eats
Yes marketplace businesses are extremely interesting. I hadn't considered a 3-sided marketplace or super app...I will think about how I could build a model for that.
Did you see my two-sided marketplace financial model? ua-cam.com/video/Q9lnHGFrfd4/v-deo.html
@@eric_andrewsgreat video thx for sharing. Yes 3-sided marketplace is a potential scenario for us. Ex: Travel marketplace with buyer , travel creator ( influencer) and the brand ( hotels, experience providers, restaurants)
Amazing - Can you share the spreadsheet ? 💚
Can you do a case study on talent marketplace (e.g Fiver or Upwork)
Spreadsheet download in description and I literally just uploaded a talent marketplace financial model video a few weeks ago here ua-cam.com/video/QXQiqNS6fTg/v-deo.htmlsi=hgi7qs6U2QeX7WNB
@@eric_andrews haha thank you and sorry for these 2 useless questions
@@glhlacheuw102 haha no worries
Hi great video!! Just a simple question...For a new company with no historical data, how does one develop a retention cohort analysis?
You have to make a guess, just be conservative. Make sure total average lifetime orders for a buyer is in the 1-3 range for a marketplace would probably be a decent starting point
Thanks Eric! I wonder what’s the best way to know CAC per new user if I’m looking from outside in and don’t have that data from inside? For instance I’m looking at some public companies but they don’t disclose newly added users/buyers so hard to know what’s the unit CAC. Any good suggestions?
It would basically be impossible without the data, unfortunately.
Just as a very crude metric, you could look at marketing spend as % of revenue and gross margin minus marketing to get a sense of whether they are making any contribution margin on their customers after marketing, but the unit economics themselves will still be a mystery.
If you had any ability to jump in on an earnings call and specifically ask those questions that would be pretty interesting. I mostly work with startups so investors are always able to work with the company to get the unit economics.
@@eric_andrews Thank you for the quick response!
Thanks Eric, great content! 🚀
🙌
It's great🎉, please make more such deep understanding videos on eccomerce of Amazon and all
Next video in the series will be on eComm!
Love watching your videos! It helps so much in our day-to-day operations.
We're currently building "SaaS-enabled marketplaces", would be great to see how Unit economy/Financial model could look like for that type of business model.
So glad to hear it!
So speaking of your business would that be like a subscription membership plan that unlocks price benefits (like Amazon, Costco, etc) on your commerce marketplace? Or subscriptions for sellers to access the marketplace?
@@eric_andrews It more like subscription for buyers to access the marketplace.
Where:
- Sellers (software developers who create candidate profile on the marketplace, their profiles are listed)
- Buyers (the company that subscribe to our platrom on monthly basis to have access to sellers - software developers, and some recruitment features)
- Sellers (software developers) do not pay anything.
- Buyers (companies) have 3 varianties eg: Basic plan $499 | Premium $999 | Enterprise $1999
This model has marketplace logic, because in the same time we need to market and attract "Sellers and Buyers".
Hope that makes sens.
@@erykput Yes, it's a classic talent marketplace but with subscriptions for the employers (buyers) instead of a per-hire fee. I'm going to be releasing more marketplace videos soon (CAC, deeper retention & LTV, etc). Will keep you in mind as I make them so that they will make sense for your biz!
You are a fucking beast ! Many thanks for your great contents !
Thank you 😎
Thanks Eric. Very useful.
Thanks Sanjay for the video suggestion 🙌
Eric, you are amazing, I learned so much from your UA-cam channel, I'm a second-time founder and your channel is my recommendation to all founders whom I mentor,
I do have lots of questions though, How come you are so well-versed in all these markets and space, also is there anywhere you work as a Freelancer for writing financial models?
I no longer do consulting as I accepted a full-time role recently, but I worked with over 100 startups across all sectors as a freelancer over the last 3-4 years so I saw a lot of different situations + I'm just very interested in technology business models so I spend a lot of time learning about them. Anyway, that's how I learned this stuff.
@@eric_andrews Got it! very helpful and enjoyed it. By the way, I am looking to venture into the food industry, specifically beverages. I have watched some other channels, but I was wondering if you have any resources or content on creating a physical product financial model. You are doing an amazing job! Cheers!
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