Before You Scale, Listen
Before I advised anyone on marketplace strategy, I spent years living inside one. As a General Manager running an $2B ridesharing business across the Midwest, my job wasn't just to watch dashboards. It was to sit in rooms with drivers and listen, sometimes for hours at a time, to what was actually going on in their day.
Here's what I learned, and it surprised me at first: drivers didn't just want higher earnings. What they asked for, over and over, was transparency, an app that was genuinely easy to use, and a handful of features nobody on the product team had thought to prioritize. Riders were the same story from the other side. They didn't optimize purely for price either. What actually drove their loyalty was speed, driver ratings, and consistency, knowing a ride would feel the same way every time, not a roll of the dice.
Neither side was behaving the way a simple supply-and-demand model would predict. And that's the real lesson: listening to both sides of your marketplace is what makes it liquid (efficient) in the first place. You can't design your way to density from a spreadsheet. You have to hear it from the transacting on users our platform.
That principle hasn't changed since. It's the same lens I bring to every two-sided marketplace I advise today, regardless of what's actually being matched on either side. A few of the lessons that hold up across almost every marketplace I've worked with since:
1. Treat your first market like a lab, not a launch
Before scaling broadly, treat your first market as a laboratory, not a proof point to rush past. What density of supply is actually required before the economics start working? What level of consumer usage makes the unit economics real? What incentives are genuinely necessary to bring supply on board, and which ones are you offering just because it's easy (remember, the right incentive isn't always monetary)? And critically: what usage or return behavior tells you the network is becoming useful, not just bigger?
Most founders want to answer these questions once, in theory, and then scale. The marketplaces that actually work answer them empirically, in one contained market, before they touch a second one.
The great news: once you’ve learned the first one, launching numbers 2-10 will become much easier.
2. Guard your economics before you trade them away
Be careful about giving away too much of your economics too early. Incentives on either side of the marketplace can genuinely help, but make sure they're actually necessary before you commit to them long-term. A distribution partner can accelerate your reach, and that's real and valuable, but I'd want the market-level playbook nailed first before committing to a large, ongoing revenue share.
If you're tempted to move fast on a distribution deal before that playbook is proven, tell the partner exactly that: you're building a better model first so the eventual deal is a genuine win-win. A bad economic structure signed too early is much harder to walk back.
3. Some relationships you can't afford to outsource
Every marketplace has multiple sides to keep healthy, supply, demand, and often larger partners layered on top. Be cautious about letting any single side, or a distributor, own the relationships that matter most to your long-term position. A major partner relationship, for example, can become one of the most durable pieces of your competitive advantage, but only if you hold onto it directly instead of letting it get absorbed by an intermediary.
Beyond that, there are some relationships you may not have anticipated needing. In ridesharing, regulators were considered a ‘thorn’ in the side of growth. On the other hand, partnering directly with local cities and governments enabled positive relationships with local economies and accelerated growth and user experiences. Consider when you can afford to go slowly to go faster in the long term.
4. The real unit of scale isn't what you think
The question underneath all of this: what is the real unit of scale in your business? For most marketplaces, it isn't the number of units sold, signups collected, or listings posted. It's a dense, economically healthy local market that can be replicated. Everything else, distribution deals, feature roadmaps, incentive structures, should be built in service of proving and repeating that one thing.
Most founders I work with already have strong intuition for what makes their first market work. What's usually missing is codifying that intuition into something measurable, then building the analytics underneath it that tell you, with evidence rather than instinct, when a market has reached sufficient density and is genuinely ready to replicate.
Erin Guthrie is the founder of Greenwood Point Strategy, where she advises marketplace founders and operators on growth strategy and go-to-market, drawing on her experience as an operator who owned a $2B P&L building marketplace density across 11 Midwest markets at Uber.