Introduction
Georgia Stevenson, an investor at Index Ventures, developed an interest in marketplaces early in her career. Having started her career at Deliveroo, Georgia has a unique perspective on marketplaces and their potential.
Falling in love with marketplaces
Georgia Stevenson fell in love with marketplaces during her time at Deliveroo. She had to write an essay at university about any business in any category doing anything interesting. Due to her love for food delivery, she chose Deliveroo. While studying the business, Georgia came to appreciate just how beautiful marketplaces are. She was particularly drawn to the fact that there’s no inventory, there’s huge synergistic value when you look at all stakeholders within the marketplace, and there’s just this amazing kind of goodwill and latitude when it comes to the demand side.
Marketplaces are inherently global businesses
Marketplaces are inherently global businesses. They connect buyers and sellers from all over the world, allowing them to transact with each other in a seamless and efficient way. So, as a global fund with a presence in multiple geographies, Index Ventures has a unique perspective on the global marketplace landscape.
Building our thesis in the marketplace space
Index Ventures has a strong thesis around the potential of marketplaces as a category. They believe marketplaces have the potential to disrupt a wide range of industries and create tremendous value for both buyers and sellers.
Key factors that influence the thinking
There were three key factors that influenced the thinking of Index Ventures:
Early marketplace pioneers like eBay and Amazon
The success of early marketplace pioneers like eBay and Amazon demonstrated the power of the marketplace model. These companies showed that it was possible to create a platform that could connect millions of buyers and sellers around the world.
The rise of the sharing economy
The rise of the sharing economy represented a new frontier in the marketplace space. Companies like Airbnb and Uber showed that marketplaces could be used to connect individuals with underutilized assets (such as spare bedrooms or cars) to those who needed them. This opened up new opportunities for innovation.
The global reach of marketplaces
Finally, the global reach of marketplaces impressed Index Ventures. In an increasingly connected world, marketplaces have the potential to connect buyers and sellers from all over the world, creating a truly global economy. This represents a huge opportunity for growth and innovation.
What Index Ventures looks for when evaluating a marketplace
Index Ventures focuses on a few core buckets when evaluating a marketplace as a potential investment opportunity:
The strength of the network effects
The first thing that Index Ventures looks for is the strength of the network effects. As we saw with the example of the delivery rider whizzing past, network effects can be incredibly powerful in the marketplace space. When a marketplace has strong network effects, it becomes more valuable as more people use it.
The size of the addressable market
The second thing that Index Ventures looks for is the size of the addressable market. The market for the product or service being offered by the marketplace should be large enough to support a significant business.
The quality of the user experience
The quality of the user experience is also important to Index Ventures. A marketplace should be easy to use and provide a seamless experience for both buyers and sellers.
The strength of the team
Finally, Index Ventures looks at the strength of the team behind the marketplace. A strong team with experience in the industry and a track record of success is more likely to be able to build a successful marketplace.
Conclusion
In conclusion, Georgia Stevenson, an investor at Index Ventures, is a strong believer in the potential of marketplaces to disrupt industries and create value for both buyers and sellers. Her experiences at Deliveroo and observations of successful marketplace pioneers have shaped her thinking and led her to focus on network effects, global reach, and user-centric value propositions when evaluating potential investments. With marketplaces becoming increasingly important in our global economy, it’s important for investors and entrepreneurs alike to understand their potential and how to create successful marketplace businesses.
