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Start With a Clear Vision, But Tie It to Outcomes

Every great marketplace begins with an ambitious goal—disrupt an industry, simplify access, connect fragmented supply and demand. But unless that goal is anchored in measurable outcomes, it’s just a dream.

Ask yourself:

  • What does success look like in 12, 24, or 36 months?

  • How will we know we’re winning?

Tie your vision to key performance indicators (KPIs) like:

  • Gross Merchandise Volume (GMV)

  • Customer acquisition cost (CAC)

  • Lifetime value (LTV)

  • Take rate

  • Liquidity (e.g. time to match buyer/seller)

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Focus on the Marketplace Flywheel

Success in marketplaces is not linear—it’s circular. One part feeds the next. This is often called the marketplace flywheel.

Here’s a simplified version:

  1. More supply attracts more demand

  2. More demand improves supply conversion

  3. Better conversion increases transactions

  4. More transactions improve retention and margins

  5. Which attracts better supply

Each part of this cycle has measurable touchpoints. Map them out and define goals at each stage.

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Pick the Right Metrics for Your Stage

Early-stage marketplaces should obsess over:

  • Liquidity (are buyers and sellers finding each other?)

  • Time to match

  • Repeat usage (early signal of retention)

Later-stage marketplaces might focus on:

  • CAC to LTV ratio

  • Contribution margin

  • Expansion revenue or upsells

Avoid “vanity metrics” like total signups or downloads unless they correlate to core business goals.

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