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marketplace incentives optionality

Users you want the most need you the least

The best users in any two sided marketplace will already have a system that works for them.


When you are building the supply side of a marketplace, it is often tempting to optimise for the users who are easiest to acquire. The users with the fewest options. They convert faster, complain less, and are easier to retain.

But over time, that changes the shape of your product. Your supply becomes less attractive to the demand side, and the platform slowly enters a downward spiral.

Users with more options behave differently. They ask harder questions. They negotiate harder, are slower to commit and walk away faster when something feels off. Because they already have a system that works for them.

One of the early mistakes marketplaces make is optimising for quantity over ICP fit on the supply side.

If you are building a two-sided marketplace, do not optimise for who is easiest to acquire. Focus on your ICP instead. Shape your product and incentives in a way that makes it compelling for the right supply to participate.