🔀 Illiquid marketplaces
This week in The Pivot: always facilitate real transactions before you build anything. Marketplaces don't create new value—they add efficiency.
Hey friends 👋
Every Monday in The Pivot, we share one anti-pattern we’re seeing from founders in the Traction Lab ecosystem, and the quick redirect that makes all the difference—in just 250 words.
Here’s this week’s:
The anti-pattern: Building two-sided marketplaces blindly.
They interview one side of the market, get excited about the problem, and immediately jump to building profiles, payment systems, review mechanisms—a turkey dinner with all the fixins.
But they’re front-loading all the risk into “can we build it?” instead of “will these two groups actually transact with each other on our platform?” Worse, they often only validate one side while completely ignoring whether the other side even wants what they’re offering.
Yikes.
The fix: Facilitate real transactions before building anything.
That’s it. It’s that simple.
Find 3 supplies and 3 buyers who want to transact together, and manually connect them via email or text or whatever makes sense. Charge the buyer, pay the supplier, take your cut.
If you can’t make this work with a manual concierge service, adding software won’t magically fix it. All a platform can do is make transactions poeople already want more efficient.
The platform isn’t the value—the liquidity is. Once you’ve proven people will transact, THEN you can build the software to make it more efficient.
Never gamble an MVP on whether both sides even want each other.
The tool: The Concierge MVP.
Before building your platform, manually facilitate 5-10 transactions between both sides of your market. Use email, Slack, spreadsheets—whatever works. If you can’t make it work as a human concierge, you can’t make it work as software.
So test the value in days, instead of months.
Until next week,
—jdm
Sharp take on marketplace validation. The concierge MVP approach cuts through so much noise because most founders confuse building infrastructure with proving demand. I ran into this exact trap early on where we had all the tech but zero liquidity, and manually brokering those first deals revealed friction points no amount of user research could surface. The part about "all a platform can do is make transactions people already want more efficent" is key since software doesn't create desire, just reduces friction. Been using a similar approach for new verticals and saves months of wasted dev time.
Great advice! It totally makes since that the concierge MVP approach is a game-changer for two-sided marketplaces. So many founders get seduced by the shiny platform and forget that the core risk isn’t “can we build it,” but “will both sides actually transact?”
You are right that manually facilitating those first 5-10 deals forces you to confront the real friction (or lack of demand) early, and it proves liquidity before you invest in code. I would imagine too many beautifully built marketplaces sit empty because this step was skipped.
Love the reminder: the platform just scales what already works—the value is in the connections, not the features. Thanks for the clear, actionable redirect!
Great insight and content. Thanks