🔀 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