Part 3 of Lenny Rachitsky’s series on marketplace growth is now available. This one is about how many startups scaled initial supply.
The overwhelming answer here is direct sales. Nothing beats going door to door, building a pipeline and running a process to execute it. A classic strategy that works across industries, and way more effective than any other.
One of the most significant learnings (and surprises) for me in doing this research was how important one-on-one direct sales was to most early marketplaces. Sales ended up being a crucial lever for about 60% of the companies I talked to — twice as common as the next biggest lever (piggy-backing and referrals).
The other mechanisms are all common marketing levers - referrals, piggybacking on another network (often craigslist), word of mouth (strong dynamics in supply side, eg. restauraunts), subsidizing, paid growth, using employees as early supply, building single player mode, flywheels, SEO, events, and community based marketing.