Part 4 of Lenny Rachitsky’s series on marketplace growth is now available. This one is about how many startups scaled initial demand.
Again, there was a clear winner here - word of mouth. This drove initial demand for Airbnb, Lyft, Opentable and many others. I suspect it was the novelty nature of this new supply that suddently became abundant. When it was easy to rent a place, it was a great conversation starter and naturally created a place to
Supply driving demand was also listed as an important factor:
The second most common growth lever (effective for over 40% of marketplaces, and also a big surprise to me) was the marketplaces’ supply directly driving its demand. This is the primary reason these companies focus almost exclusively on supply growth — the supply created the demand.
More details in the post.