Marketplace businesses exist to connect two or more parties, typically the buyers and the sellers. Investors love these marketplace businesses because they tend to grow quickly and spawn winner-take-all companies. A long line of successful Silicon Valley startups have found success providing a place for people to connect and transact. Examples of these kinds of companies include industry titans like eBay and LinkedIn but also include some of today’s web darlings like Uber and AirBnB.

You can read the Nir and Far blog post on: Marketplaces & The Curse of the Network Effect https://www.nirandfar.com/the-curse-of-the-network-effect/

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