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How the 100 largest marketplaces solved the chicken and egg problem
Great article. Analyzes marketplace companies for the strategies for solving the chicken-and-egg problem. The so-called "Single Player Mode" was the winning strategy in terms of revenue and capital efficiency. In this strategy the supply-side (usually) is provide a product that works just for them. Over time, that aggregates suppliers. Then, you bring in the demand-side.
marketplaces  liquidity  chickenandegg  singleplayermode 
august 2018 by drmeme
Paving The Way To Marketplace Liquidity
Podcast with the following Q/A

Q: The Chicken and Egg Problem.
A: Usually supply-side first. Alternatively create a product for the supply-side to use and then bring in the demand-side. Also called Single Player Mode.

Q: Horizontal vs. Vertical Marketplaces.
A: Either. Preference for vertical. Horizontals eventually become vertical.

Q: From Online to Offline.
A: There are synergies. Especially branding.

Q: Are Marketplaces Winner Take All?.
A: Yes. Mostly. First to scale.

Q: Can Craigslist Be Beat?
A: Maybe.
marketplaces  liquidity  evolution  scaling 
august 2018 by drmeme
Liquidity hacking: How to build a two-sided marketplace
1. Provide value to one side.
1a. Offer portfolios.
1b. Build community.
1c. Offer tools

2. Find aggregators.
2a. Find physical aggregators (universities, workplaces).
2b. Find an enterprise client.
2c. Find supply aggregators.
2d. Scrape listings.

3. Narrow the problem.
3a. Focus on geography..
3b. Focus on niche community.
3c. Focus on a vertical.

4. Curate one side.

5. Use "hamsters" (i.e., manual work) to get to scale. Then automate.
marketplaces  liquidity  supply  demand  bootstrap 
august 2018 by drmeme
current order book, and has been similar throughout the last couple of days; improving every…
liquidity  from twitter_favs
august 2018 by kartik
Passive investing is storing up trouble
August 2, 2018 | Financial Times | by Megan Greene.

I was recently informed by the owner of an artificial intelligence fund that markets do not listen to economists any more. .....A fundamental shift in market structure towards rules-based, passive investing over the past decade means a lot of trading is no longer based on fundamentals. But just because some markets do not pay attention to economists, it does not mean economists should not pay attention to these markets........AI quant funds are not waiting on tenterhooks for analysis of every non-farm payrolls report, Fed press conference, Donald Trump tweet, or earnings report. Instead, they look for trading strategies that are succeeding and adopt those strategies until a better one comes along, regardless of the underlying fundamentals. But what happens when the strategy suddenly becomes to sell everything? Will the computers find the buyers they need?.......ETFs, often set up to mimic an index, have to buy more of equities rising in price, sending those stock prices even higher. ETFs similarly ignore fundamentals.....This creates a piling-on effect as funds buy more of these increasingly expensive stocks and less of the cheaper ones in their indices...Risks of a bubble arise when there is no regard for underlying fundamentals or price. It is reasonable to assume a sustained market correction would lead to stocks that were disproportionately bought because of ETFs and index funds being disproportionately sold.

But again, in a crisis will the ETF managers find liquid markets? ....Passive investors and quant funds could also threaten the economy by making markets vastly more complex, noisy and opaque. They send mixed signals to active investors about what the fair value of a stock is. That could cause a significant misallocation of capital.

The danger is exacerbated by the speed at which trading is now done. The average holding period for a security on the New York Stock Exchange has fallen from two months in 2008 to just under 20 seconds today.......Systemic failures, misallocation of capital and dried up liquidity could cause a bear market, dragging on growth when the economic backdrop is already lacklustre......So even though passive investors ignore economists, economists should pay attention to risks posed by the shift in market structure they represent....This is not to say that index funds, ETFs and AI quant funds are necessarily bad. But the real test will come when there is a sudden crisis followed by a sustained bear market.
active_investing  artificial_intelligence  bear_markets  economists  ETFs  index_funds  investing  liquidity  market_fundamentals  misallocations  passive_investing  piling_on  risks  systemic_failures  rules-based  bubbles  quantitative 
august 2018 by jerryking
Initial coin offerings: Disclosure tends to mean better outcomes for ICOs — Quartz
Disclosure alone doesn't mean squat if your contracts are unenforceable.
Much like brazen, easily disprovable bald-faced lies go unpunished, what good is the transparency of knowing they are falsehoods if they are traded at the same value as earnest capital?
capital  lolbuttcoin  blockchain  economics  metrics  transparency  liquidity 
july 2018 by po
Why We Shouldn’t ”Tokenize the World”
“Liquidity is a coward, it only exists when you don’t need it.” — Keynes

Why illiquidity (as in private equity investments locked up for 10 years) can be helpful. It discourages (prohibits?) short-term trading, provides a long-term perspective, and allows the illiquidity to be adequately compensated.
liquidity  illiquidity  tokenization  tokens  privateequity 
june 2018 by drmeme
Decentralized Exchanges, Off-Chain Atomic Swaps, And A Brief Look Into The Future
DEX or ERC20 and Lightning Network? What does a cryptocurrency exchange future look like?
decentralized  cryptocurrencies  exchange  atomic  swap  liquidity 
may 2018 by orlin

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