How To Build a Successful Expert Two-Sided Marketplace Startup

6 min readMay 18, 2020

For two-sided marketplaces to succeed, the platform has to add value to both sides — the customer and the vendor. This is especially critical for Expert Two-Sided Marketplaces (E2SMs).

An E2SM is a platform that matches customers with quality vendors for services that require at least a little expertise — from mechanics to tutors to attorneys, and almost everything in between. The marketplace is designed to take the complexity and the overhead out of transacting these expert services. In theory.

In practice, a lot of E2SMs wither and fail for three reasons.

The first is that the service is too niche to generate enough demand for an expert marketplace to exist.

The second is that the supply is too thin to serve the market, which leads to a glut of “bogus” experts.

The third, and the most damning, is that the platform is of little value to either the customer or the vendor.

The Value Proposition of a Two-Sided Marketplace

Let’s look at how a traditional two-sided service marketplace like Uber adds value. Uber signs up both customers and vendors to its platform, and then fills customer demand with vendor supply.

The value proposition for the customer is that they receive a high percentage of the value of the service for low percentage of the cost. The value proposition for the vendor is the ability make money working independently.

The Uber platform is able to add value to both sides by removing overhead from the existing process, introducing efficiencies using technology, and delivering the service in a novel way, sometimes sidestepping industry standards to get there.

Most traditional 2SMs are built for low-experience services, so that any random vendor can serve any random customer. There isn’t much matching of the two sides — usually it’s just limited to customer location and maybe the size of the Uber vehicle.