In two-sided marketplace businesses, is supply or demand the more binding constraint on growth?

Doug Leone · Sep 14, 2021 · hedged

Airbnb's open question is supply, not demand, because the hotel industry is dying and younger travellers go to Airbnb first

It is a global two-sided marketplace with all trends in its favour; if it can secure enough supply it is a company to tuck under your pillow for five years

Scope: Doug says he does not know the numbers and is not commenting on this or next quarter; he has never stayed in an Airbnb himself

37:03 20VC: Sequoia's Doug Leone on What Has Been Instrumental To Scaling Sequoia Over Generations, How Sequoia Think About International Expansion and What They Learned From China and India & Why When You Lose Pre-Seed You Become Private Equity

Jeff Jordan · Jan 16, 2023

Most marketplaces, even successful ones, are permanently supply constrained, and in many you must solve supply first because demand is uninterested without it

Supply is the hard side of the marketplace; even Airbnb is always looking for new supply to improve the user experience

11:15 20VC: a16z's Jeff Jordan on The Ultimate Guide to Investing in Marketplaces, Two Core Features to Look for in All Marketplace Investments, Why Fragmented Supply is so Important & Lessons from Airbnb, Pinterest and Instacart on What Makes the Best Cohorts

Markus Villig · Nov 13, 2024

For Bolt, consumer demand has never been the constraint; supply has been the binding constraint for eleven years

Consumer demand was overwhelming from day one, so every internal all-hands for eleven years ends on one slide: add supply

Scope: now extends to couriers and restaurants, not just drivers

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Jeff Jordan · Jan 16, 2023 · hedged

The demand side is the more strategic side of a marketplace

Suppliers go wherever the demand is; a host with 60% occupancy keeps using Airbnb while one getting two bookings a year churns, so healthy demand produces a healthy marketplace

33:18 Demand side is the more strategic side since supply follows healthy demand