What Are Market Networks? Share: Codica Date Published 15 April 2020 Categories Blog Reading Time 4-Minute Read The term “market network” belongs to James Currier, and it’s defined as a new type of platform that combines features of marketplaces and socials. Such platforms remind socials since they allow professionals to create a profile to showcase their works and build relations with people having the same interests. At the same time, market networks offer a specific medium for customers to find the right service providers and make a transaction. That makes them close to online marketplaces. The Anatomy of a Great Market Network All market networks are similar in structure. All of them have specific components that help them stand out from standard marketplaces like Amazon or eBay. So what are they? SaaS platform; A vast professional network; Key elements of both socials (profiles, communication channels for interacting with people within the same ecosystem) and online marketplaces (transactions between service providers and consumers); Reduced transaction fees; Transparent working and communication processes; Simple legal contracts. Now let’s have a look at the most recognizable market networks that succeeded in getting the upper hand in their corresponding domains. AngelList AngelList is a website that connects investors and individuals looking for a job at innovative companies with startups that require financial aid and new hires. In 2018, the company could boast of great achievements. In their AngelList Year in Review, 2018, they stated that the organization reached over $1 billion in assets under management. Besides, more than 20,000 breakthrough products were launched with their help. Houzz It is another example of a successful market network. Houzz enables people who are remodeling their house to interact with builders, plumbers, electricians, and other service providers. CNBC included Houzz has been included in their 2019 CNBC Disruptors 50 companies. The Key Attributes of Market Networks Focus on Complex Services Market networks place a priority on complicated projects rather than simple buy-sell transactions. By complex projects, we mean activities like redesign or event planning that require active engagement and a long partnership. Importance of Each Client and Contractor Identity has the utmost importance on market networks. In some cases, it can bring the platform’s owner an additional profit. For example, parents will pay a premium for a babysitter on Trusted more willingly, if they were satisfied with the services of a particular specialist in the past. Close Cooperation Between a Professional and a Client Active collaboration between contractors and clients is another distinctive feature of market networks. The projects on these platforms usually take pretty long to complete. Therefore, it takes more time for both sides to sort out all the details. Free Flow of Referrals It is highly unlikely that you will entrust your corporate party to the first specialist you have found. You will need lots of recommendations from friends and relatives to get the right event planner. In the context of the market network business, positive feedback from happy customers can bring you a free flow of referrals and thus, allow you to lower acquisition costs. Increase of Transaction Speed and Customer Satisfaction Market networks offer both professionals and clients the software required for proper collaboration. As a result, both parties are satisfied with the improved transaction velocity. The given tools are also good for streamlining payment operations and making the work processes efficient. Final Thoughts As you can see, market networks have enough potential to disrupt the service marketplaces. At the end of the day, they influence greatly the way how service providers do their job and earn a living. For more information about market networks, take a loot at our recent blog article: Market networks: the future of service marketplaces?