The a16z Marketplace 100 recently ranked consumer-facing marketplace startups, shedding light on various successful marketplace models. While many aim for a hybrid of high frequency, retention, and transaction values, the report identifies four segments of marketplaces: Holy Grails, Everyday Necessities, Occasional Splurges, and Fits and Starts.

Holy Grails, exemplified by companies like Instacart and Faire, have users making multiple monthly transactions with substantial spending. Everyday Necessities, such as Zum and Wag, are frequently used for everyday tasks with transaction values below $100. Occasional Splurges, like Airbnb and Kaiyo, have high-value transactions but lower frequency due to their cost. The majority, represented by over 75% of the Marketplace 100, fall under Fits and Starts, characterized by low-cost and relatively infrequent use.

Despite being infrequently used and low-cost, Fits and Starts companies present an opportunity. These companies often have large market sizes, effective user acquisition loops, and healthy take rates. While high-value, high-frequency marketplaces are typically fetishized, the diversity in the Marketplace 100 suggests success across all segments. A quarter of the companies are Everyday Necessities, a quarter are Occasional Splurges, and the rest fall under Fits and Starts.

Building a marketplace in one category versus another requires distinct considerations. Low-priced inventory marketplaces need a focus on efficiency, retention, and user engagement. Low-frequency marketplaces should prioritize building significant value into the platform to counter competition and disintermediation risks. Understanding the marketplace model is crucial for making strategic decisions related to hiring, feature prioritization, and overall company culture.