As a marketplace, I believe that a great customer experience is primarily defined by our ability to offer our customers access to the widest range of services at the right time and the right price. To create this experience, we need to generate a high degree of marketplace liquidity.
Liquidity = lots of active buyers, lots of active sellers, lots of service offerings
We also want our Taskers to provide the best possible service to our customers by being reliable, offering fair prices and doing a good job through our marketplace.
Since an ecosystem with a high degree of liquidity will start out with some degree of entropy, to align everyone (Taskers, Posters and Airtasker) to a common goal (more completed tasks) we also need to provide marketplace structure.
Structure = user interfaces, marketplace rules, fees, moderation, quality checks etc
The tricky thing here is that there is usually a direct trade-off between marketplace liquidity and structure — the more structure we add, the less liquidity we can create.
For example:
- If we promote a user interface specifically designed for domestic cleaning, we are adding extra friction for the customer to buy office cleaning.
- If we vet Taskers to allow only highly experienced cleaners to join the Airtasker community, we are excluding people who are new to the industry.
- If we invest time into upfront research and development, we get less time in-market to onboard more customers.
I’ve noticed that it can be a natural inclination to keep adding structure because it’s easy to define the benefit of more structure, but it’s hard to measure the cost of losing liquidity. For example, if we defined the services that people could use Airtasker for, then we know that we can create a more tailored user experience for those use cases — but we don’t know what use cases we would be excluding.
So to provide a great customer experience, it’s important that we prioritise liquidity and carefully consider adding any structure that compromises the range of services that people can buy, the range of available prices and availability and our speed to market.
Opening the floodgates
It’s worthwhile acknowledging that opening the floodgates and giving people freedom to use our platform in an open “liquidity first” way means that there is risk that things won’t always go according to plan. For example people may leak off our platform, use Airtasker to post questionable content or cause damage whilst completing a task.
These are risks which I believe it is important that we embrace. Every company faces risk and the way that we gain a competitive edge is by embracing important risks and addressing them in the smartest possible way. There are no points for avoiding risk altogether!
In embracing the risk of opening the floodgates, I believe that:
- Controls are more expensive and less effective than we may intuitively assume. Adding more vetting and checking processes doesn’t have a big incremental improvement on quality since most people want to do the right thing, and people who want to do the wrong thing know how to get around the system.
- The opportunity created by openness is bigger than we may intuitively assume. It’s really hard to estimate the potential of new market opportunities because they haven’t yet been defined and we can’t quite put our finger on it. In the local service economy, I believe this opportunity is absolutely massive.
- People are better than we may intuitively assume. The vast majority of people have good intentions and they want to do the right thing by others — so if we create an open platform, the vast majority of people will use it in the right way.
On this basis, it’s easy to overestimate the downside of opening the floodgates and we actually have much less to fear than we may intuitively assume.
At the same time, what we should fear is that nothing happens — that we preempt problems and put in place structure that compromises liquidity or that we are slow to market and another platform absorbs all of the liquidity.
Balancing these risks, I believe it’s important to:
- Trust first, open the floodgates and give ourselves the best opportunity to create great marketplace liquidity
- Install safety nets so that we can address extreme downsides (eg. insurance, manual content curation)
- Have a fairly high tolerance for bumps in the road like crappy content, miscommunicados or fee leakage
- Identify the specific bumps (or opportunities) quickly so that we can prioritise the order in which we address them
