Too much personalization is dangerous in a marketplace

When making 100, 000 foot statements, it's useful to group a number of related things. As you start to narrow down your focus, it's necessary to break apart those same groups. For example, Europe or USA is a helpful broad construct but to have good discussions about policies in those parts of the world, you need to start talking about specific countries, states and perhaps even smaller geographical areas.

Similarly, when talking about marketplaces, we need to consider different cuts of companies that fall under this banner to understand their product principles. Last time, I proposed the on-demand v. planned model to define a mobile strategy. This time, I want to explore the idea of personalized v. commoditized marketplaces as it relates to request flows.

I'm defining a commoditized marketplace as one where the service being offered is considered the same regardless of the specific provider. While there may be different product lines to choose from, the consumer is agnostic to the person who ultimately provides the service. In contrast, a personalized marketplace is one where the consumer wants to select the specific person(s) who provide the service.

Why does this matter? When defining a request conversion flow, this division informs the product principles. In a commoditized case, we need input from a user and then the algorithm does all the work to optimize for speed, i.e. getting the service to the user as fast as possible. In a personalized case, speed is still important but we want to optimize for individual choice. Ultimately, the goal is always to get conversion to a request so we never want people stuck in analysis paralysis. 

When the service is commoditized, there is a minimal amount of information required both from the user and for the user. As such, product flows here generally want to optimize for one screen and only the required information for the algorithm to process it. Then, when the request is completed and the information is relayed back, the information is again minimal - only what the user needs to take advantage of the service.

In a personalized service, there's generally more information that the user needs to see to select the appropriate provider. Product flows here will want to enable the right hierarchy of information. In selecting a provider, the ease of reading, summarized information and the option to delve deeper as needed will help to get the user to a selection. Additionally, navigation is needed between choices so that people can effectively make their way through the options. Whether it's a list, a grid or a swipe, people need simple ways to get to the next option, review a previous option and also to make their final choice. This makes the request flow of personalized marketplaces much more complex for the users and for product development. Finally, if people need to spend a lot of time thinking about the specific provider the first time, they will likely want this same provider in the future. They'll also want to protect the specific provider from being taken by other consumers. In this case, the marketplace and its matching technology becomes less useful, leading the user to transact outside of the product.

So in developing the request flow of your marketplace, it's useful to think about where your marketplace sits on the commodity and personalization spectrum. How personalized does your service really need to be? How much cognitive load do you want or need to put on the user? And how certain are you that your marketplace product continues to be the best place for the user to make the transaction?

Not all marketplaces are mobile

When people hear the word "marketplace" as a consumer, the first thing that often comes to mind is an app with a map; Press the button, and something comes to you. However, it's wrong to assume that all marketplaces should necessarily be mobile.

Marketplaces is a very broad term and there are many different ways to cut it. One of those ways is to consider whether the marketplace is on-demand or planned. Depending on the type of service, this consideration greatly affects the design of the marketplace. For me, it comes down to who the user is and what their flow is as they are requesting the service or product offered in the marketplace.

For example, marketplaces like Uber, Caviar and Bloomthat are great on-demand examples. They share the characteristics of frequency and immediacy. In these cases, a mobile-first strategy (or mobile-only) is very applicable and almost necessary because the request has to come from a device that's always available to you. Additionally, the information that a user needs to provide to request the service tends to be minimal and can easily be found on a mobile device. And lastly, the user is not choosing a specific person to provide the service.

In contrast, there are companies like Laurel & Wolf, Honor, and Care.com which are more planned marketplaces. Here, these are things that people may want soon but not usually immediately. At the times that they're looking on the marketplace with intent, they've usually set aside some amount of time so they can have access to a laptop or a device with a larger screen. Depending on the type of service, there's also a lot of information that needs to be provided, e.g. specific room dimensions, pictures, links, or detailed notes which takes time to put together and to input. Lastly, the users here need time to think about the specific people who are providing the service and whether or not they trust them with their homes or parents or children, which is a serious decision.

There's definitely an argument for having a mobile presence to support some part of the marketplace transaction. For example, every marketplace creates communication between the two parties and mobile is the easiest way to facilitate that. An app that allows for quick questions or photos to be exchanged on the go might be very useful. However, in thinking about a roadmap for your marketplace, the on-demand v. planned framework is a useful construct to develop a mobile product strategy.

Do you trust AirBnB with your life?

Like many others recently, I read Zak Stone's heart-rending essay about his father. Especially as someone who spent a good part of my professional life working on building a marketplace company, it really made me think about trust.

In today's connected world, we put a remarkable amount of trust in companies. Every time we do a search on Google, post pictures on Facebook or send private emails, we enter a compact that we will provide data and information and that it won't be abused or personally identifiable. Now, as we outsource more and more of the physical world, we have an ever greater need for trust because it concerns the day-to-day health and safety of ourselves, our friends and our family.

This is not a legal question. I am not a lawyer. In fact, were I to argue it legally, I think it's a compelling case that Uber, AirBnB and others are marketplaces who should not be primarily held responsible for what the actors in the marketplace do. They facilitate transactions through a well-designed user interface but they do not provide services. Every time you use a marketplace, you are taking a risk, however minor or major you judge that risk to be. As a consumer or provider, that is your decision. Don't like the risks? No problem; don't enter the marketplace.

Perhaps marketplaces need to make it clearer to both consumers and providers that they are indeed "marketplaces", i.e. that they only facilitate transactions and are not responsible for the actors within the marketplace. When we throw around words like "trusted community", "connecting" and "friend", the line is blurred. When your company has become a verb and your brand is associated with the entire experience, it's understandable why people would assume that the provider and the marketplace are one and the same. There's certainly more that can be done on this front. However, all that aside, there's one burning question for me:

When do marketplaces have a moral or societal obligation to guarantee safety? When do they need to protect the actors in the marketplace from the economic consequences of accidents?

Up to a certain point, profit and safety motives are aligned. After all, people aren't terribly likely to continue using a service when they know that there are zero safeguards in place. There is some reasonable expectation of necessary safety - whether it's background checks, expert reviews or a critical response team, most marketplaces self-regulate to create a base level of safety. The real difference comes in downside protection. When something goes horribly wrong, which will invariably happen at scale, there are very real economic consequences. It's impossible to know in advance when something bad will happen but when it does, who's responsible for the $$$? Using these marketplaces is often cheaper precisely because they don't have to deal with much of the overhead that regulated service providers deal with.

If you're not willing to live with the company's definition of safety but still want the convenience and reliability of the service, what choice do you have? There's always the choice to not use the marketplace but if a company wants to appeal to this segment of people, there are concrete product steps that could solve the problem. I don't see how we can have it both ways - demanding both cheaper services and guaranteeing 100% safety at the same time. However, what we can do is to create product lines that span the cost/safety spectrum. What if AirBnB hosts could voluntarily enter into a program that had verified inspections at the same or higher standards than hotels? There would be a cost to the host but they would then be clearly badged as verified listings that could ultimately charge more for potential guests. Similarly, if you don't want to take an UberX, you can take an UberBlack and call a licensed professional driver who has standards and regulations enforced by others.

Ultimately, it's up to the marketplace company whether or not they implement these systems but as users, we always have a choice. Whether or not we want to think about it, using a marketplace is a calculated risk. At the end of the day, we have to be thoughtful about who we choose to trust and how we bestow that trust.

Twitter switches to hearts and kills love

Today, Twitter switched from stars to hearts and stuck another stake into the heart of love.

I'm disappointed in their lack of originality as they become yet another company adding to the continued dilution of love. Iconography and common language are wonderful but the heart has become so overloaded that it's lost all meaning. What should be reserved for something truly special has been reduced to a ubiquitous and thoughtless click. This is bad because when we reduce a single word or image to cover such a broad variety of feelings, we are effectively killing our ability to express ourselves in a nuanced way.

The vocabulary and the images to articulately voice our feelings exist. We need to choose to use them. So, let's challenge ourselves to move beyond love and like. I can't help but think of a quote from the Anne of Green Gables series where an old lady expresses her distaste for how to use the word "love".

"You love it.  Does that mean that you really love it? Or that you merely like the looks of it? The girls nowadays indulge in such exaggerated statements that one never can tell what they do mean. It wasn't so in my young days. Then a girl did not say she loved turnips, in just the same tone as she might have said she loved her mother or her Savior."

Today, three great examples of companies who do new things are Slack's emoji reactions, Pocket's "Add to Pocket" and Pinterest's "Pin It". They represent real world actions, evoke images and are expressive. There are so many more interesting verbs and images that we can use in apps and websites that are broadly understood, convey a range of feelings and aren't overloaded. In that spirit, here are some examples of new icons and verbs that we might consider:

1. fashion/e-commerce: when we "save" or "love" or "like" items of clothing, it's typically because we think they'll look good when we wear them.
   • verbs: hang it up, try it on
   • icons: hangers, a dress, a shirt, an item of clothing, a dressing room, a mirror
2. journalism/photography: when we "love" a great Instagram picture or an article that someone's written, we want to express our appreciation for effort.
   • verbs: give kudos, thank, pat on the back, praise, acknowledge, applaud
   • icons: gold stars, blue ribbons, thumbs up, hand clap
3. social media: when we "love" or "like" a post, it can be because we think that something's funny or to express sympathy or just to say that we're thinking of someone;
   • verbs: laugh, smile, hug
   • icons: kiss, hug, table-flip

I'm not saying that any of the examples above are perfect and can be used as-is. They need to be tailored to reflect the products, the services and the actions that we want users to take. If companies truly want to enhance engagement and make users care enough to use them regularly, they need to evoke real feelings. Human beings are far more complex than just people who love. In a single hour, we can go from from grouchy to jealous to angry to sympathetic. On a day to day basis, our feelings are interesting and rich and the products we use should represent that.

Let's give love meaning again.

the matchmakers of technology

Good judgment comes from experience. Experience comes from bad judgment.

We're several years into the world of on-demand marketplace companies, which means experience is now coming to bear, i.e. we've made enough mistakes in the past to (hopefully) make fewer mistakes in the future. There's now a level of sophistication that allows us to think more critically about what makes marketplace companies successful now and into the future.

Recently, I was working through a company's proposed deck in the on-demand marketplace space and we kept coming back to one question - what value are you creating beyond facilitating the transaction between people? Without having a good answer to this question, it's hard to prove that your company can grow and scale.

Marketplaces essentially connect demand to an appropriate supplier. At its core, this transaction involves the following things:

• onboarding (signing up your supply and demand)
• matching (choosing the right supplier for the demander)
• communication (sending messages between the matched supplier and demander)
• payment (cash money!)

At one time, this was a hard thing because you needed to develop the basic platforms to enable these systems. There was no Twilio to enable SMS and VOIP calling through phone numbers. There were no push notifications platforms on smartphones. There was no Braintree (and Stripe) to quickly and easily automate payments.

Once we remove those, only onboarding and matching remain as differentiators. Onboarding is itself being turned into into a marketplace through companies like OnboardIQ. Its individual steps are also each handled by companies like Checkr (background checks) and Karma (define your reputation score beyond the background check). Additionally, because onboarding is public by nature, there are great examples and best practices that we can all learn from. 

At the end, all that remains is matching and this is where companies create real value at scale through technology. If all you're doing is matching up random demand A with random supplier B, it's hard to show how you'll be successful. After all, what's to prevent any other company from doing exactly the same thing? In contrast, if your ability to match is powered by a core technology that is hard to create or duplicate and enables supply and demand to scale by orders of magnitude, then you've got something special.

Note that I've conveniently ignored all the operations, the execution and design but I'm specifically focusing on the idea here rather than the ability to realize it, which is a whole different thing for many other blog posts. As marketplace company ideas continue to pop up, I find myself coming back to this idea of being a skilled matchmaker. Ultimately, I think these are the companies that will wind up being most successful.