Building and scaling a marketplace app is hard. I see this play out all the time:
A founder comes to me excited about their big marketplace app idea. “It’s like Airbnb but for [insert niche here]!” they say.
They’ve mapped out an app, maybe hired a designer, and they’re ready to invest 6 figures in building it. There’s just one problem. They haven’t stopped to ask the most important question:
“Will this thing actually work as a business?”
Not “can I build it?” – because with today’s tech, you can build pretty much anything.
But “can I get this to liquidity? Will it scale? Will it make money?”
If I’m thinking about investing, this is exactly how I size it up…
The first question is simple:
Can you get enough buyers and sellers, fast?
For example… can you onboard 100 buyers and 100 sellers on day one?
If you can’t, you need to think carefully about the business viability. No activity = no traction = churn.
Before you write a line of code, test it manually — WhatsApp group, Notion board, Insta page, Google Sheet — whatever works. If you can’t get people transacting without an app, an app won’t magically fix it.
Most marketplaces take a small clip per transaction — say, 2–10%.
If your marketplace can’t realistically drive $100 million in annual transactions, you won’t reach the revenue to make it worthwhile.
That’s why understanding market size and transaction volume is critical — without it, you can end up with a great-looking app that barely breaks even.
Timing matters.
If your marketplace app can’t get to a $100 million run rate in under 3 years, most investors will start worrying about returns.
A long, slow grind is risky — harder to raise capital, harder to attract top talent, and much more stressful as a founder.
Lastly — do your numbers make sense?
If it costs more to acquire a user than you make on each transaction, your cash runway is going to disappear fast.
I always look at:
If you can’t find a path to healthy unit economics, scaling will only make the problem worse.
Building a marketplace is hard.
Building a sustainable marketplace is even harder.
Before you drop hundreds of thousands of dollars on development, run the numbers. Test the model manually. Pressure tests the market.
When I look at potential ventures, these are the questions I ask every time.
If you’ve got a marketplace idea and you want a second set of eyes on it — hit me up.