B2B Marketplaces | Overview
Investment Thesis 1.0 | Part 1 of 5: Overview
This is a 5-part series covering my investment thesis on B2B Marketplaces. In this series of articles, I’ll take you through my background, B2B market trends, an investment strategy, a case study, and a set of startups I’m keen on watching for investment. For now, part 1 will give you a preview of what’s to come. If you are interested in what I cover, give me a follow, like, and definitely comment so we can start a discussion.
Stage & Sector
Seed to Series B B2B Marketplaces
Thesis Statement
Invest in B2B Marketplaces enabled by SaaS products that create supreme attachment through a consumerized user experience, bottom-up sales model, and data-driven customer success practice.
Thesis Summary
Over the past decade, we have seen the venture industry start to favor B2B deals over consumer deals with an extra $20B in funding in 2019. Within the B2B sector, there is a major opportunity waiting for disruption: B2B marketplaces. The industry has seen numerous failures over the last 10–20 years due to a lack of enabling technologies. With greater adoption of the internet, cloud advancements, and new payments infrastructure, a sector containing multiple verticals with an annual GMV of over $250B is ready for digital transformation. Now is the time to invest in startups that are able to capitalize on highly fragmented markets with a vertical-specific, free-to-trial platform that solves the pain points of the industry. These businesses can increase stickiness and grow transactional revenue through SaaS products that provide immediate impact across the value chain and enable these marketplaces.
My Experience
My education and work experience has set me on the path to identifying successful B2B marketplaces. I studied design thinking at Northwestern University receiving a bachelor’s in Manufacturing and Design Engineering (MaDE) and a master’s in Engineering Design Innovation (EDI).
Over the past 5 or so years, I have worked as a product manager at two early-stage venture-backed startups both with B2B offerings.
Starting as an APM, I worked on mobile product development and then moved onwards as a Growth PM to new feature development across our entire product suite at Rocketmiles. Our offering included a B2B marketplace for hotel supply purchase and B2C offering for hotel booking.
From Rocketmiles, I’ve moved on to dscout, a Series B stage startup with a B2BC marketplace for user research. I am currently working as Lead Product Manager across multiple B2B and B2C products. In early 2020, I launched our newest product, taking it from pain point discovery to revenue generation. dscout has created a SaaS product that allows companies to host their user research studies and then a B2C marketplace for sourcing participants and research data.
I completed a year-long venture fellowship with AVG and am currently Venture Consultant at Alumni Venture Group (AVG) / Purple Arch Ventures (PAV), completing due diligence on Seed to Series D B2B & consumer startups and sourcing similar deals for our fund.
My Stage Interest
Early-Stage (Seed to Series B)
At this stage, startups are at an exciting genesis of the product and are still in or moving out of their product-market fit phase. They are growing a team and maturing their product and services based on feedback from initial customers. The final state of the company is far from clear, but early signs of impact in the market can be uncovered and their potential can be imagined by both founders and investors. For some startups, there is enough usage and financial data to use a light data-driven approach during diligence. At this stage, a startup may or may not have capitalized on network effects, so the potential of this growth strategy among others can be factored into the assessment. As an operator turned investor, these are the stages of a startup where I am inspired and intrigued to see the pain points a company has uncovered and what solutions they are presenting to the market for disruption. The ambiguity is what is most thrilling.
