At Some Point in the Future, Can My Startup’s Marketplace Experience Network Effects, Making It a Highly Defensible Software Product?

Answer

Yes! At scale, my marketplace will have strong network effects. Therefore, it will be very defensible!

To be precise, it will have network effects for 6 reasons, here are 3 of them:

First Network Effect

From the vantage point of the supply-side users (freelancers / models), they want to advertise their photoshoot services on the marketplace with the highest number of companies using it to purchase modeling photos.

Of course, this increases the likelihood that these freelancers will sell modeling photos.

Therefore, as more companies use the marketplace, its value proposition increases in the eyes of the freelancers. Thus, a network effect is created.

Second Network Effect

From the vantage point of the companies seeking to purchase new modeling photos, which are the demand-side customers…

Every customer wants to feature a highly attractive model in their new modeling photos. However, each customer has a different 'vision' for what this person should look like. Why? Because every human possesses a unique definition of beauty, it’s very subjective and varies among individuals.

For example, when it comes to women models, preferences vary widely: Some people like blue eyes, while others like green eyes. Some people like blondes, while others like brown hair. Some people like curly hair, while others like straight hair. Some people like 25-year-old models, while others like 45-year-old models. Some people like thin / slender models, while others like athletic models with more of a muscular build. Some people like Chinese models, while others like Brazilian models, etc.

Therefore, as more freelancers (models) join the marketplace, a customer is more likely to find the perfect freelancer to feature in their new modeling photos, based on their unique definition of beauty.

As a result, as more freelancers (models) use the marketplace, its value proposition increases in the eyes of customers (companies). Thus, a network effect is created.

Third Network Effect

From the vantage point of the companies seeking to purchase new modeling photos (demand-side customers)…

In a lot of cases, customers are looking to purchase an outdoor modeling photo instead of one done indoors. When this is the case, every single customer will want the perfect outdoor background for their modeling photo. However, almost every single customer will have a different definition of what the perfect background is based on their unique needs. For example, if you ask 100 customers, “What type of outdoor background are you looking for?” you will get 100 different answers or close to it.

For example, a customer promoting a winter jacket might desire a background of a Colorado mountain covered in snow. Meanwhile, a customer promoting a swimsuit might want a tropical beach with a few palm trees in the photo. Or a customer promoting running shoes might desire a running trail with a few huge sequoia trees in the photo.

Naturally, every freelancer will have the opportunity to offer an outdoor background that is unique to the town they live in. For example, a freelancer living in a Colorado ski town can provide customers with a backdrop of a snowy Colorado mountain in their photos. Or a freelancer in Hawaii can offer a tropical beach background. Or a freelancer living near the Sequoia National Park (California) can offer a running trail with a few huge sequoia trees in the background.

Therefore, as more freelancers join the marketplace, a customer is more likely to find the outdoor background they are looking for.

As a result, as more freelancers use the marketplace, the marketplace’s value proposition increases in the eyes of customers (companies). Thus, a network effect is created.