#chris dixon

Nice quick post by Chris Dixon reflecting on why certain web-based marketplaces are taking off now when they haven’t in the past. The key:

I asked Roelof Botha the “why now” question regarding web-based marketplaces. He said something I thought was really interesting: marketplaces depend on trust, and trust requires knowing the reputation of a prospective counterparty. Today, for the first time, you can get background information on almost any prospective counterparty by searching Google, Facebook etc. Or put more simply: we finally have an internet of people.

One of my favorite things about Airbnb is the way they handle reputation by looking at your social connections. If thousands of people follow me on Twitter and I have hundreds of friends on Facebook, I’m probably not an impostor looking for trouble. Square does some of this as well, I believe.

More broadly, “why now” is often just a matter of timing. I think of Dodgeball, which never took off in the way Foursquare has even though they’re essentially the same thing (or at least started that way). Sure, you can probably partially blame Google for neglecting Dodgeball post-acquisition, but a bigger key was the rise of smartphones, and the iPhone with its app marketplace in particular. 

Dodgeball was a great idea. Foursquare exploded because it was a great idea at the right time.