Democratizing the Platform Economy through Marketplace as a Service — with Juho Makkonen

Podcast Notes

In this episode, we have the great pleasure of speaking to Juho Makkonen, CEO and co-founder of Sharetribe — and a common friend from the heydays of the onset of the sharing economy.

Sharetribe builds software that helps entrepreneurs and organizations create their own online marketplace platforms. Today their software powers more than 1,000 marketplaces in 70 countries around the world. Juho is also co-author of The Lean Marketplace, a practical guide for building a successful marketplace business where our Platform Design Toolkit is also featured.

In this episode, we get into the details of marketplace trends, with a special peek into trends of componentization and modularity, and the “tension” between standardization and offering a more managed and tailor-made marketplace as a service.

We take a deep dive into the evolving Sharetribe offerings and understand why the company decided to become source-available rather than open-source after 8 years into the business. We also get some insights about different marketplace needs and trends in different geographies.

Finally, we explore how Juho sees the position of Sharetribe compared to other players such as Mirakl or Shopify regarding defensibility strategies and key audiences. He also explains what Sharetribe does to protect its mission — to democratize the sharing economy — by experimenting with a stewardship model, and how their history coming from the “grassroots world” keeps influencing how the company grows and is run. A highly thoughtful episode to enjoy!

Remember that you can find the show notes and transcripts from all our episodes on our Medium publication:

To find out more about Juho’s work:

• Website: https://www.sharetribe.com/
• LinkedIn: https://www.linkedin.com/in/juhomakkonen/
• Twitter: https://twitter.com/kusti

Other references and mentions:

• New Foundations of Platform-Ecosystem Thinking, 2020: https://platformdesigntoolkit.com/DOWNLOAD-NF
• Juho Makkonen and Cristóbal Gracia, The Lean Marketplace: A Practical Guide to Building a Successful Online Marketplace Business, 2018: https://www.amazon.com/dp/B0796XMKYC
• Sharetribe Marketplace Academy: https://www.sharetribe.com/academy/
• Sharetribe Flex: https://www.sharetribe.com/products/flex/
• Two-Sided: The Marketplace Podcast: https://www.sharetribe.com/twosided/
• Decathlon: https://www.decathlon.co.uk/
• Mirakl: https://www.mirakl.com

Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/

Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: www.platformdesigntoolkit.com/music

Recorded on 2 December 2020.

Key Insights from the episode

1. Sharetribe and its offerings have and continue to evolve in tune with major marketplace trends, like that of organizing more complex markets and transactions, rather than being the “Airbnb for X”. When approaching these complex marketplaces, Sharetribe offers a so-called “composable transaction engine”, allowing users to draw their own flowchart describing all the different steps that users in a specific industry are taking in a transaction. They then get back an API that delivers that process, where third-party software, like for instance for identity verification systems or licences, can be integrated. Juho explains how in the beginning, WordPress was their point of reference, but that was before we were in the “API economy”. Today, they think of themselves a bit more as Stripe for the marketplace industry. In this evolution, they have decided to become source-available rather than open-source, not allowing others to offer Sharetribe as a SaaS, but nonetheless enabling customers to build their own code on top of open-source templates. Sharetribe Flex has thus evolved as its own marketplace-platform for developers, as Juho puts it: “A developer comes in and they enjoy working with that […] like building high-quality products”. Sharetribe Flex makes it easy for the developers to build what they want and then connect to the broader ecosystem.

2. Building marketplaces go beyond the technical elements and features: it is also about a mindset and shared language. Juho has seen is his work that more and more big organizations and companies start to adopt the mindset, building platform-marketplaces while also starting to adopt concepts such as “minimum viable platform” and being more eager to experiment. The reason why we have not yet seen yet any “boom” in the platform cooperative space, which Juho and his colleagues follow closely, depending on a mix of things, like a missing entrepreneurial and growth mindset (or even any aspiration to grow), as well as more deeply ideological convictions. At the same time, combining tools and APIs for decentralized governance with Sharetribe APIs could indeed lead to a full-stack solution for platform cooperatives, allowing the development to take off.

3. The type of network effects that Sharetribe focuses on partly centered around suppliers who see the potential to grow their customer base through Sharetribe, by building new integrations ot sell as plug-ins, or to other developers. At the same time, offering lots of existing SaaS integrations make it a lot cheaper and more attractive to use Sharetibe’s products, building defensibility and “create this ecosystem that is the most powerful ecosystem for somebody building their own marketplace business”. In addition — as in line with Sharetribe’s mission to democratize the sharing economy — they want to build a peer community where users learn from each other and learn the best practices.

? Boundaryless Conversations Podcast is about exploring the future of large scale organizing by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.