A Warning to Marketplace Startups
Angela Baldwin | June 10, 2015
![A Warning to Marketplace Startups](https://uploads.prod01.oregon.platform-os.com/instances/1374/uploads/images/custom_image/image/8175/transformed_Warning.jpg)
Kevin Roose (@kevinroose) recently wrote an article on Fusion about why he thinks lots of "Uber for X" startups may be in trouble.
- Companies that provide the cheapest on-demand services at the wrong time could set themselves up for failure.
- The competitive advantage for most on-demand startups is being the cheaper option.
He described what Homejoy, an on-demand app for home cleaning, did wrong. He described reducing costs too early, with a lack of market share or additional funds coming in, can make it impossible to provide the service you offer and grow. He described it as price dumping:
As we advise sharing economy startups, we'd like to echo that market share is crucial. Second, build a loyal community, start conversations with investors early, and focus on quality. Be smart about building your business.
Cheaper may be better for some businesses but quality is always worth paying for.
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