Lenny's Newsletter - How to build trust in a marketplace
This is a peek at today’s subscriber-only post. Subscribe to get access to this full issue—and every issue. How to build trust in a marketplaceLessons from Lyft, Thumbtack, Rover, Snackpass, Peerspace, Shef, Good Dog, and Udemy👋 Hey, I’m Lenny and welcome to a 🔒 subscriber-only edition 🔒 of my weekly newsletter. Each week I tackle reader questions about product, growth, working with humans, and anything else that’s stressing you out about work. Send me your questions and in return I’ll humbly offer actionable real-talk advice. 🥁 Two updates, two asksUpdates:
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Thank you, thank you, thank you for your continued support, kind words, and excellent questions that make this newsletter what it is 🙏 The best is yet to come. Now back to our regularly scheduled programming.
Convincing people to get into the car of, send money to, or meet, a complete stranger is a hard problem, rooted in our evolution.
A lack of trust is why many marketplaces have struggled (e.g. Couchsurfing) and why those that cracked the trust problem (e.g. Airbnb) have gone on to do exceptionally well. To give you a comprehensive answer, I got in touch with the founders and early growth leaders at a dozen of today’s most successful marketplaces, including Lyft, Thumbtack, Rover, Shef, Peerspace, Snackpass, Good Dog, and Udemy, and asked them what they found to be the most effective way to build trust in their marketplace early on. I was surprised by the variety of answers. I was expecting to hear “reviews” and maybe a couple of other tactics. Instead I found six effective ways to build trust in a new marketplace:
Let’s explore each in a bit more depth. Thank you to Alvin Salehi (Shef), Archie Abrams (Udemy), Evan Goldin (Lyft), Lauren McDevitt (Good Dog), Matt Bendett (Peerspace), Kevin Tan (Snackpass), Philip Kimmey (Rover), and Sander Daniels (Thumbtack) for sharing their insights with me for this post 🙏 1. ReviewsReviews, as expected, were the most frequently cited strategy for building trust. They’re essentially table stakes these days. Here’s Joe Gebbia (co-founder of Airbnb) talking about the power of reviews for Airbnb’s early success (~90 seconds long): Alvin Salehi (co-founder of Shef) shared a similar lesson:
Matt Bendett (co-founder of Peerspace) had the same experience building Peerspace, but with a twist:
Same for Thumbtack, as Sander Daniels (co-founder) shared with me:
Lauren McDevitt, co-founder of Good Dog, found that traditional reviews alone weren’t enough, so they made them more personal:
And at Udemy, Archie Abrams (early growth leader) found that the volume of reviews created an unexpected tension:
If you have a trust issue and you don’t have a review system—the path is clear. 2. Verify your supplyThe second most frequently cited strategy for building trust was to take steps to verify that your supply meets a certain level of quality, or safety. And that makes sense. People will trust your marketplace if you’ve taken steps to make it trustworthy. For GOAT (and StockX), verifying supply was the core of their entire strategy. Here’s Eddy Lu’s early thinking (via Input magazine):
And here’s how they do it:
Good Dog similarly built their reputation on the quality of their supply, and thus required specialized training to do their verification of dog breeders:
For Thumbtack, verifying its supply (aka their “pros”) through background checks was instrumental in its early success, as co-founder Sander Daniels shared:
As it was for Rover:
You can read about how Rover does this here. Is there something you can do to “verify” the quality of your supply? 3. Lean on social proofA surprising number of founders referenced social proof as the most important ingredient in their early trust-building efforts. For example, Snackpass:
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