1. To begin as a Horizontal or Vertical marketplace? 

This was the first real challenge, as a Mobile app with a tech play, incumbents were clear on building a Horizontal marketplace, providing services for multiple Home Service categories. The easiest to launch is the Home Cleaning space. With on-demand housemaids, AC Cleaning, and Deep Cleaning are on average 2-hour services, easy to perform with small margins. As late as 2018, years after the first movers began services the market was largely split on this approach. Helpbit (Now Amazon Home Services) and MrUsta.com began as Horizontal plays with hosting over 25 different categories from Cleaning to Renovations. While Movesouq (now Service Market) and Justmop (now Justlife) began as vertical plays the former focusing on just Home Moving services while the latter focusing only on cleaning services.

2. To be an Open, Managed, or Hybrid marketplace

Unlike the F & B, or retail space, Home Services can have 3 distinct models.

1. Open marketplace: Where Buyers & Sellers are introduced via the platform with minimal intervention from the platform. Like Craigslist or Dubizzle.
2. Managed Marketplace: Where there is a controlled/monitored list of vendors on the platform who adhere to Minimum Service, Quality & Pricing guidelines. Vendors here can promote their own brands and services.  Examples here would have been Zomato/Talabat Version 1, where restaurants would manage their own delivery, after placing an order on the Mobile app
3. Hybrid Marketplace: This would generally consist of a mix of In-house Branded Vendors donning the platform's brand name and the rest being vendors who still promote their own services.

Phase 1: The Horizontals vs the Verticals: 2015 - 2017

It is very important to note here that all players began as open marketplaces in which the platforms allowed many partnered vendors to perform services under their own brand names and service quality. The reality today in 2023 which is clear and obvious to us all is that Open marketplaces barring Dubizzle and a few other classifieds do not make for successful marketplaces.

However, as late as 2018 the Horizontal plays had an obvious advantage as their large service offering meant that they were able to overcome challenges of service volume seasonality and also bring in a larger volume due to larger service offerings. So in the initial days of this business being a Jack of all trades paid off rather than being a specialist in 1 category, because no matter how good you were in a single category the market was so fragmented that a leadership position was almost difficult to get.

Phase 2: The Verticals attain parity: 2018 - 2019

However in focusing on one category the "Playbook" as if were was becoming very clear and apparent for verticals. Business Leakage & unreliable vendor being the biggest problem in this business, allowed the verticals to shore up on these issues, investing in User data masking, focusing on bringing labor in-house, and investing in the brand, the vertical plays were able to focus on perfecting the business model before diversifying while most horizontal plays invested more resources in mitigating the increasing problems arising from their diversified offering.

Phase 3: Pivot to Diversified Managed Marketplace: 2020 - 2022

Around 2019 it was increasingly clear that the industry was in a state of adhering to two truths. A vertical play was not a winner unless it dominated a niche industry but it was clear that a managed marketplace was an absolute winner. Investing in the Brand, and moving away from the marketplace model while also diversifying service categories allowed for tremendous growth for platforms like Justmop which pivoted from a vertical cleaning play to Justlife a horizontal play with more than 10 categories and MoveSouq pivoted to Service Market and started propagating their brand on ground.

Phase 4: Winning formula Declared: Hybrid Marketplace

Ultimately today in 2023 we have Justlife, Service Market, and Urban Company who have all ditched the marketplace model entirely to solely focus on taking full control over quality and labor.

In 2023, while I write this summary it is rather clear that while a Hybrid marketplace model is largely successful, it is still ultimately not the answer. Proving that certain sectors like Home Services ultimately cannot succeed with Tech alone. This is one of the main reasons why the world today hasn't yet seen a global brand in the Home Services Tech space.

Learning 1: Marketplace model not useful in Home Services

From a moralistic standpoint, it does leave a Tech enthusiast a little disappointed that the marketplace model failed to deliver a for multiple SMEs in the market and that platforms had to all ultimately bring services in-house. However, it is a big learning to realize that the Marketplace model is far more suited to product-based sales than services-based sales.

Learning 2: The Ultimate accountability rests with the Platform:

Regardless of the industry, it's pretty evident that the platform does bear the ultimate accountability of the service to the end-user and so, not investing in physical infrastructure is out of the question. Amazon, ultimately initiated Amazon Prime, Food Delivery Platforms did invest in Last mile services and platforms like Uber and Airbnb are under the scanner if Freelancers are indeed employees.

Learning 3: The Answers lay in the core Business Experience:

Unit economics and User experience at the base level never lie. There is no way to evade it and work around it. Good User experiences often misguide the business into believing that what can be done at a small base can be replicated at scale. It is the poor customer experiences that ultimately show and reflect the chinks in the business model and so must always be used as the best-guiding principle.

Learning 4: Fluidity and Adaptability are the answer: 

Be it Covid, Technology, AI or any other external factor, knowing and realizing that change is the only real constant, and so building a company culture and management structure that is proactive in catching trends and adapting to them is very important.