We spoke to tamme CEO and Co-Founder Gen George about how her AI-driven business is helping to balance and scale marketplaces all over the world
Thanks for taking the time to speak to us today Gen! Can you start by telling us a little bit about tamme?
tamme is an ad tech platform built specifically for marketplaces to balance their supply and demand. It works by tracking all your users behaviours and then creating ads across all your channels, to then adapt both them and the channel choice based on what is driving credit cards. This is then all tied back to your unit economics.
Interesting! As for unit economics, how would you explain them - and why are they so important for marketplaces?
Unit economics are really the levers within your marketplace which you use to understand how to drive a sustainable model. For example:
- CAC: The cost to acquire a paid customer
- CLV: Customer Lifetime Value
- Churn: % rate at which paid customers are dropping off
- CTS: Cost to serve the customer
Let’s say for example it costs $100 to sign up a paid user, and that user stays on the platform for 3 months at a $50/month subscription fee, before ‘churning’ off the platform. If it costs anything less than $50 to serve that customer over those three months, for example: acquiring supply for the customer to engage with as a part of the marketplace, then you are ahead!
This is why tamme tracks all these metrics, so it knows how much to spend on advertising to acquire new users and how much to spend on nurturing existing users within your marketplace.
Many marketplaces have spoken to us about the “chicken or the egg” problem. How are you seeing new marketplaces solve this?
The ‘chicken or the egg’ problem is where marketplaces are unsure where to start by getting more supply or more demand. Typically we see marketplaces go out and find or growth hack supply first. This is so that when demand signs up, they can interact straight away and hopefully get a good experience. The trick is keeping your supply engaged while you go through this so they remain good quality and engaged supply.
That makes sense! What is the typical expansion strategy you see for marketplaces?
As marketplaces are constantly trying to balance their marketplace liquidity, we see them focus on a geographical areas in either a suburb or city and then expand suburb by suburb or city by city across the world in the same fashion.
Tamme has a feature called “boost” which allows marketplaces to do just that and test out new suburbs or cities by allocating a boost to a specific place and a focus on just supply or demand to seed traction.
Tamme has marketplaces using the platform all around the world, what types of trends are you seeing in marketplaces?
We have seen a massive transformation from marketplaces that started in 2005-2010, I guess you could call it the classifieds era, to what we have now which is morphing into managed marketplaces. Andrew Chen has some great essays about this transformation for marketplaces. I think there has also been a lot of consolidation of marketplaces in market for growth. This can be seen in the US, Europe and even Australia, with notable examples being Rover with Wags, and more recently DogBuddy (amongst others).
We are also seeing a lot more B2B marketplaces rather than mass consumer focussed marketplaces emerging. Financially speaking, the likes of Uber, Lyft and Airbnb will IPO over the next 12 months and the effect that has for all marketplace investors will be very interesting to see.
What marketplace group and events do you get involved with to stay in touch with what is going on?
That’s great, thank you Gen! It seems that tamme is a useful tool for marketplaces of all sizes. For more information, visit www.tamme.io!