You may not immediately know what a marketplace business model is, but you’ve definitely heard – and used – some marketplaces. Uber, eBay, Amazon, Airbnb, 99Designs – ring any bells? I thought so! Search Party is also a marketplace, a recruitment marketplace.
On the one side we have employers who want to hire someone (demand) and on the other we have recruiters and the candidates they represent (supply). The two groups meet on Search Party to conduct a transaction (someone getting hired).
If you’ve used any of the marketplaces mentioned above, you may think “What’s the big deal? Sure, they all make my life easier, but lots of online businesses do that.” What’s really special about marketplaces is the effect they have on the industry they’re in. Creating a dominant business with such a model in a given industry has lots of useful effects:
- It gives consumers more choice. By removing barriers that previously existed between supply and demand sides of a transaction, marketplaces encourage more participants. In our case, a recruitment marketplace means the more recruiters we have, the more employers we’re able to serve and vice versa.
- It lowers costs through transparency. When you can see what “goods” are available, you can compare your options and know a fair market price that makes sense to both the buyer and the seller. As a consequence, the seller can sell more because he or she has more willing buyers and the buyer will buy more because he or she feels they got a good deal.
- It creates efficiency. The two reasons above remove heaps of B.S., thus making transactions smoother for both sides.
For Search Party, a recruitment marketplace means we’re giving employers more choice of candidates (via their recruiters), at a lower price which results in faster hiring.
Our CEO, Ben Hutt, recently went on the road to tell prospective investors about Search Party’s recruitment marketplace business model. Below you’ll find his presentation slides as well as a short interview about Search Party.
Search Party Overview – live presentation recording
Search Party Overview – slides only, no narration
Interview with Ben Hutt, Search Party CEO
If you’d like to learn more about marketplaces, Andreessen-Horowitz has a great video on marketplaces and their network effects, including some examples of companies I mentioned above.
If you’re hiring at the moment, check out our website and sign up.