From Andreesen Horowitz’s article “What’s Next for Marketplace Startups?”
by Li Jin and Andrew Chen
The last twenty years saw the explosion of a number of services coming online, from transportation to food delivery to home services, as well as an evolution of marketplace models from listings to full-stack, managed marketplaces. The next twenty years will be about the harder opportunities that software hasn’t yet infiltrated — those filled with technological, operational, and regulatory hurdles — where there is room to have massive impact on the quality and convenience of consumers’ everyday lives.
The services sector represents two-thirds of US consumer spending [1] and employs 80% of the workforce [2]. The companies that reinvent various service categories can improve both consumers’ and professionals’ lives — by creating more jobs and income, providing more flexible work arrangements, and improving consumer access and lowering cost.
The companies mentioned in this essay just scratch the surface of regulated industries. You can imagine a marketplace for every service that is regulated, with unique features and attributes designed to optimize for the customer and provider needs for that industry. (A full list of regulated professions in the US can be found here.) We fully expect more Airbnb- and rideshare-sized outcomes in the service economy.
[1] Bureau of Economic Analysis, Personal Consumption Expenditures by Major Type of Product
[2] Bureau of Labor Statistics, Employment by Major Industry Sector
About Andreessen Horowitz
Founded in 2009 by Marc Andreessen and Ben Horowitz, Andreessen Horowitz (known as “a16z”) is a venture capital firm based in Silicon Valley, California, that backs entrepreneurs building the future through technology.
a16z is stage agnostic, meaning it invests in seed to late-stage technology companies, across the consumer, enterprise, bio/healthcare, crypto, and fintech spaces. It has $19.2 billion USD in assets under management across multiple funds, including the $1.4B Bio funds, the $3.1B Crypto funds, and the Cultural Leadership Fund.
a16z aims to connect entrepreneurs, investors, executives, engineers, academics, industry experts, and others in the technology ecosystem. It has built a network of experts including technical and executive talent; top media and marketing resources; Fortune 500/Global 2000 companies; as well as other technology decision makers, influencers, and key opinion leaders.
a16z uses this network as part of its commitment to help portfolio companies grow their business, so its operating teams provide entrepreneurs with access to expertise and insights across the entire spectrum of company building.