Power-to-the-People Marketplace
Expose hidden data and give consumers control over consequential decisions.
- Difficulty
- Advanced
- Time to result
- ~months to results
- Steps
- 5
- Confidence
- 96%
Start with a high-stakes decision where consumers feel dependent on an intermediary because relevant information is fragmented, hidden, or difficult to interpret. Gather that information, organize it around the decision, and give users tools that let them act independently. The entrant must also contribute something distinctive—such as Zillow's database and Zestimate—rather than simply republishing incumbent data. That contribution creates consumer demand and gives existing industry participants a reason to join. The output is a marketplace whose value comes from greater transparency, stronger consumer control, and expanding participation. Barton applied this mechanism in travel, real estate, and employment by exposing schedules, property values, salaries, reviews, and other previously inaccessible information.
Origin
Extracted from Masters in Business through Rich Barton's accounts of building Expedia, Zillow, and Glassdoor around inaccessible consumer information.
Core principles
- 01People want direct control over important decisions.
- 02Hidden but obtainable information signals a marketplace opportunity.
- 03A new entrant must contribute unique value, not merely extract incumbent data.
- 04Transparency attracts users and eventually encourages industry participation.
How to run it
- 1
Find the Control Friction
Locate a consequential transaction where consumers must ask an intermediary for information or choices they could theoretically evaluate themselves.
Pro tip Use your own repeated frustration as an initial signal, then verify that many others share it.
Watch out Personal annoyance alone does not establish a viable market.
- 2
Map the Missing Information
Document what users need, where it exists, who controls it, and why it remains difficult to access or interpret.
Pro tip Look for public records and other fragmented sources that can be combined legally.
Watch out Do not assume one central organization owns or controls all relevant data.
- 3
Build the Empowerment Layer
Aggregate the information and add tools that turn raw data into an understandable decision, comparison, or estimate.
Pro tip Design around the decision users need to make, not around the structure of the source databases.
Watch out A large database without a useful decision interface may not change behavior.
- 4
Bring a Pot Roast
Contribute proprietary data, functionality, or demand that creates value for users and incumbents rather than arriving only to extract value.
Pro tip A useful estimate, benchmark, or comprehensive database can become the marketplace's initial center of gravity.
Watch out Incumbents may resist if the product merely takes their data and sells access back to them.
- 5
Recruit the Ecosystem
Use demonstrated consumer value to show industry participants that contributing information benefits buyers, sellers, and professionals alike.
Pro tip Let user adoption prove the demand before asking every incumbent to participate.
Watch out Do not make complete incumbent cooperation a prerequisite for launching.
In the wild
Barton and his cofounder struggled to price homes, collected county data, calculated dollars per square foot, and developed the Zestimate. Zillow combined that new estimate with a database covering all homes, giving consumers useful information before the full real-estate industry participated.
→ Consumer demand helped Zillow develop into a broad digital real-estate marketplace.
Glassdoor collected verified employee reviews, salary information, leadership approval, and job titles so candidates could understand what employment at a company was really like.
→ The transparency product became one of the world's largest job sites and produced information useful to workers and investors.
Common mistakes
Showing Up With Just a Fork
Extracting incumbent data without contributing unique value creates resistance and a weak marketplace position.
Publishing Data Without Decision Tools
Users need comparisons, estimates, and interfaces that help them act; raw information alone is rarely empowering.
Waiting for Universal Cooperation
A marketplace may need to create consumer value independently before incumbents recognize the benefit of participating.
Is it for you?
Best for
It is best for entrepreneurs entering large markets where consumers make important financial decisions with limited visibility.
Not ideal for
It is not ideal when the missing information cannot be obtained lawfully or does not materially improve user decisions.
From the transcript
“People want control.”
“we want to empower regular people with data and tools so that they can make much better decisions about big, important financial stuff.”
“we we didn't show up to the pot luck with just a fork.”
From the episode
Rich Barton Talks About His Startup Companies
Rich Barton