eBay
An online marketplace connecting buyers and sellers.
eBay won by serving sellers first, which built its network effect: Amazon's technically better auction clone failed against it. eBay reached a $25B market cap in 1999, but Amazon passed it in 2007 by owning fulfillment. Fine-grained fees strained seller trust, and a negative first rating cut a new seller's revenue 8%. Lesson: build for the side that creates the network, and protect its trust.
- 1Start with most painTeachers, disrupted by ChatGPT
- 2Build for teachersA suite of solutions for them
- 3Teachers spread itShared with students, added to syllabi
- 4Students become majorityLarger share of users, network effect
From Edward Tian, GPTZero founder
What was said about eBay
eBay served sellers first, and GPTZero copied that for teachers. Edward Tian read that eBay focused on sellers over buyers even though buyers outnumbered them, because serving sellers builds the network. He used it as the model for serving teachers first at GPTZero.
Teachers were the early wedge, and students later became the much larger share of users. Teachers shared the product with students and added it to syllabi, which created the network effect. Tian's rule: "the people that felt the most painpoint is always the best place to start."
Start with the group that feels the most pain, even if it is smaller. GPTZero targeted teachers, whose jobs were disrupted by ChatGPT, and built a suite of solutions for them. Like eBay with sellers, it served the smaller, higher-leverage side even though another group was larger.
Edward Tian on Building GPTZero, Scaling to $30M+ ARR, and the Superhuman Acquisition
Edward read about eBay choosing to focus on sellers over buyers even though buyers outnumbered them, because serving sellers builds the network. He used it as the model for serving teachers first.
eBay served sellers first, and GPTZero copied that for teachers. Edward Tian read that eBay focused on sellers over buyers even though buyers outnumbered them, because serving sellers builds the network. He used it as the model for serving teachers first at GPTZero.
Teachers were the early wedge, and students later became the much larger share of users. Teachers shared the product with students and added it to syllabi, which created the network effect. Tian's rule: "the people that felt the most painpoint is always the best place to start."
Start with the group that feels the most pain, even if it is smaller. GPTZero targeted teachers, whose jobs were disrupted by ChatGPT, and built a suite of solutions for them. Like eBay with sellers, it served the smaller, higher-leverage side even though another group was larger.
The ultimate guide to paid growth | Timothy Davis (Shopify)
It cut almost all brand spend after incrementality tests showed those users would have found it through organic search anyway.
Marketplace lessons from Uber, Airbnb, Bumble, and more | Ramesh Johari (Stanford professor)
Its growing list of fine-grained fees strained its relationship with sellers who built livelihoods on it, breaking a social contract. Early work found a negative first rating cut a new seller's immediate expected revenue by 8%, and effective percent positive predicted seller performance better.
The ultimate guide to SEO | Ethan Smith (Graphite)
It should rely on programmatic pages, and large sites like it can see results in one to four weeks once optimized. TripAdvisor repeatedly outperformed it internationally.
Amazon.com
It went public in 1998 at about $2B and reached $25B in 1999. Meg Whitman saw warehouses as uncool, and Amazon's auction clone failed against its network effect. Amazon passed eBay in market cap in 2007.
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