The Marketplace Disintermediation Problem

It’s kinda hard out there for a marketplace

It’s not easy to build a business between buyers and sellers on the Web. This is why at Scripted we’ve decided to keep our buyers blind. No emails. No phone calls. And you know what? It’s no problem.

First, we’ll discuss the practice. Then, we’ll discuss the theory, and finally wrap it all back together.

There are two main reasons why a blind marketplace works for Scripted.

1. Lost in translation. 

Most of our customers have never worked with a writer, and as great an experience as it can be, most simply don’t want it. That’s why they come to Scripted instead of hiring a writer themselves. The fact is, working with writers is a specialized skill. In order to get the most out of them in the shortest amount of time possible, you need to learn how they think and to understand and anticipate their reactions.

Our largest customers have the most to lose, so we help them translate their big jobs into bite-sized pieces that writers can take. We anticipate that some writers will bite more than they can chew, so we prevent it. When the writing isn’t perfect, we send it back with our edits put in terms a writer will understand, and in a way that won’t be offensive. We’ve learned this skill through lots of trial and error.

A typical company will not have had this experience, and if we put them directly in touch with our writers, they will make the same mistakes that we did, and as our company scales, so would the need resolve disputes. We put ourselves in the middle in order to make our market more efficient.

2. One to one doesn’t scale.

Vacations come up. Kids get the flu. Life happens, and when it does, a writer can’t write. How’s our customer going to feel when the deadline approaches and their only writer falls off the map? Pretty bad. Who want’s to hear about it? Not us.

Now imagine a scenario where the stuff hits the fan and the job seamlessly transfers to a writer in waiting. Content gets delivered on time and to spec. Who’s happy now? Both sides of the market. What’s the difference? An intelligent, consistent, and dependable market-marker who can transfer knowledge. The fact is, we can’t force our writers to write, but we can train our Scripted account managers to make the marketplace work.

It takes time to develop relationships with a lot of great writers. If we weren’t in the middle, we’d have a whole bunch of one-to-one relationships between buyers and writers. With ourselves in middle of the market, we facilitate a many-to-many relationship between businesses and writers. It scales like crazy, and that’s awesome.

Summarizing the practical case

There’s a real necessity here for Scripted to stand directly between Buyers and Writers. It reduces the support burden, and ultimately makes both writers and buyers happier. For businesses that “need” to work directly with a writer, we’re not afraid to pass on the business. It’s not our model. If you want to call a writer, there are plenty of other freelance writing job boards out there. If you want a simple way to get great content, welcome to Scripted.

A bit on theory

Disintermediation : marketplace :: Kryptonite : Superman

This is why we like our marketplace blind. We don’t like disintermediation. We spend a lot of time assessing writing ability, and we don’t want to give it away for free. If we can’t capture value on each transaction, we have to do a LOT more volume than we’re doing now. That’s a lot more work, and we like to enjoy our weekends.

However, we can focus on quality if we’re able to capture the stream instead of only the first interaction. This is a problem that our friends at 99designs, Taskrabbit, Getaround and others deal with every day. When your goods must be delivered in-person, or if multiple iterations are required, you can’t really stand in between without upsetting both sides. Fortunately, writing can be transferred digitally, and we can limit iterations to one round.

The big idea here is this: disintermediation prevention really depends on what you’re selling. If you’re selling everything (sorry Zaarly), then it’s really, really hard. So you fix that by focusing on volume, and hope for the best. Only a few will survive, but if you do, your investors will be happy. Unfortunately, you’re already up against the likes of eBay and the 800lb gorilla, Craigslist

In summary

We decided, somewhat by happenstance, to build a marketplace around a single product: writing. The focus has many benefits, not least of which is the benefit of combatting disintermediation and justifying it on multiple fronts.

To anyone else starting an Internet marketplace business, my advice is this (a timeless MBA cliche): pick one thing, and do it better than everyone else. And keep it simple.

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