Explain a Marketplace Without Treating Both Sides as One Customer

A marketplace slide usually arrives in the same shape: a circle of suppliers, a circle of buyers, an arrow between them, one friendly persona labelled "customer," and a large number labelled "market opportunity." Nothing on the slide is exactly false. It just doesn't say who does what, who pays whom, or what the company earns on a day when the arrow doesn't connect.

The fix isn't a busier diagram. It's a narrower one, told from both ends: two people with two different reasons to show up, one transaction followed all the way to completion, the company's own work marked as the company's, and the money drawn as two separate flows. Then the same picture with one thing missing.

Everything below uses an invented marketplace, so the mechanics stay visible without borrowing anyone's real numbers. Call it RigShare: a hypothetical service that connects small venues with people who own lighting equipment. Halden Street Playhouse is a fictional 180-seat theater. Marisol is a fictional owner of eight LED wash fixtures she rents between tours. No real transaction, account, or accounting conclusion is represented here.

Two needs, two clocks

The playhouse's spring production opens on Thursday 12 March, which means load-in on Monday 9 March and the set lit and focused by Wednesday night. The lighting designer's plot calls for fourteen fixtures. The playhouse owns six. It needs eight more on site.

Marisol's need is different in kind, not just in direction. Her kit sits idle most weeks; she wants it earning more of them, at a rate she sets, on dates that fit around her own touring schedule. Her hard limit: she has another booking from 18 March, so anything running past the 16th is impossible for her.

Now the roles, because they rarely line up with job titles. The playhouse's technical director chooses the fixtures. The producer signs off on the money. The stage manager puts the load-in on the calendar and the crew on the schedule. Three people on one side of a transaction that a single persona would flatten into "the theater." On Marisol's side, she chooses which requests to accept, she owns the gear, and she is the one who has to be somewhere with a van on Monday morning.

Different clocks, different risks. The playhouse is exposed to a date; if the fixtures aren't hanging on Monday, the production is in trouble. Marisol is exposed to her equipment; eight fixtures leaving her possession for a week is a bigger decision than a venue renting a room for a night. Two sides of one marketplace, and they will not be persuaded by the same sentence.

Which is why a supply count proves less than it looks like it proves. "Forty-six listings near you" does not establish that Marisol's eight fixtures are free from 9 to 16 March. Registrations measure interest; a match measures whether the thing someone needs is available where and when they need it. Keep those two claims in separate sentences.

Follow one match all the way to the loading door

Take the March booking and walk it through, stopping at each handoff to say who moved.

Discovery. The technical director searches by fixture type, dates, and distance. The company's contribution here is real work: the search index, the date filter, the availability calendar, the messaging thread. But the calendar is only as good as what Marisol put in it, and the listing photos and condition notes are hers. A stale calendar is a supply-side failure, not a platform miracle or a platform crime. If RigShare's own staff phone owners one at a time to confirm availability, say so in the pitch, because manual matching changes the cost structure and what "scaling" would even mean.

Selection. The technical director picks Marisol's kit; the producer approves the spend. Two people, one decision, and the platform's part is limited to presenting terms clearly enough that the producer can approve them without a phone call.

Agreement. The two sides accept a set of terms: dates from Monday 9 to Monday 16 March, a stated rental, a stated fee, condition notes, and who moves the gear.

Delivery. Marisol loads in on Monday morning. The playhouse crew rigs and focuses. Nobody from RigShare is at the loading door, and that is the most useful sentence on the slide, because the loading door is where physical responsibility changes hands. The platform can record what both sides agreed about damage, but it does not inspect, rig, focus, or transport anything. If the pitch's diagram puts a "marketplace" box across that moment, the diagram is claiming work nobody does.

The run. The playhouse operates the fixtures for four nights. Marisol is not there.

Completion. On Monday 16 March she collects the kit, and both sides confirm the return condition through the platform.

Six steps, and the company contributes to four of them, in a support role each time. That's not a weakness in the pitch. It's the honest shape of the business, and it tells a reader exactly which parts get harder when volume grows — the search, the calendar, the term-setting, the payment split — and which parts grow with Marisol's van, her time, and her willingness to say yes.

Money moves twice, and only one of them is the company's

Here is where a foundation-level explanation most often goes wrong: the large number on the slide gets described as revenue.

In this sketch, two payments move.

The playhouse spends $1,290. Marisol receives $1,200. RigShare receives $90. The value transacted between the two participants is $1,200, and the fee the company charges for this booking is $90, stated separately and labelled as such — whether that $90 is recognized as gross or net revenue depends on the principal-or-agent question taken up below. The fee in this sketch is a flat booking fee, chosen to keep the example readable — it is not a recommended rate, a typical rate, or a percentage anyone should copy.

Which side pays that fee is a design decision, and the deck should say which one it chose. Plenty of marketplaces deduct the fee from the owner's payout instead, so the venue pays $1,200 and Marisol receives $1,110. That changes what each participant sees at checkout and what they argue about, but it doesn't change the underlying point: the rental and the fee have different recipients and different purposes, and one table holds both.

A practitioner framework published by Andreessen Horowitz on 21 February 2020 draws this same line — between value transacted through a marketplace and the revenue the marketplace earns — and looks at the matching conditions on both sides rather than at aggregate growth. Useful framing. It is also an investor-practitioner framework from 2020, not a validated threshold, not neutral advice about your business, and not an accounting standard.

One more label to leave unresolved rather than guess: whether the company is acting as a principal in the rental agreement or merely as an agent introducing two parties affects how amounts are presented. This sketch's model isn't universal guidance, and a public framework can't settle a private company's treatment. Nobody should write "recognized revenue" on a slide until the person who owns the finance function confirms which side of that line this business sits on and how the gross or net figure should be stated. If a pitch needs the number before that conversation happens, label it as what it is: the value transacted, or the fee charged.

The transaction that never forms

The next production at the playhouse needs six moving-head fixtures for 23 to 29 March. Same search page, same confident interface. The playhouse sets the radius at 80 km, and the results are thinner than the page suggests: a few dozen nearby listings, none of which can put six working moving heads on the theater's grid on those dates. The closest thing that fits the dates is two units 300 km away, which would mean arranging freight both ways — a different kind of job, for a different budget, on a timeline the venue can't absorb.

So the playhouse books from a regional dealer instead, off-platform.

Follow the money through that branch: no rental, no booking fee, no company revenue. Activity happened — searches, listings viewed, maybe a message or two — and none of it was income. This is the branch that fixes the deck's vocabulary for good. Sessions are not transactions. Listings are not supply. A large supply count coexisting with an unsatisfied need is not evidence that the market is functioning; it is evidence that counts and matches are different things.

Two cautions on how to present it. First, describe the branch as a designed experience — what the buyer sees, what the platform offers, what happens to the request — and be clear that this describes a proposal, not observed behavior. Second, do not attach a frequency to it. How often buyers walk away unmatched, and why, needs records that a sketch doesn't have. The temptation is to say "this almost never happens," which sounds reassuring and is a measurement claim. A pitch can say the platform shows the shortfall honestly and offers a waitlist; whether that recovers the booking is a product hypothesis until someone has the data.

Pick one branch like this and stop. A slide that promises to handle every exception has stopped explaining the business and started promising a roadmap.

Check the labels with the people who own them

Everything above is a model. Before any of it reaches a real audience, each label gets confirmed by whoever is accountable for it.

Ask the producer whether the fee is genuinely paid by the venue. Ask the technical director whether that person really makes the selection, or whether the producer does. Ask Marisol whether the delivery arrangement, the condition terms, and the payout timing describe her actual experience. Ask the finance owner for the principal-or-agent treatment and the gross-versus-net figure.

Then keep three claims visibly separate, because they get compressed into one sentence all the time:

• A completed transaction — one booking that ran from search to collection.
• Repeated participation — Marisol listing again in May, or the playhouse searching again for the autumn season. This is a different statement, even though it's stronger.
• Company earnings — the fees actually received and how they're treated.

Where a component is unconfirmed, leave it marked as unconfirmed. An unresolved line in a draft deck is more credible than a confident one that collapses the first time someone asks a question about it.

What this account can support: questions about matching, about where responsibility changes hands, about which parts of the work belong to which party, and about where the company's money actually comes from. What it can't support: a recommended take rate, a valuation, or a claim that network effects have been demonstrated. Those need different evidence and a different conversation.

Two journeys, one labeled contribution

The ending worth aiming for is compact. March, from the playhouse's side: a technical director picks eight fixtures, a producer approves $1,290, a crew rigs them on Monday 9 March and strikes them on the 16th, and the production opens on Thursday. March, from Marisol's side: eight fixtures leave her possession for a week at a rate she set, around a calendar she keeps, and $1,200 arrives after collection. Between them, doing one bounded job: the marketplace that showed the listing, filtered the dates, recorded the terms, and kept $90 for the introduction and the payment handling.

Two needs. One transaction. Two money flows. One branch where nothing matches and nothing is earned. A reader who can follow that knows which parts of the business are being proposed and which parts, if any, have actually happened — and those are different sentences, which is the whole point.

Frequently asked questions

What should a marketplace diagram show instead of a single customer persona?

It should show two sides with two different reasons to participate, follow one transaction all the way to completion, mark the company's own work as the company's, and draw the money as two separate flows. It should also be able to show the same picture with one thing missing, such as a transaction where no match forms.

In the RigShare example, who does what on the venue side?

The technical director chooses the fixtures, the producer signs off on the money, and the stage manager puts the load-in on the calendar and the crew on the schedule. Marisol chooses which requests to accept, owns the gear, and is the one who has to be somewhere with a van on Monday morning.

Why does a large supply count not prove that a match exists?

Forty-six listings near you does not establish that Marisol's eight fixtures are free from 9 to 16 March. Registrations measure interest, while a match measures whether the thing someone needs is available where and when they need it. Listings and confirmed availability are separate claims.

How should the two money flows be shown?

Rental of $1,200 moves from the playhouse to Marisol, and a booking fee of $90 moves from the playhouse to RigShare. The playhouse spends $1,290. The value transacted between participants is $1,200, and the company's fee is $90. Whether that $90 is gross or net revenue depends on the principal-or-agent question, which the finance owner must confirm; do not label it recognized revenue before then.

What does the unmatched second production show?

The playhouse needs six moving-head fixtures for 23 to 29 March, finds no suitable match, and books from a regional dealer off-platform. No rental, no booking fee, and no company revenue occur even though searches and listings were viewed. Sessions are not transactions, and listings are not supply. Describe the branch as a designed experience, not observed behavior, and do not attach a frequency without records.

Further reading

• Pitch a Marketplace When One Side Is Growing Faster Than the Other — Once both sides are drawn separately, this takes the next marketplace problem: counting completed pairs rather than each side, and separating traded value from your own revenue.
• Revenue, Profit, and Cash Tell Different Stories in a Pitch Deck — For the labelled-fee paragraph: this follows one transaction through recognition and collection to show why a revenue figure, a profit measure and cash answer different questions.
• Show What Your Traction Actually Measures — If a count like listings or bookings goes on the slide, this settles the unit, qualifying event and period, so interest is not reported as a transaction.