Critical Mass Matters.
Mark Rose May 9th, 2007
An interesting article on the Fool re: Yahoo! is exiting the auctions market. Even more interesting however, is the testament of how even the biggest brands (Yahoo!) with even the most salient internet experiences (auctions), can fail due to the problem of not achieving a critical mass.
It’s hard to believe that on all of Yahoo! Sports Cards and Memorabilia auctions (186,000 listings) there are only 326 current bids (.2%). Given those types of numbers, I’m surprised they waited this long to get out.
When looking at some of the US prediction markets,
Inkling
WSX Exchange
HedgeStreet
Just looking at “the action”, their respective *active* user bases seem to be in the hundreds and low thousands. All seem to suffer from the basic malaise of not having a thriving critical mass user base.
Lesson de-jour: Get critical mass!
