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You can forgive me for expecting that a gathering of Trust & Safety professionals at a conference about risk would be decidedly cautious and, well... safe. Last week’s Marketplace Risk conference in Austin, TX was anything but. I’m flying home to Seattle impatient for my future AI-powered personal shopper, with a new appreciation for the surprising growth story tying together online marketplaces and Artificial Intelligence—trends I didn’t see as closely related but now have me daydreaming about the possibilities.
Here are 5 takeaways from conversations with 100 marketplace pros across 10 sessions over 11 hours. We’ve got a hot take; best advice; coolest case study; most interesting startup; and a dishonorable mention.
Hot take
SaaS is in trouble. AI is driving the cost of producing software closer and closer to zero, pushing the “build vs. buy” equation closer to “build” than before. But even with AI disruption, transactions still need to happen—and value goes to where the value exchange happens (read: marketplaces). Making money in SaaS will get harder, and marketplaces, by connecting goods, services, and capital where economic activity happens, will be AI winners. Technology is not the enduring moat, it’s the network effect.
The wrinkle: online marketplaces created value by reducing the coordination costs between supply and demand (instead of meeting buyers at the designated spot on Sunday at 3 pm, buyers could shop online 24/7). But now, AI agents—like OpenAI’s Operator—eliminate the need for buyers to search at all. With soft information about your preferences, an AI agent can find inventory you don’t even have the language to search for. Asked what marketplaces look like in 10 years, the panel consensus was “You don’t need a trusted central party to transact”—to big head nods throughout the room. Is the marketplace of the future a personal AI shopping assistant?
Thank you Colin Gardiner, Ryan Moser, and Mikhil Raja for the discussion
Best advice
“An ounce of prevention is worth a pound of cure”
Thank you, Benjamin Franklin. In this case, panelists calculated the remediation cost of missing a fraudulent seller identity during onboarding. The example average cost was in the $600-per-incident range, but it was the 6-figure real-world examples of grand theft auto in car transport marketplaces that stuck with me. The takeaway: you can spend a little bit of money on seller identity verification up-front and save a ton in down-stream costs.
The panelists were clear that identity verification is not one-size fits all and the data you need to verify identity will depend on your use case, marketplace, and requirements (less regulated marketplaces might have lower thresholds, more regulated platforms might want additional checks). But as a rule, “as the sophistication of fraud increases, so does the need to gain higher assurance that an individual or business is who they say they are.” At Middesk, the most common use case we hear is from marketplaces who have automated their individual seller verification, but are facing mounting manual backlogs verifying business sellers as they try to scale.
Thank you Laura Chen, Drew Fowler, and Jeff Sakasegawa for the discussion.
Middesk for Marketplaces
Download the Middesk for Marketplaces guide to learn how to streamline seller verification, comply with the INFORM Consumers Act, and keep your marketplace secure.
Coolest case study
“I’m coming to get you”
Nope, this isn’t a line from a Scream thriller, but a totally innocuous and not-uncommon message exchanged between Dashers and delivery customers in DoorDash’s in-app chat. “I’m going to kill you”—now, Austin, we have a problem. The DoorDash team shared a fantastic case study of the automated chat moderation they built to intercept and prevent abuse on their in-app chat—a phenomenon I was upset to learn is perpetrated more often than I would have expected by hangry delivery customers.
The DoorDash team explained their successful, iterative process for implementing AI chat moderation so phases like “I’m coming to get you” would be allowed through while truly problematic language would prompt Dashers with a penalty-free cancellation option, or forced cancellations for the most threatening messages. Offensive messages sent after delivery would be blocked entirely. What I appreciated most about the example is the optionality DoorDash provides Dashers in their Trust & Safety strategy.
Thank you Chad Dennis and Kristin Kupiec for the discussion
Most interesting startup
I’ve been searching for a private chef for a birthday party in eastern Washington State for months, with no success (if you know anyone great please DM me). Imagine my delight when Cravd co-founders Avinash Joshi and Ajith Govind Satheesh presented all the ways they’re using AI to power their 9-month old personal chef marketplace. Business is booming, they just haven’t made it to Eastern Washington yet.
Beyond the inventive ways they’re using voice AI to automate the intake process, my ears perked up at the discussion of how the co-founders are already seeing people move out of knowledge work to pursue their passions. Former office workers are now earning 5 figures a month as personal chefs, and Cravd’s AI-powered marketplace is making it easier for chefs to make the leap and manage their business. That’s what I call the cookbook-definition of AI’s positive potential for improving quality of life.
Dishonorable mention
Maybe compliance folks were underrepresented in the audience, but I didn’t hear a peep about the INFORM Consumers Act, the 2023 law requiring online marketplaces to verify the identity of their high-volume third-party sellers (a low bar at $5,000 in sales on a platform in a year). Granted the law only applies to consumer goods marketplaces, which made up one segment of marketplaces represented at the conference, but still, I’d expected more discussion of the law given its sweeping scope.
There’s been no enforcement action on the INFORM Act to date, so are marketplaces just ignoring the law / focused on preventing fraud? If you’re in marketplace trust & safety or compliance and have a perspective on the INFORM Act, I’d love to hear from you and learn how you’re approaching the regulation.
That’s all from Marketplace Risk ATX. What a time to be alive. See you in SF this May!
