Vertical ERPs: One-Sided vs Marketplace
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Matt Brown, Co-Founder of Bonsai, on the rise of vertical ERPs
you effectively double the number of customer personas that you have to serve.
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This is the core tradeoff that separates a focused software business from a marketplace. A freelancer tool like Bonsai can make every product decision for one paying user, the freelancer. A marketplace like Upwork has to keep two very different groups happy at once, workers who want more jobs and faster pay, and clients who want lower prices, better matching, and less risk. That makes roadmap, support, pricing, and growth much more complex.
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In practice, the two sides want different things. Freelancers care about lead flow, reputation, invoicing, taxes, and getting paid quickly. Clients care about search, vetting, compliance, approvals, reporting, and dispute handling. One feature can help one side while making the other side worse off.
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That is why marketplaces earn higher take rates. Upwork is not just moving money or sending invoices, it is sourcing demand and creating trust between strangers. Bonsai avoids that balancing act by going deep on freelancer workflow and then layering financial products onto the same user base.
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The broader vertical ERP pattern is to start with one side, absorb workflow, then absorb cash flow. HoneyBook follows that path for independent service providers, adding payments and financial tools without turning into a two sided labor marketplace.
The companies that win this category will be the ones that choose clearly. Some will stay one sided and build denser software plus fintech for a single persona. Others will run the harder marketplace play and use matching, reputation, and payments to own both sides of the transaction.