- Building a two sided market
is probably the hardest thing you can do.
A few weeks ago I organized
a market place founders dinner.
Because I felt like there needs to be
almost like an AA meeting type
for those founders that have decided
to build marketplaces.
You know, like, and I don't know if you know
what a marketplace is but like and Etsy or an Ebay
or Clarity, my startup.
It's where you build a platform and you hope that people
on the supply side and on the demand side
come together to complete a transaction
and get a lot of value from that.
And the reason why it's so challenging
is you've got both sides of the market to figure out.
When you build a normal technology company
or you build any busines,
you have a customer and you have a service
and you deliver it.
But with any marketplace
you have that same concept times two.
So, what I want to talk about
is how do you do that effectively.
I can only speak from my experience.
I don't know if you've checked out clarity,
But clarity.fm where marketplace for entrepreneurs
to get advice from experts,
real world experts with experience,
over the phone.
To grow their dreams and businesses forward.
And we've completed over 250,000 calls
in the last 18 months.
It's been growing 30 percent month over month.
It's really taken on.
And the challenge though is in the beginning,
is getting the fly wheel going, right.
I mean everybody that's tried to start
they always say like, in the beginning how do you start?
Here's my suggestions to you.
Number one, focus on one use case, right.
So, for us it was marketing as a topic
but also within marketing SEO.
So, if you're doing a vacation rental site,
like an airbnb, VRBO, or Homeaway,
maybe you would start with treehouses.
Now that sounds crazy.
But you might even start with treehouses in Europe
or even within a specific city in Europe.
But really focusing on a very focused use case
and even a product set, helps you streamline the experience.
Because if you're trying to do too many things
within a broader market
and something's kind of taken off,
it's really hard to understand what is working.
Once you know what's working,
then you can add on or stack on, as I like to say.
Stack on is different tan gentle market
so we started off with SEO in marketing
and then we added other types of marketing
like Facebook marketing, growth hacking,
online marketing and content marketing.
And then from that, from a marketing bucket,
we then tacked on business development then sales.
And we just kept expanding and expanding,
whereas two years into it almost
we have different, we have four thousand categories
and a bunch of different topics.
That's the way I believe to start,
by building a very focused use case,
focused on doing one thing really well
and making it niche.
Sometimes people call it uncomfortably narrow as a niche.
So, try to think, am I really uncomfortably narrow
as how specific this marketplace deliverable is.
The other thing that I would say is
focus on the demand side.
You know, a lot of people they think ok well,
I want to do this kind of marketplace.
I need a bunch of supply
and supply is the people delivering the service.
If it's buyers and sellers, it's the sellers.
And I would argue that it's better and easier
if you focus on narrow offering, to fake the supply
or essentially pay the supply to be there.
I mean Uber was famous for, you know
when they started their black car service
they didn't have ten thousand black cars signed up day one.
They went to a company and said,
look, you've got twelve cars.
How about I pay you to just have them respond
to these messages on this iphone app that they gave them.
And then that black car service would just tally up
all the drives and send them one invoice.
And that was the beginning of Uber,
now a multi-billion, I think they just raised that,
60 billion dollar valuation.
Companies started with that same concept.
So, fake the supply or restrict it
to a very specific use case, where you can control
and deliver on that promise
and focus on the demand.
Focus on finding the ideal customer that has that use case
that need, for your marketplace.
You know, those are the two big things.
And then the third thing I'm gonna say is
I believe the world has gone from a 1.0 version
of a marketplace,
to a 2.0 to now what we're in a 3.0.
And a 3.0, well, I'll start with a one.
One was Ebay, one was Craigslist,
where It was kind of a free for all.
A 2.0 is more like a curated,
very focused marketplace.
with identity and privacy and trust.
Which would be more like an airbnb or an Etsy
or kind of like where they're leveraging social trust
to build liquidity in the marketplace.
The third kind is what we're seeing now
where essentially they're fixing the supply side
of what you get.
And that would be Homejoy for home cleaning services,
Uber and Lyft for delivering,
where I guess the way to look at, is they set the price.
Whereas, in Taskgrab it would be a 2.0 example.
But a three is where you say look, this is the offering.
This is what we deliver on.
We own that brand, that consistency.
Those people might be contractors to us on the supply side.
But we will own the experience.
We will be responsible for that
and the price is fixed.
So, there's this consistent ever going ...
I mean another example will be Fiverr.
When you go to Fiverr, it's like the name says it.
How much is it gonna cost?
It's five bucks, whatever you want.
So, FIverr is an example of a 3.0.
If you haven't checked out FIverr you gotta do it.
I mean, you're gonna probably spend the next three hours ...
If you haven't been there,
start watching some of the crazy videos.
But, Fiverr is an example of, here's an example ...
A 2.0 version of Fiverr would be oDesk.
But what they said is look, no,
we want to reduce the friction and build liquidity.
And they said everything's five bucks.
Everything's bought in this format.
You know what you get.
The person's offering is exactly that thing.
And when you take the first,
all these strategies put together,
it really helps you build a marketplace with liquidity.
One, focus on a very
uncomfortably narrow niche offering.
Two, focus on the demand side versus the supply.
And then third, figure out are you a 2.0 or a 3.0 offering.
And it's even easier sometimes to go three
and maybe back to a 2.0.
Anyways, those are my ideas on how to build liquidity
in a marketplace is challenge that a lot of entrepreneurs
and founders are facing right now.
And I hope that brought value to you, leave a comment below.
If the number one take aways you got from this video
and I hope that you continue to growth stack your success
and you live a passionate life.
Have an amazing day!