I am building a marketplace and am in the pre-launch phase - should I focus on signing up buyers, sellers or both before we launch in 2 months?

First of all, the power of a marketplace is only unlocked when you have network effects among buyers to retain sellers and when you also have some daunting barriers to competition. I'll assume you know this and you've got a plan to help lock in your network once you gather it.

Even you have tremendous scope of reach like Google did when they launched their Play store, they start by lining up some sellers. An empty storefront will make a buyer bounce and never come back, but if you're persuasive and patient, you can get some sellers to work on something for your store before there is actually a marketplace.

Line up enough different sellers that you figure that at least 66% of those who come to your marketplace will stick around long enough to read about one or more of the products that your marketplace sells. Don't launch until you have them all ready and placed in your store.

Then go out, buy traffic from some PPC or display as networks, and start to sell in your new marketplace!

Good luck, and let me know if you have any further questions.

Great question. I answered this on Quora recently:

In short, you have the chicken/egg dilemma and the solution is unique to every platform. The two common answers are:

IF you have built a large team and an expensive platform ready to generate and respond to inbound marketing efforts (leads/projects/inquiries/bids etc…), and have inpatient investors or a show run-rate, then you have no choice but to generate business/sales/revenue by leading with your customers.

Create a fast and efficient process for marketing your new business leads to as many “pro’s” as possible to build immediate value for them to consider joining. As an example, if you offer SAT prep for local students, take your customer need requests, and put those everywhere - job boards, social media, craigslist, even email them out to local tutors… with a link to your signup page to “apply now.” Have a slick funnel with auto-responders ready to convert/retain these tutor applicants that click through to apply. Of course you can only hire one, but in the vetting process, you should be able to generate 10+ quality tutor profiles on your platform based off interest in that one job. Rinse and repeat.

I’d also take this a step further and post offers on job boards to join your tutoring service without any specific job in question. These won’t get as much attention as a real live listing, but you can generate signups on an ongoing basis this way.

IF you have a low burn rate, a small team of product and marketing guys, without much pressure to generate revenue now, you may have some freedom to double-down on your network-building efforts.

Focus on one area and/or niche (like Martin Jones mentioned). This will allow you to also perfect your funnels and A/B test some messaging.

Consider investing in a simple software/tool that can be used now by your pro’s. Thumbtack generated thousands of professional-signups by creating a tool that helped them save time posting on craigslist. If you can be creative, and develop something that offers value even gets pros to continue coming back to use the tool, you will be able to retain those who do use it while you’re generating the customer users. A simpler option to this is creating excel templates/worksheets used and searched often by the pro’s in your target market, and allowing users to download them free in return for an email. This is easy, and get’s you targeted emails so you can convert them as you have more jobs/customers flowing. Here’s a great example of this tactic being used for a manufacturing platform.
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Here is an online marketplace strategy you can take from:

1. Create a ‘hook’ for the service professionals - what’s going to keep them there while you are finding the egg… Thumbtack was very creative in that they built a tool that allowed professionals to post their new profiles to Craigslist:

“To start, we built a tool for professionals to easily post their Thumbtack profiles to Craigslist. Independent pros were already using Craigslist—we simply helped them better show off the quality of their work and highlight their online reputation. Chris Dixon rightly calls this approach, “come for the tool, stay for the network.” But once you’ve built a useful tool, the challenge is how to get it in front of people.”

This worked well because their service pros were already doing this. But, their manual process yielded ugly profiles.

For yours, it could be as simple as an embedded widget that pumps out calculations in return for an email address. Whatever it is, you will need something to keep them busy while you create demand.

2. Choose your local targets - where can you prove your model and test your process, messaging, systems and team? The best bet is where the competitors are not now or not ever. These may not be the “ideal” markets, but they will be ideal for testing.

3. Create an automated process for bringing in the service professionals - Your service providers need to be offered your new hook on an automated (continual and full-funnel) basis. I recommend starting with Facebook. There, you will be able to target by location and profession and retarget those who come to your site, but do not convert. If your platform is more niche or high-end, you may consider display ads, Linkedin or Pinterest.

In either case, you will need to automate the service provider acquisition process.

3. Setup your CRM and email service - With all of the new potential chickens and eggs coming to your site, you will need a CRM to track and respond to it all. You will also need an email responder in place so that those emails you capture will stay in your funnel and inevitably convert. I recommend this CRM Software, Sales and Marketing Automation. Agile has created a CRM and Drip service in one. It’s well worth the <$80/mo.

4. The next step is to build your lists - http://databaseplace.io/ You will need a good email list of customer prospects, as well as a list of contacts for your content marketing. You can use Linkedin and this site to grab email addresses for free: Find email addresses in seconds. To get your content and name out there, you will need to get in touch with bloggers, editors, and influencers in your niche. Use social sites and search to find these people. Use Similarweb.com to decide if the sites are worth your time or not.

5. Make sure you have your messaging dialed in before you start this process. You will want to attach your purpose to a pain point in the community or niche in order to gain press.
Now that you have the service professionals coming in, and a system for keeping them in, you need to focus on customer acquisition - Hopefully you will be able to attract customers through organic search and PR. For instance, if your platform is niche enough, your developer setup the site correctly, and you have a lot of suppliers/pro’s, you should be able to start climbing the search rankings quickly. Your category pages should rank. If not, reconfigure.

If the size of your jobs (commission or revenue), you may need a sales force and/or a large ad budget to target the customers. If you are in this situation, contact me for more specific instructions. But for now, set up a funnel that is very specific to customer needs. This could be a cold email with a link to a category page of service pros they would be interested in, a targeted ad to that same page, a guest post on sites that speak to your target audience, or various other methods… Just make sure you are capturing emails at this stage as often as possible. You may be getting a lot of traffic who are interested based on the newness, but not ready to order at the moment. Offer everyone a free download or something to get their email now. Then they will be in your drip and hopefully, see an email from you next time they really need a service provider.

6. Send those campaigns - Use your CRM to start your drip sequences to the emails you have loaded. Search out some templates that have worked in your industry, and test out a few.
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It’s late and I’m exhausted, so I’ll end it here

Best of luck!

Alex - Right2Revenue.com

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