Loading...
Answers
MenuWhat are good hacks for adoption strategies in a double side marketplace?
I am developing my pitch deck for a local services double side marketplace and I am not sure which are the best strategies (and cheap).
Answers
For two sided marketplaces, I recommend having strategies for the following areas:
1) Strategies for solving the chicken-and-egg problem in the beginning, as many multi-sided marketplaces fail to gain traction due to this problem. Buyers need sellers in order to show interest; sellers need buyer in order to come. Some strategies to solve the chicken-and-egg problem:
a) Determine which side "makes or breaks" your business, and find key initial anchor tenants on that side. Usually, it's the buyers, as sellers will go where there's demand. Pay/give incentives to those initial anchor tenants if you have to.
b) Keep it to an initial segment or two in order to establish critical mass. Don't be all over the place. Establish a niche first where your buyers and sellers can meet.
c) Fake it till you make it. The founders can pretend to be buyer/or seller in the beginning. Also make some convincing "fake" profiles so that the marketplace does not look to empty.
2) Strategies that create and maintain high value-add interactions between all sides in the marketplace. The marketplace needs to help buyers and sellers capture consistent value effectively and efficiently. Once you solve the chicken-and-egg problem, you need your users to stick. Some strategies:
a) Create a reputation system to ensure quality buyer and seller interactions.
b) Give your sellers adequate tools for creating products and services.
c) Optimize how your buyers can best search and filter the products, services, and sellers they need.
d) Be very clear how buyers and sellers can transact for goods and services. Make the process simple and easy to follow.
I see this post is a bit old but I hope you're still looking for answers! You asked for a hack, so I'm thinking you've exhausted some of the more standard ideas. I don't know much about your business, but local services probably tells me just enough....
One problem with two-sided markets is you need demand for both sides. But demand is difficult to drum up if one side sees lack of demand on the other. And so it goes. One way to solve for this is to use a matching algorithm to match someone making a request with local service providers. What this does is it keeps the small number of actual providers from being exposed to the end user. So they'll still have a decent user experience if you can effectively communicate the small return to them. I used this technique when I founded my music company. We hadn't yet cleared the 7 million tracks from the major labels, so to make it appear as if we had every song ever written, I developed an algorithm that matched personal attributes (mood, things they enjoy, etc.) and delivered music that matched their profile. Obviously, it came from the database we had which was much smaller at the time. The second thing we did was remove search so that the diminutive size of our catalogue would not be exposed. Of course, we changed up everything once all the clearances were in place. But these two tactics were instrumental in landing more paying clients, the "other side" of the market (in our world). Lots more but no room. PLS upvote so others can read it.
There are so many answers to this question, but really it depends on what the market is. The first question to ask yourself is, where do your users (both kinds of profile) already hang out? Where do they live online?
Maybe there are certain social networks, certain forums, certain publications. Go there first.
Even more critically, the best way to growth hack for something like this is to take an experimental mindset. Choose 3 or 4 different user acquisition techniques and run a small, time-bound test to see which one performs best. Then, ask yourself why this method outperformed the others. Take that knowledge and choose a few more methods and test them. Rinse and repeat.
It will be high effort at first, but you'll learn fast. It's always better to just start and get your hands dirty than spend much time trying to find the 'best' strategies.
The platform’s business model is to take a percentage of the transacted value for connecting producers and consumers. The platform does not own the supply chain of value, but rather controls the network of third-party producers of value and the consumers coming to the platform to consume that value. Two-sided marketplaces can be difficult to successfully execute, but many of today’s most profitable start-ups are two-sided marketplaces. One of the most popular two-sided marketplaces is Uber.
Uber’s marketplace connects drivers with riders. Uber is one of the largest transportation companies in the world, but it does not own have any cars or full-time drivers on its balance sheet. Other notable two-sided marketplaces include Airbnb, Etsy, Craigslist, and Handy. Since two-sided marketplaces are the product of their network, they are difficult to establish and maintain once created.
During the ideation phase of starting a marketplace business, it is best to go into a field in which you have expertise in. He was able to identify first-hand a problem in the industry and create a platform to solve the problem. One of the major keys to creating a successful two-sided marketplace is nailing the core transaction. The core transaction is the set of actions consumers and producers must complete to exchange value.
Companies must plan what transaction will occur on their platform to properly scale their marketplace and target the right type of users for their platform. For Uber’s core transaction, drivers make themselves available for rides and ride-seekers submit requests for rides. On eBay, producers list their products on the site for sale and consumers purchase those items. In every transaction, one party always makes the initial connection that sparks the transaction and begins the process of exchange.
Once consumers find what they are looking for, they consume the value being created by the other party. Lastly, consumers create value after consumption through some form of compensation, usually monetary, thus concluding the core transaction. The chicken-and-egg problem is the sink-or-swim moment for most two-sided marketplaces. Initially, a platform does not generate enough value to attract new users. Without one party using the platform, there is no incentive for the other party to join or stay. Read more specifics about their execution in the link above to learn how to attract a critical mass of producers and consumers to the platform. Once you solve the chicken-and-egg problem for your two-sided marketplace, you must ensure your platform is liquid. Craigslist is an example of a very liquid two-sided marketplace. This is because there is an extremely high probability that someone listing an item, service or request on the platform will relate to an interested party, no matter the location or time. Craigslist enables a lot of transaction of value. One way to guarantee two-sided marketplace liquidity is analysing your platform’s product/market fit. And when it comes, you will know it as your platform will grow exponentially.
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
Related Questions
-
I just opened a small, upscale, boutique style hair salon. Any ideas on how to market?
I have no experience with salons, but marketing is my thing. So I'll give you some suggestions of what to think about, followed by what to do. Do you have clients already (let's say from your working days at another salon)? If so, you can start profiling them. You can ask them to fill out a form in exchange for a free gift (maybe one of those creams you use in the salon), or an entry to a raffle (where the prize is valuable). In the profiling, you want to look out for which neighborhoods they live in, what kinds of activities they like to do, what kinds of social events they love to do, and their occupations. Then, using each of those profile data, you can market to more prospects who share the same characteristics. For example, - You can set aside a budget to send flyers to specific neighborhoods. In order to get people into the door, maybe you can offer a certain procedure for free in exchange for opportunities to win new regular customers. (You could theoretically do this with Groupon too, but you have less control of who comes into your door) - You could set up joint venture relationships with organizations like ball room dancing schools, professional associations, etc. You could offer an exclusive discount with those groups to entice potential customers to try out your service. More opportunities for you to win regular customers. - With certain demographic data, you can probably make the same offer by advertising on Facebook. If you target specific enough, you can get the price of acquiring the lead to be pretty cheap. You would have to figure out your typical lifetime value of your customers before deciding whether advertising on Facebook would be worthwhile. One last thing, you can offer gifts for your existing customers if they refer you people. If you have any more questions, I'm happy to chat with you. Hit me up on this platform.SL
-
What is the most creative way to introduce myself (and therefore my service) to 100 key decision-makers without selling or pitching anything?
You've answered your own question. Reach out to your prospects with the question, such as "How would you...". Ask what people want then give it to them if you can with integrity and thoughtfulness.DI
-
What is a good/average conversion rate % for an e-commerce (marketplace model) for customers who add to cart through to purchase order.
There is quite a bit of information available online about eCommerce conversions rates. According to a ton of sources, average visitor-to-sale conversion rates vary from 1-3%. This does not mean the Furniture conversions will be the same. The bigger problem is that visitor-to-sale conversions are not a good data point to use to measure or tune your eCommerce business. All business have some unique friction factors that will affect your final conversion rate. It's very important to understand each of these factors and how to overcome them. The best way to measure and optimize is to take a conversion funnel approach. Once you have defined your funnel you can optimize each conversion rate to better the total effect. For example: Top of the funnel: - All web site visitors, 100,000 / month First conversion: View a product page, 50% of all visitors Second Conversion: Add to Cart, 10% of people who view products Final Conversion: Complete Checkout, 80% of people who put items in a cart In this example we see that only 10% of people who actually view products put them in to a cart, but 80% of those people purchase. If you can figure out why visitors are not adding items to their cart and fix the issue to increase the conversion rate, revenue should increase significantly because of the high checkout rate. You can use free tools like Google Analytics to give you a wealth of information about your site visitor and their behavior or there are some great paid tools as well.DM
-
How has Uber grown so fast?
Obviously, they do the fundamentals well. Good brand. Good experience. Good word of mouth. Good PR. Etc. Etc. But after my interview with Ryan Graves, the head of Global Operations at Uber (https://www.growthhacker.tv/ryan-graves), it became clear that they are operationally advanced and this is a huge part of their success. I'll explain. Uber isn't just a single startup, it's essentially dozens of startups rolled into one because every time they enter a new city they have to establish themselves from essentially nothing (except whatever brand equity has reached the city ahead of them). This means finding/training drivers, marketing to consumers, and building out local staff to manage operations for that city. This is where Ryan Graves comes in. He has a protocol of everything that must be done, and in what order, and by who, to ensure the best chance of success in a new city. So how has Uber grown so fast? Essentially, they figured out how to grow in one locale and were relentless about refining their launch process to recreate that initial success over and over in new cities. No plan works for every city, and they've had to adapt in many situations, but it is still a driving factor for their success.BT
-
What are average profit margins in Ice Cream store business?
Hi! I am owner of an ice crean chain with 45 stores in Chile. We have stores in shopping centers, streets and also karts that you can put in events and parks. The average cost margin of ice cream (depends on the amount of materials you use in producing the ice cream) is around 40%. This is italian gelatto where you serve the ice cream without a specific measurement so your costs can vary due to the size of each portion you serve. About the brand you should focus on your unique value proposition and what kind of ice cream you are selling. We import the pastry from Italy and the fruits and milk from our country. Your ROI depends on your sales price and costs. If you focus on high market ice cream you can charge high and keep costs down.MF
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.