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MenuIf you were to build a freelance marketplace for data scientists and data analysts, what kind of companies and projects would you target?
In other words, who has the greatest need for data scientists and data analysts and would be willing to hire people virtually? And what kind of projects do you think make sense in such a context?
Answers
It's unlikely that companies would look to outsource such a critical component and also it would be near impossible to create trust around 3rd parties accessing their data especially via an intermediary service.
There are three major challenges with the scenario you describe:
1) the data is usually not in a format that is ready to be chewed upon (less critical)
2) The data-science tasks are usually not well-defined by the people who need them (very critical)
3) The process tends to be iterative and not on-shot.
The only successful situations I'm aware of that is close to the one you describe is competitions/benchmarks where the task is crystal-clear and the data is ready-made (like the Netflix one or many others run in the research community and by the government).
In these competitions, issues (1) and (2) are addressed, and you may hire a person so that they can iterate on it and continue the work (issue 3).
In certain domains and projects there's less iteration needed, so if the problem to be solved is well-defined and data is well-prepared, it can be done successfully. I've been in several situations where I "ordered" a data-driven algorithm and plugged it in a live system.
I would copy Kaggle initially (80%) and innovate (20%). The key is to get to Product / Market Fit asap, then scale.
http://www.kaggle.com/
Andrew Chen ( https://clarity.fm/andrewchen ) goes over this nicely in his presentation Zero to Product Market / Fit
http://andrewchen.co/2013/10/14/zero-to-productmarket-fit-presentation/
So typically it would depend on the complexity of the project and how easily accessible is the data to determine the likelihood and possibility of outsourced data analysis.
For example, it is much easier to look at a ecommerce website and provide analysis than to go into a retail shop that has both online and offline data sources that needs to be analyzed.
As an web analyst, I tend to get projects to help identify opportunities and support marketing activities. There is limitations due to the amount of data available and it would usually need to be looked at on a case to case basis.
Big data can include data multiple departments (sales, accounting, operations) to something as simple as web analytics. For complex projects, you face issues such as security, accessibility, longer timelines and iterations which would probably mean an inhouse resources would make more sense.
Hope this helps. Be happy to hop on a call to address any additional issues.
Related Questions
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What's the average CAC value or range for a Marketplace client?
I think you're looking at this the wrong way. Your customer acquisition cost is not something you should benchmark against other businesses. Without knowing more, like your short and long-term goals, it's impossible to answer. Two companies with similar business models may have different answers to this question. A venture-backed startup trying to keep up with aggressive revenue goals may be able to stomach an astronomical CAC. A bootstrapped startup that is not seeking venture money may aim for slower growth and much lower CAC. I suggest setting up a call with a marketing or finance expert to determine what CAC is appropriate for your company and how to get there.TL
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How important is it for a marketplace startup to drive enough demand (customers) for your supply (sellers) to make a full time living off of it?
It's very important. (first, read this article by Josh Breinlinger - http://acrowdedspace.com/post/47647912203/a-critical-but-ignored-metric-for-marketplaces) The way you achieve success in a marketplace is by driving liquidity for both your supply & demand. Demand-side Liquidity = When users come to your marketplace, they can achieve their goals. Supply-side Liquidity = When supply comes to your marketplace they can achieve their goals... which are almost always to make money. If you're making a large amount of your supply-side users a full-time income, then you're helping them achieve liquidity. Now it's not so black and white and it doesn't always have to be a "full-time income." It depends what their goals are. E.g., 1) At Airbnb, renters aren't looking to quit their day jobs and become landlords full-time... they're just look to earn a substantial amount of income to offset their rent, mortgage, etc. So in this case, I would probably goal on # of renters that earn >$500 / month... and (in the first 1-5 years) try to grow this number by 10-20% MoM... and maybe by just 5% once you're in the mid-high tens of millions in yearly revenue. 2) At Kickstarter, the goal of the supply-side is to get their project successfully funded. They don't care if the project creator is "full-time"... they just want to make sure they meet their funding goal. This is why they talk about their 44% project success rate all the time - http://www.kickstarter.com/help/stats 3) At Udemy, our instructors want a substantial amount of their income to be driven from their Udemy course earnings... so we look at how many instructors are earning >$2k / month.DT
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Holding funds in a 2-sided marketplace?
Check out https://www.balancedpayments.com/ They are made for marketplaces. Airbnb CEO among others invested in them and they have some of the best pricing/payout fees. Also some good info on http://www.collaborativeconsumption.com/2013/10/08/online-marketplaces-are-hard/ One of Balanced Payments co-founders is writing this blog series on marketplaces.MA
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Freemium v.s. free trial for a marketplace?
It depends on a number of factors but I'd boil it down to two key things to start: 1) What is your real cost to provide a free plan or trial? 2) Who exactly is your customer and what are they used to paying and who and how do they pay today? When you say "online workforce marketplace" it sounds as though you're placing virtual workers. If that's the case, or if you're paying for the supply side of the marketplace, the question is how much can you subsidize demand? Depending on where you're at in the process, I'd also question how much you can learn about the viability of your marketplace by offering a free version, assuming again, that free is actually a real cost to you. I was part of a SaaS project that started charging people for early access based mostly on just a good landing page (we clearly stated they were pre-paying) and were amazed at the response. I've also run a SaaS product that offered free trials and realized that the support costs and hand-holding and selling required to convert from free trial to paid wasn't worth it, this despite the product's significant average ARR. You might be better off providing a "more information" sign-up form (to capture more leads) and let them ask for a free trial while only showing your paid options. I've been amazed at the lead capture potential from a simple "have questions? Click here and we'll contact you" This is all the generalized advice I can offer based on the limited information I have, but happy to dive-in further if you'd like on a call.TW
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What is the best pricing (business model) to apply to a marketplace?
I like to separate your question into 2 sub-questions: #1 How do we determine which side to charge? #2 How much is the right amount to charge? On #1, my answer is that you can charge the side(s) for whom you add the most value. In your examples, Uber really solves a big problem for drivers, it's that they sit idle for a good part of the day, so are willing to pay a lot for new leads. (their alternative is no work) Consumers are charged more for the convenience of a private car but they are probably not so much willing to pay more for a taxi, even if they can hail one from their phones. For AirBnB, it's a mix, it's a way for landlords to monetize idle capacity which they are willing to pay for, but it's also a way for a renter to pay less than they would normally pay for a hotel. On #2 (how much), I like to triangulate a number of factors: - What's the maximum amount I can charge one side, while still being a good deal for them. - How much do I need to charge so that I can become profitable? (the economics are quite different if you charge 3% vs. 12%) - What are comparable services charging for substitutes/competitive offerings? I will just add that there is no formulaic way to determine pricing strategies (curated vs. open), and it's a lot more about what's the comparable and what the value delivered is. That's how I approached the question while deciding the business model at ProBueno.com (my startup)MR
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