As peer-to-peer marketplaces continue to gain popularity, how will you compete with the big players in the market? In a recent article, eMarketer estimates 56.5 million people will be using a service in the sharing economy. While this is an an extraordinary number it comes are no surprise. With the likes of Amazon, AirBnb, Lyft, and Uber they are dominating in their field of expertise. So how will you start your marketplace to be as successful as they are? While you can hope for future success as they have achieved, you must prepare yourself with these steps to help get you started.
Test The Market
Just like starting any other big project, you must conduct your research. The world is too big to just start throwing your resources and time to everyone. Plus you will get a lot of rejections and negative feedback. Once you have gathered your research and data, find out where/when your market visits, hangs out, or browses online. The data you gain from customer behavior can help improve your chances once you go live with a product or service. Here is a few questions to help you get started in the research phase:
- Who are the current leaders in the space?
- What is the target demographic?
- Where will you be selling (region, state, global)?
- How will you enter the market?
- Why should someone purchase your product or service?
Many of the top companies that started consisted of 2-3 people such as Apple, Facebook, and Starbucks. These companies are prime examples that working with others and putting your ego aside can get you places. It’s a tough task to penetrate the market as a new startup and getting another founder on board can help with your vision. It’s important not to just pick anyone, but one who can align with your goals as a marketplace and work together. Trust is an important trait in one you seek but also ensure they are fit for the role. There are countless stories of people who choose to go in business with their friends but end up stabbing them in the back once it becomes successful. Just because you trust them as your friend, does not mean you are always safe. Just like the old saying “two minds are greater than one”.
Starting your own marketplace can add up very quickly. You can only be prepared financially for so much and things do not always go your way. Do not depend on your sales forecasting to be much higher or your marketing team bringing in more quality leads. It takes time to develop quality business. If you are looking to go the bootstrap route, be prepared for a struggle. With limited budgets, you will be hesitant to take on more risks and it can hurt your marketplace in the long run.
If you are willing to swallow your pride, consider getting investors. It can help take off some of the pressure on your shoulders and flexibility. It’s tough to do, as many entrepreneurs have started their business from the ground up and seeking investors is almost seen as a sign you are failing on your own. In reality you are doing what is best for your marketplace and can see more potential. Rather than shutting down your marketplace, it gains a second chance and hopefully can only go up from there.
Build Your Network
Now to the fun part. As any business model goes, your customers are what keeps you doors open or in this case your marketplace running. In the B2C model, you are simply keeping an eye out for your customers and ensuring you are fulfilling their needs. Things are a bit different in the peer-to-peer and sharing economy models as you will have to handle the combination of buyers and vendors. The challenge comes are you must balance keeping both parties happy and ensure they will stay doing business on your peer-to-peer marketplace. Establish relationships with your buyers and sellers and reach out to them to get their opinions on what improvements can be made or adjusted. This will help build trust and ensure they are happy enough to continue doing business with you.
Don’t think you need to build your network by yourself. Filling in the right positions for your team can help accelerate this process. Here’s a few tips on how to do just that.
- Hire interns to help monitor social media and little day-to-day tasks
- Leverage social media outlets to build relationships with thought leaders and top marketplaces
- Outsource the small and tedious tasks to help concentrate on building your network
- As stated above, build your network as much as possible.
We’d love to hear your marketplace stories! Whether you just starting out or have been around for many years, comment below or send us a tweet @MrktPlacePfm to share.