If you have been playing with the idea of creating a marketplace you probably have heard about the chicken and egg problem. It’s probably the hardest issue to overcome while jump-starting an online marketplace.
Once solved, it can represent a solid barrier to entry that keeps your potential competition/wantrepreneurs at bay.
The chicken and egg problem simply put is how to attract customers when you don’t have an abundance of suppliers? On the other side: how to attract suppliers when you don’t already have the customers? Overlooking this issue could be fatal when you are starting from scratch.
I share with you 3 simple ideas, but hard to implement, that can help you overcome this issue. I also give you examples of companies doing it the right way. Like anything in life, these solutions are standing behind great effort and patience. I am not talking about quick tips and miracle making.
Start with content
To overcome the buyers' side of the issue you need to attract potential costumers to your marketplace. The cheapest way to do it is to create useful content for your target. It can be long-form articles, YouTube videos or a podcast. As long as it’s helpful for your potential customer there is a good chance they will find your content. This strategy is effective but time-consuming and slow to pay back. Before throwing resources at it you need to have these two key elements figured out.
You need to have a good understanding of who is the potential buyer for your marketplace and answer the questions he might have in any stage of his buying decision process.
You need to engage a conversation once they consumed your content, by asking them to join your mailing list or your social media profiles, and keep providing engaging and relevant content.
Once you have a solid base of visitors tuned in to your content, you can use that audience to attract sellers who can serve their needs and then launch your marketplace.
This strategy works best for audiences who have lots of questions to be answered, think engineers, creators, developers, consultants…
A good example of this method is what the best selling author Mike Michalowicz did. He is creating engaging content on his blog and his podcast. He uses these platforms to promotes his books targeted toward entrepreneurs. Then with this captive audience, he found suppliers who were willing to provide coaching or services, like accounting, to them.
Create a community
This is a natural next step after creating a content platform attracting a particular audience. However, it is possible to create a community without writing long-form articles or videos, with Instagram, Facebook or other social media you can manage to create a community around a shared passion or a cause.
However, there is an important condition to ensure the success of this strategy. The community needs to be based on a love or hate subject. Because subjects that are dividing the opinion work well for building communities. Think about how Uber leveraged the hate of Taxis poor quality service. It cannot be objective or rational. Rational is boring and doesn’t entice action. Biased and passionate posts will help you build an engaged and faithful community.
Organize real life events
Most online business founders forget one critical point regarding their business: as long as your business doesn’t have an impact on people’s real life, it doesn’t exist. Creating real life events is somehow reverse engineering the process. You start by having a real impact on peoples lives, then you build a marketplace to better serve their needs.
What’s the most primitive form of marketplace you can think off? Me I think of farmers market. A bunch of different suppliers serving a bunch of clients. There are many ways to use this idea, you can organize concerts, fairs or conferences on a particular subject.
Those events need to bring real value to your target. Otherwise, nobody will show up, therefore the challenge here is to find the speakers, the artists or attractions that will motivate people to come to your event.
Once this figured out, you need to make sure you have a way to capture peoples emails or get them to engage with you on social media. Using online booking services like Eventbrite or hashtags related to your event will help you with that. Giveaways are also effective to capture participants emails.
As previously announced, these solutions are not quick fixes. I believe they are the most powerful ways to get your online marketplace from idea to reality.