I always like hearing how entrepreneurs have managed to launch marketplace businesses. TechCrunch recently posted this interview with Michael Karnjanaprakorn of Skillshare, a platform for online education, about how they seeded and grew their marketplace.
He described two main phases in a marketplace’s journey:
Phase 1: Seeding
Where you “Roll up your sleeves up and get it done.”
Michael explains how, at Skillshare, they focused on getting teachers onto the platform as they recognised that teachers already had their own student communities who they’d be able to bring along with them. They reached out to their friends and personal contacts and tried to minimise the friction for teachers to get started, including doing non-scalable things like finding them real-world venues for the classes.
The key points from Michael are:
- Don’t try to do everything. If you can focus on one side of the marketplace and get them to bring in the other side, then do that.
- Reduce friction and get to liquidity as soon as you possibly can because once you do, powerful network effects then come into play.
- At this stage, don’t worry if what you’re doing doesn’t scale.
Phase 2: Scaling
The labour-intensive approaches used in the seeding phase tend not to scale, so you then need to transition to building things into the platform to power further growth. Skillshare are currently improving their product to deliver more value to their users and help users create content and resources that, in turn, bring in more users.
- How to get a marketplace to critical mass (my round-up of different strategies for overcoming the chicken-and-egg problem)
- Solving the “marketplace” business model (a very good post in a similar vein by Jason Cohen, a.k.a. asmartbear)
- Liquidity hacking: How to build a two-sided marketplace (by Josh Breinlinger, formerly of oDesk)
Photo by: Emilian Robert Vicol