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The hen and egg problem - on becoming a middleman when there are no participants.

Quentin Pauls

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There are some company types, where you want to act as a middleman, but neither side already exists.

I am only talking about companies that exist on the Internet, which are most companies.

Example:
You want to offer a platform where people can sell clothes and buy clothes. If you want to buy clothes, but don't find clothes that you like or there is basically no offer, you leave and don't come back. If you offer your own clothes, but nobody buys them, there is no reason to offer more clothes there, especially if you had to pay a certain amount per month for using the platform.

How do you become the middleman when there are no participants?
 

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BellaPippin

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Any marketplace that I've heard of started with the middleman hustling a lot to bring the participants to the market. But it's never a quick thing.

Not so sure if 100% relevant but @MJ DeMarco said something like that when he started his limo biz. I'm trying to remember who else it was... AirBnB? Oof. Well point being, you have to make it worth for the participants to go there.

Someone posted not too long ago making a bunch of fake accounts to post things to make it look like it had some rapport already to make it more attractive.

I myself tried a marketplace. Well, it's still there, on Facebook. Stopped working on it long ago. So yes you gotta bring the two together and it takes effort first, then if the platform is good you would expect it to slowly grow organically
 

MJ DeMarco

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This is an excellent question.

What you're describing is a 2-sided market, and yes, they are very difficult to start because it requires 2 sides for transactions, if one side is missing, the whole thing falls a part.

So you go about it by faking one side?
I wouldn't say faking, but if you can (depends on industry) you can grab public information and use that on the sell side. I remember doing that. If I had one city misrepresented, I just searched for companies and put them into the system. Naturally these companies wouldn't object as they'd get free business from me.

I focused on the sellers first (the pay side) as I felt once I acquired those folks, I could start hitting the other side. I'm guessing, regardless of industry, you will need to incentivize one side of the market.

If you can start one of these 2-sided marketplaces, kudos to you. They have significant entry barriers if you succeed and looking back, it was probably the hardest aspect of my business. Which later became an asset (entry barrier).
 

CaptainAmerica

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This is exactly what I'm trying to start, and it's difficult for all these reasons:

- known, large players
- aging/old school industry
- disconnect between people using the products and the people who pay for them

It's an industry absolutely screaming for modernization in logistics and marketing, but the starting from zero challenge is HUGE.

But when I (finally) asked some industry forum people for input (would you use this service, what would make it stand out, what's the biggest PITA?) - they all came back with detailed answers. Next up: sourcing the top 10 requests.

And, yes, my plan all along has been to incorporate freely available public information as a before/after marketing tool. Literally none of my competitors are doing that, and it's relevant. They're all going on 'we've been in business since 1972, our customers are loyal' instead of looking at 'our customers are dying/retiring in droves, we should probably market to millenials who have different purchasing habits'.

I've always been a connector - it's time to capitalize on that.
 

Andy Black

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Two sided markets eh?

Typically one side is giving money to the other. Let’s say homeowners are looking for plumbers. The homeowners have the money, and they’re handing it to plumbers.

What’s worked for me is to focus on getting good at getting the people with the money (the homeowners in this case).

If Iget a regular stream of homeowners then it doesn’t matter how many plumbers I get, because I won’t be able to get anyone to hand money to the plumbers.

So I got good at generating leads for businesses. With that skill I can earn a living as a consultant with just a few clients.

Be able to do that consistently for businesses in the same industry and you’re on your way to building a two-sided market - brick by brick.

So, IMO, “building two-sided marketplaces” can be boiled down to just connecting both sides of the market - which is a lead gen game.

How good is your lead gen game?
 
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Quentin Pauls

Quentin Pauls

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Nov 19, 2019
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(would you use this service, what would make it stand out, what's the biggest PITA?)
You do not get honest answers to those questions. Proof: Say you sold hoovers. You ask a man on the streets whether he wanted a hoover like this(you show a picture). He says yes. Then you go to your car, get out a brand new hoover and offer it to him. He will decline.

So I got good at generating leads for businesses. With that skill I can earn a living as a consultant with just a few clients.
Please elaborate on that.
 
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Im currently working on a project like this.

My plan is to fill cities one by one with sellers. (Service people) then bombard the city with ads for a while, rinse repeat
 

Andy Black

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Im currently working on a project like this.

My plan is to fill cities one by one with sellers. (Service people) then bombard the city with ads for a while, rinse repeat
Why not run ads for people looking for sellers first? Or find one seller and try to sell their service/product for them (with ads)?
 

Andy Black

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Creep

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Why not run ads for people looking for sellers first? Or find one seller and try to sell their service/product for them (with ads)?
Doesnt work with my business model. The point is to easilly compare prices and work quality between sellers. But i only need 4-5 sellers per city to start anyways
 

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Andy Black

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paymenthuddle

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Nov 13, 2019
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There are some company types, where you want to act as a middleman, but neither side already exists.

I am only talking about companies that exist on the Internet, which are most companies.

Example:
You want to offer a platform where people can sell clothes and buy clothes. If you want to buy clothes, but don't find clothes that you like or there is basically no offer, you leave and don't come back. If you offer your own clothes, but nobody buys them, there is no reason to offer more clothes there, especially if you had to pay a certain amount per month for using the platform.

How do you become the middleman when there are no participants?
Our business is a b2b online marketplace. I am a big believer in it. But I think you need to stick to an industry that you know well and have a lot of experience in. Do not try to tackle a vertical that you don't know anything about. Everyone has seen the successes of companies like Lending Tree, Orbitz and Hotwire to an extent with the travel industry and say I can do that. Is the industry you are looking to be in have a bunch of companies who have an online marketplace already? If so, is there something 'unique' that you can offer that they cannot (a better frictionless customer experience)? Can you offer more value added services that make you stand out? And lastly where do you find customers?? In our case we are a b2b online marketplace for payment processing - so we focused on high risk merchants and acquired names of those who operate in that space and direct marketed to them. We are also using 'brokers' who are in this space that represent merchants and offering them a residual fee for bringing customers to us. It's a true selling process once you build your site - but as I said before I am a huge believer in online marketplaces.. Good luck!!
 

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