Building a marketplace is not rainbows and unicorns. You’ll have to sweat your guts out to make it work.
You know exactly how it happens.
One day you just wake up with a stunning startup idea in your head. You ponder over it and realise that this is it – your very best chance to launch a digital marketplace.
And you do your homework, analyse the market, create MVPs, design and develop the platform … But then, nothing. You fail.
Today, I’m going to interview Sergey Grybniak, a digital marketing guru and founder and CEO at Clever-Solution.com and Singree, to figure it out. He has over 10 years of marketplace promotion experience.
Today, Sergey is going to answer my questions about the most typical mistakes startup owners make on their way to success. Let’s dig in.
Sergey, what’s the most common marketplace building mistake?
The obvious one is this: thinking that launching your own online marketplace is easy. Because in reality nothing could be farther from the truth.
It’s hard to come up with a viable marketplace idea. It’s hard to design, develop and launch the platform… Needless to say, it takes years to grow any marketplace. Even Uber wasn’t an instant success.
In short, building a marketplace is not rainbows and unicorns. You’ll have to sweat your guts out to make it work.
I see. But what if you’ve launched a marketplace, after all? Any pitfalls in store?
Absolutely. There’s a fine line between getting your marketplace and actually growing it to the-next-big-thing status.
I mean, you’ve launched it. So what? You don’t have any product suppliers or service providers. You don’t have any customers yet. You need to market your marketplace to have mass appeal.
Don’t get me wrong. The overwhelming majority of marketplace owners are aware of the digital marketing part. They invest dozens of thousands of dollars in driving traffic to their platforms, generating content, using PPC ads, doing SEO, etc.
But here’s the problem: When suppliers and customers start pouring in, it turns out that the platform isn’t ready at all. A failure to strategise for a big project is a serious mistake.
Basically, you should know beforehand how to scale your marketplace according to the demand and supply. Not to mention, you need to make sure that all critical bugs are fixed before your start spending your marketing dollars.
Are you so sure that marketplace owners are doing marketing right?
I didn’t say that.
In most cases, startup people just know that it’s impossible to move the needle without digital marketing. That’s all.
As to mistakes, they make lots of them… In SEO, PPC, SMM, content & email marketing, and so on.
What’s the most mission-critical mistake?
It depends. But my first guess is, they fail to educate the audience.
A marketplace isn’t just a platform where multiple third parties offer their products and services. It should be used for educating people as well.
For instance, Carvoy.com, a car-leasing marketplace from NYC, has just launched an Edu Center where they educate prospects, leads and customers about benefits of leasing a car online.
Why? Because in reality people don’t know much about car leasing. Carvoy staff share their knowledge and expertise to increase customer loyalty and improve conversion rates.
And it works perfectly well for any marketplace or startup. Just educate people about what you do to put your business in the fast lane.
And what do you think about niche-focused marketplaces? Are they more prone to mistakes?
I’m positive that niche-focused marketplaces are here to stay. And if you want to start one, you’re free to do so.
As to the mistake part, it depends. But I can say for sure that ‘broad’-type marketplaces are much harder to run successfully.
Let’s say you have a travel-focused marketplace like Vericost or Rome2rio. Their goal is simple: help travellers get to any destination on the map. There’s no limit to what you can accomplish with those two.
And you know why?
Because you don’t have to ping-pong between multiple industries. You just invest all your resources to rank up high with travel-related keywords. You crank out content, purchase PPC ads, share useful stuff on travel-related groups on social networks, create an email list to show off your special products and promotions, etc.
Is launching a ‘broad’-type marketplace a mistake, then?
Well, going too broad without focus is definitely a mistake.
You’ll just have to spend dozens of thousands of marketing dollars to push boundaries for your marketplace. Being relevant to a wider group of people is fine, as long as you have the resources and capabilities to somehow reach them.
And, more than that, ‘broad’ may mean that your platform serves no purpose at all. Success doesn’t come out of nowhere like a thunderbolt – you need to spend some time to find the sweet spot for your marketplace.
For instance, Opporty.com is a ‘broad’-type marketplace, but it serves startups, small and mid-sized companies. Not only its business model but also its digital marketing campaign are both focused on catering to the needs of small business owners.
I see. Any other mistakes?
It’s quite a cliché phrase, but problems happen. The only thing that makes the difference is how you solve them, right?
When it comes to running a business, nothing is worse than poor risk management. Even a teeny-tiny mistake on your part can cause a media storm. So you should always have a plan to get out of the rut.
Why is that so important?
You need to show all the parties involved (providers, suppliers, customers) that you value their time and money. Basically, by efficiently resolving any problem ASAP, you build brand loyalty and guarantee positive press coverage.
Any thoughts to wrap up the interview?
Any startup founder knows that he or she will face different challenges. And I’m not going to dissuade you.
Launching and growing a marketplace is the top challenge for any businessman. You’ll have to dedicate lots of time and resources to market analysis, design & development, testing, and promotion.
Make sure you do your research, invest in your marketing when the time is right, and always have a backup plan.
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