Molly St. Louis
May 8th, 2019
3 Genius Growth Hacks for New Marketplaces
Here’s the basic premise:
Marketplaces are double sided, with both a “supply” and “demand” side. In order to get buyers on the demand side to transact on your site, you need enough sellers on the supply side. But how do you get sellers on the supply side to join your platform without knowing there are buyers?
Therein lies the challenge.
Classic Example: Match.com
When Fran Maier co-founded online dating platform, Match.com, her main challenge was getting users to join so that everyone had a large pool of possible matches to choose from.
It became clear very early on that she could get men to join the platform, as long as she had a healthy database of women. But women were tougher to get. Remember, this was the mid-nineties when the internet was still a new concept to many people. Women in particular didn’t tend to like the idea of going online to find a date, mostly for fear they’d get a bunch of unwanted attention from shady guys with one thing on their minds.
Fran and her team had their work cut out for them. They needed to develop the right kind of community of people who were all looking for meaningful relationships. The big “aha” for Match was turning the service into a subscription model. If users had to make a financial commitment, it would strongly suggest that they were on the site for the right reasons.
This act inspired more confidence in the women, the “supply” side in this scenario, and more of them joined. The “demand side” (the men), quickly followed suit and eventually, Match.com became the top dating site in the US. Today, they still dominate the industry and own other major dating apps like Tinder.
Conquering the Chicken and the Egg Challenge!
Fran has long since left Match.com and moved on to tackling even tougher marketplaces. She is currently the CEO of BabyQuip, a sharing economy platform providing baby gear for traveling parents. With BabyQuip, moms and dads no longer have to lug around cumbersome baby equipment while traveling; they simply rent it from a local parent for a small fee.
Under Fran’s leadership, BabyQuip went from 4 to 400 markets in under three years and is on track to double revenue in 2019. As she did with Match, Fran had to develop some growth hacks to get ahead. We caught up with her at the Marketplace Conference and she told us what was working:
Growth Hacks You Need to Try
- Invest in Your Providers (Supply Side). The best way to keep providers doing business on your platform is to make them more successful – especially when it comes to beefing up the “supply” side of the marketplace. A company like BabyQuip thrives on how many products are available for rent. In some cases, a provider may only have two or three pieces, which is not inspiring to a parent looking to find gear for their children. So, BabyQuip encouraged providers to list equipment they didn’t own yet. Then, when someone wanted to rent that piece, the Provider would take that money and use it to buy the equipment, thereby expanding their inventory and opportunity for more revenue.
- Build a Self-Sustaining Community. It is human nature to want to be a part of something bigger than yourself – or at least have some fun with people who share your interests. BabyQuip developed a community of providers or suppliers who share ideas and support each other through online forums. Many stay-at-home moms on the platform see this as a fun outlet and also find a sense of empowerment to grow their earning potential. Naturally, this good feeling caused them to become advocates for the brand.
- Incentivize Your Best Providers. Everyone wants to feel like their work matters and that they are doing a good job. Marketplace suppliers are no different. BabyQuip saw a spike in user activity when the company rolled out a Provider appreciation initiative that recognized those who went above and beyond for their customers. Additionally, the company continuously recognizes the anniversaries of those who have remained loyal to the platform. This shows that the company truly cares about its providers.
When you run a marketplace, you are always navigating a competitive landscape, so it is imperative to find your own growth hacks. As you figure out your own chicken and the egg challenge, ask yourself what is driving customers to stay on your platform, rather than going somewhere else? You need to have a great answer for that question and continuously revisit it over and over again. Your marketplace is only as good as its supply side and keeping your providers happy is the best growth hack you can deploy.