Sofokus’ top 3 tips on how to tackle two-sided marketplace
17 Mar 2021 • Strategy & Business Design
In a two-sided marketplace, ie the supply and demand market, various pain points are often encountered, especially in the early stages of business. Pain points can paralyze an entrepreneur and slow down decision making, leaving the development of a business only for a dream. That is why we decided to tackle three most common pain points we’ve helped our clients with.
1 Stop planning and start doing
Have you ever woken up to a situation where you are planning a perfect roadmap to your dream goal, but you never find yourself taking that first step? You’re not the only one. Planning, goals, and roadmaps are an important part of reaching your goal, but sometimes you get stuck. This may be due to fear of actually doing concrete things and possibly fail while doing. What if the reality doesn’t match what you’ve long been planning?
You will never tackle two-sided marketplace nor find out if your plan was good unless you start doing concrete things. At some point, the planning just has to stop and you have to start doing. Whether it’s selling your service to a first customer or releasing your first ad, all you have to do is boldly take an action. Otherwise, you may find yourself still refining that business plan after many years.
One important thing to remember is that your plan doesn’t have to be complete, perfect, or extremely detailed. The plan is only meant to lead you forward. At best, it’s only a guess of what will take you from point A to B. Only by taking the first steps, you’ll find out whether your plan was good or not, and which areas of your business plan need to be refined. If you take too long polishing your plan, you’re just delaying the inevitable: the point where the concrete action will either validate your plan or drive you back to the drawing board.
2 Offer your service to those who want it
At the level of thought, it might be wonderful to be able to offer everything to everyone, but in reality, there aren’t many satisfiers of all needs like Amazon. And for a start-up, it’s not even necessary to be like that in order to tackle two-sided marketplace. Focus on who you want to offer your services. Start by narrowing your target audience, for example, geographically, demographically, or in another way that suits you. In the beginning, it is important to try to hit specifically in that audience that is interested in exactly what you have to offer.
You will get the best results when you limit your target audience to as small entity as you can. For example, if you offer beauty services, limit your offer to just one service at first, such as haircuts. Only when the business is on solid ground, you can gradually start to expand your offering for example to make-up and nail care services.
By precisely limiting your target audience, you can more easily make targeted advertisements, which is much more effective than just spreading a general message. Also when you know your precise audience, it makes business planning much easier too, because you know who you’re trying to reach and what kind of content you need to present to them. Once you find the right target audience, you will also find your market as well as the right place for your services or products.
3 You can get far with only pen and paper
A mighty investment in software and technology at the beginning of a business may seem like the only way to get started, but in reality, you can get far only with pen and paper. If the core of your business isn’t technology- or software-oriented, you can manage all the aspects of your business on the free platforms. For example, you can manage your CRM functions in Excel, draw a customer engagement path on paper, and write social media posts in Word. The key is only to get started, and as your business grows, you can naturally upgrade the necessary technologies as you go.
In the early stage, it is most important to just find out if anyone even wants your services or products. Worst case scenario is, that you invest in expensive tailored technologies and then you find out that the services or products you offer, don’t even interest anyone else but you. So get started with programs and technologies that you can use for free. After all, the success of a company is not determined by the technologies used, but by the business idea itself.
Pain points as a natural part of the journey
Pain points are a natural part of the journey toward the dream business and to being able to tackle two-sided marketplace. If business development were easy, everyone would do it. For this reason, we would like to remind you that various problems and dilemmas are a natural part of the growth, and we are happy to guide you throughout your journey.
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