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  • Writer's pictureDarren Cody

What Goes Into Planning a Marketplace?




Introduction

Have you ever held a dream so vividly in your heart, envisioning a marketplace that revolutionizes the way people connect and transact online? That was me, armed with nothing but a vision and a burning desire to make a difference. The journey from dream to reality was more than just a path; it was a rollercoaster of highs and lows, discoveries, and, frankly, some humbling moments.


Remembering the day we launched our app without a website, I was brimming with confidence. I thought we had it all figured out. 'Build it, and they will come,' I believed, convinced that my deep industry knowledge meant we could skip right past the need for user feedback. Oh, how wrong I was. Watching a user fumble through their first booking on our app, the confusion clouding their face, was a moment of sheer embarrassment for me. There I was, the 'industry expert,' forced to intervene and complete a booking for them. It was a stark, uncomfortable realization that no amount of expertise could substitute for real, user-centric design and feedback.


This humbling experience was the wake-up call I needed, sparking a transformative journey into the heart of building a successful marketplace. Through this blog series, I invite you to join me on this adventure. We'll dive deep into the crucial lessons learned, from the importance of understanding your audience to the iterative magic of refining your product based on real user feedback.


For anyone standing on the brink of launching their marketplace, or for the curious minds wondering about the behind-the-scenes of such a venture, this series is for you. We'll cover everything from the emotional rollercoaster of responding to user needs, to the practical steps of designing an MVP that truly resonates. You'll hear firsthand about the mistakes made, the lessons learned, and how we turned those insights into a platform that not only meets but exceeds user expectations.


So, if you're googling 'how to launch a successful marketplace' or 'lessons learned from marketplace failures,' look no further. You're about to embark on a journey filled with honest reflections, practical advice, and, yes, a bit of vulnerability from my side. Let's explore together how to navigate the complex but rewarding process of bringing a marketplace to life, with a user-first approach at its heart. Together, we'll transform your vision into a thriving reality, learning from the past to build a brighter, more successful future.


First Step - Research & Planning Before Anything Else

Picture this: you're gearing up to host the soiree of the century. You dream of an evening where the ambiance is just right, the cuisine is delectable, and every attendee departs with unforgettable memories. The path to this perfect party doesn't begin with dispatching invitations or choosing the venue. It all starts with diligent planning and research.


In the early days of our app, our confidence was sky-high. Knowing the industry inside out, we assumed the app's features would be self-explanatory, even down to details as nuanced as button labels or page titles. "Logistics" seemed obvious to us, industry insiders, but what about our main audience? We soon realized the gap in our thinking. Would "Pickup & Delivery" have been more straightforward to our early users?


This oversight extended to our decision to launch a mobile app first, neglecting considerations such as how users discover new platforms organically or the role of Search Engine Optimization. It wasn't long before the feedback came in loud and clear: our users were looking for a web presence.


Planning The Party

Similar to brainstorming your party's guest list, theme, and overall vibe, crafting a marketplace starts with understanding who you're serving, their preferences, and the experience you wish to offer. This phase is about pinpointing precise goals and desired outcomes for your platform. Without this groundwork, your marketplace, akin to a party without direction or focus, might quickly fade into obscurity.


Researching Before The Party

Imagine the meticulousness required in party prep. You wouldn't choose the menu without considering guests' dietary needs or select a band without confirming they fit the musical taste of your audience. Similarly, unveiling a marketplace demands an in-depth exploration of potential users' behaviors, challenges, and current solutions. It's about grasping the competitive scene, gauging demand for your offerings, and spotting opportunities for differentiation. Armed with this insight, you're better positioned to make strategic choices, just as tailored planning ensures your party is a sensation.


Why Plan The Party?

Thorough planning and research lay the groundwork for a marketplace that truly resonates with its users. Overlooking these initial steps is like hosting a gathering without knowing the attendees' preferences—leading to a well-intended but mismatched event. A memorable party—and by extension, a successful marketplace—is built on a foundation of understanding and catering to the needs of its audience.


Who Are Your Early Adopters?

A persona is essentially a detailed profile representing your ideal customer, constructed from market research and actual data on your target audience. It includes comprehensive insights into their lifestyle, motivations, aspirations, and hurdles. Picture a persona as the guest of honour at your event—the one you go the extra mile for to ensure they have an unparalleled experience.


Defining the early adopter persona for your marketplace means honing in on the traits, desires, and habits of the users most likely to embrace your platform initially. These pioneers, open to new experiences, will provide crucial feedback for refining your service.


Gathering Insights

Embark on a deep dive to learn about these early adopters through both qualitative and quantitative research—think surveys, in-depth interviews, social media analysis, and data review from analogous offerings. It's akin to uncovering your guest of honour's favourite music genre to ensure the evening's playlist is spot-on.


Their Common Themes

Identify recurring patterns in your data. What shared aspirations, obstacles, and interests emerge among your potential early users? If your findings suggest a love for classic rock among your VIPs, then that theme should underscore your event to keep the energy high and engagement deep.


The Dedicated Persona

With these insights, flesh out your early adopter persona. Assign them a name, occupation, and backstory, making them as lifelike as possible. This approach fosters empathy and keeps your target users' preferences central to your marketplace's design and feature set. If "Rockin' Randy" epitomizes your persona, then every aspect of your platform should appeal to Randy and similar users, ensuring their needs and expectations are met.


Your Market & Understanding It

As a founder, the drive to launch a marketplace often stems from a deep-seated passion for your industry or a frustrating gap in existing solutions that you're eager to fill. However, a burning desire to innovate doesn't automatically mean the market is primed for what you have to offer. Reflecting on our own journey, we launched a bit too soon, facing the challenging task of educating consumers to shift from buying to renting—a clear testament that market readiness can vary widely.


Imagine you've planned the ultimate party, down to the last detail, only to realize you've thrown a winter wonderland bash in the height of summer. The disconnect between your vision and the guests' expectations is palpable. Just as seasonal timing is key to a party's success, aligning your marketplace launch with market readiness is crucial. It's not enough to know the industry inside out; understanding when the market is ready to embrace your innovation is just as vital.


Carving Out Your Niche

Deciding on your marketplace's niche is akin to choosing your party's theme. It's what makes your platform stand out, drawing in a specific crowd that resonates with your unique offering. Whether it's the elegance of a Gatsby-themed soirée or the laid-back vibe of a beach bonfire, your marketplace should cater to a segment of the market that's not just in need of your services but is genuinely passionate about them. This is about creating a special connection with a particular group, filling a gap in the market with an experience that resonates deeply with your users.


Re-Thinking Your Market Share Goals

Claiming a 5% stake in a billion-dollar market might sound ambitious, but without a grounded strategy, it's as vague as promising the party of the century with no plan in place. Success lies in the specifics—understanding who your users are, why they'll choose your marketplace, and how you'll reach them. It's about creating a deep connection with your market, not just skimming the surface.


This approach underpins your Go-To-Market strategy, which should be more than lofty ambitions. By adopting what we term 'Traction Forecasting,' you anchor your marketplace's growth in reality. This method involves detailed planning, from conversion benchmarks across all stages of the user journey to monthly traffic growth fueled by precise execution plans. It shifts the narrative from a hopeful "If we capture X, we'll secure 5% of the market" to a confident "We will achieve X by executing strategies A, B, and C within specified timelines."


Market Landscape

Understanding your market landscape is like being aware of all the other parties in town—what's going to make yours the standout event? Is it an exclusive guest list, a gourmet feast, or an unbeatable setting? This stage demands a thorough analysis of your competitors, an identification of market trends, and an understanding of the broader ecosystem your marketplace will inhabit. It's not merely about being different but about offering something truly better or more appealing to your target niche.


An essential factor to consider is the current solutions your potential customers are using and how much they're willing to deviate to address their needs more effectively. If people are accustomed to renting SUP boards on a platform like Facebook Marketplace, integrating trust and safety features into your marketplace could be a significant value add. However, if there's a dominant player already capturing your intended market, innovation should be thoughtful. It's crucial to distinguish your platform without alienating users accustomed to existing solutions.


Validation - Meeting Real Pain

When embarking on the journey to create a marketplace, it’s like you’re hosting a party not just because you love the theme, but because you believe it's what people need—even if they don't know it yet. You might have heard responses like, “Yeah, I had that same idea years ago,” or “Wow, I love that idea, it really aligns with becoming carbon zero.” These reactions are affirming; they suggest your idea resonates on some level. However, the real validation lies not just in agreement but in addressing a genuine need—finding out if people are willing to pay for your solution to their problem. It’s not enough to validate the concept; you need to confirm that your marketplace effectively solves a significant pain point and assess the extent of friction users are willing to tolerate.


Asking If Others Have The Same Pain - Would They Pay to Solve It

Picture yourself deciding on the perfect party theme. Before diving into preparations, you poll your friends. Is this something they’d genuinely enjoy? Would they commit their time (and possibly money) to attend? This mirrors marketplace validation. It’s about reaching out to potential early adopters and presenting your solution, not just to gauge interest but to measure the depth of their need and their willingness to engage financially. Their enthusiasm—or lack thereof—provides the first hints whether you’re on the right track.


Gather Qualitative & Quantitative Feedback

Diving deeper involves collecting both qualitative and quantitative feedback. Qualitative feedback, akin to the personal stories and preferences shared in party conversations, uncovers the "why" behind potential users’ interest. It gives color and context to their needs and how your marketplace might meet them. Quantitative feedback, on the other hand, is like counting RSVPs. It offers hard data on how widespread the pain point is, its frequency, and what users are willing to spend to alleviate it. Together, these feedback types build a comprehensive picture of demand and market readiness.


Before you have a user base to analyze with tools like Pendo or Mixpanel, prototypes offer a valuable pre-launch window into user reactions and expectations. Think of a prototype as your "party preview"—an invitation to experience the vibe before the main event. Tools like Helio or User Interviews can facilitate this exploration, allowing you to test concepts with your target audience without the need for full development.


Yet, remember, the essence of validation isn’t solely in what users think about your platform’s user experience; it’s in the insights gathered from how they interact with it and the questions you ask. The timing and framing of your questions can dramatically influence the feedback you receive, shaping your understanding of what truly resonates.


A Simplified Validation Process

  1. Identify Your Early Adopters: Pinpoint those who are most impacted by the pain your marketplace aims to solve.

  2. Engage Directly: Use a mix of surveys, interviews, and conversations to delve into their experiences and expectations.

  3. Present Your Solution Clearly: Communicate the value and functionality of your marketplace succinctly, focusing on how it addresses their needs.

  4. Ask the Critical Questions: Determine not only if they recognize the problem but also if they see your solution as viable and worth paying for.

  5. Analyze and Act on Feedback: Search for patterns and insights in the feedback to refine your approach, being ready to adjust based on what you learn.



Validation - Your Beginning North Star

In your quest to build a marketplace, think of validation as your North Star—guiding you towards creating a platform that truly meets the needs of your target market. Foregoing this crucial step is akin to throwing a party without knowing if the concept will resonate with your guests. It's a gamble that can result in wasted time, effort, and resources. By prioritizing validation, you ensure that your marketplace is more than just a well-meaning idea; it's a sought-after solution. Armed with this confidence, you’re not merely hoping your users will appreciate your offering; you’re building it with the certainty that it’s precisely what they’ve been waiting for.


Iteration - It Can Become Better

Think back to when you first started any new activity. Whether it was learning to ride a bike, cooking, or even something as mundane as organizing your workspace, the principle remains the same: practice leads to improvement. You adjust, adapt, and refine your approach with each attempt. This natural progression from a rough beginning to a polished skill mirrors the iterative process in developing a marketplace.


Adam Grant, in his insightful book Think Again, champions the notion of thinking like a scientist. He suggests adopting a cycle of hypothesizing, testing, reviewing results, and then iterating on those hypotheses. This methodical approach isn't just for the laboratory; it's a powerful framework for marketplace founders. Approaching your platform's development with this scientific mindset encourages openness to feedback, both the tough and the glowing, guiding your project towards success.


Your First Version is Not the Launchable Version

Imagine sending out the first draft of an invitation to your meticulously planned party. It has the basic details but lacks the polish and excitement that inspire people to attend. Similarly, the initial build of your marketplace is like this rough draft. It's a starting point, an early manifestation of your vision, but not the finished product that will fully engage your audience.


This version is invaluable for gathering initial feedback, which will inform the successive iterations that mold your marketplace into something launch-ready. Embrace the imperfection of your first attempt; it’s the foundation on which success is built.


We Should Probably Test Again

After implementing changes based on initial feedback, resist the urge to declare your platform final. Iteration is a commitment to continuous evolution, akin to fine-tuning your party based on guest feedback to ensure the ultimate experience. Re-engage with your early adopters, presenting the updated version of your marketplace. Watch their interactions, solicit their honest feedback, and be vigilant for emerging challenges or pain points.


A Simplified Approach to Iteration

  1. Gather Feedback: Post-launch or prototype testing, collect comprehensive user feedback.

  2. Analyze & Prioritize: Identify common feedback themes, prioritizing adjustments based on impact and feasibility.

  3. Implement Changes: Refine your marketplace, focusing on user experience and addressing the most critical feedback first.

  4. Re-test: Present the updated version to users, observing the effects of your changes and gathering further feedback.

  5. Refine & Repeat: Continue refining based on new insights, repeating this cycle until your platform aligns with user needs and expectations.


Why Iterating Brings Out The Excellent

Iteration transcends being merely a step in development—it embodies a philosophy of continuous growth and improvement. Recognizing your first version as a preliminary step liberates you from the quest for initial perfection, fostering an environment where real progress can occur. It's through this iterative dialogue—this ongoing conversation with your users—that your marketplace evolves from a concept to a community.


As you refine and enhance your platform, remember that iteration is the heartbeat of innovation. Like the most memorable parties that grow from simple gatherings into talked-about events, your marketplace will mature, becoming more intuitive, engaging, and successful with each iteration. This journey of improvement isn’t just a path to a better product; it’s the road to creating a marketplace that stands the test of time and changes lives.


MVPs Aren’t What They Used to Be

The landscape for Minimum Viable Products has dramatically evolved. In an era where users interact daily with platforms developed by unicorn companies, the benchmark for an MVP has risen substantially. If Airbnb attempted to launch its original MVP today—a simple directory without online payments—it might struggle to gain traction. Users now expect a seamless, intuitive experience from the get-go, influenced by their regular interactions with apps for social media, ride-sharing, grocery delivery, shopping, and online dating. These platforms, backed by substantial development budgets (millions of dollars), set a high standard for UX that new marketplaces must consider.


Iterating On Your MVP Strategy

In this environment, your MVP needs to be more than just viable; it must also captivate and engage. This doesn't mean you should aim to match the feature set of established players out of the gate. Instead, focus on delivering a polished, user-friendly experience that addresses a specific need or pain point exceptionally well. Your MVP should offer a core functionality that is both reliable and delightful to use, even if it's on a smaller scale than the offerings of larger companies.


A Roadmap For Early Adoption & Growth

Creating a roadmap that outlines how you'll introduce and evolve your marketplace is crucial. This plan should detail:


  1. Initial Launch: Define what core feature set will make your MVP stand out, even in its simplicity. This could be a unique value proposition, a niche market focus, or an innovative approach to a common problem.


  1. User Segments and Cohorts: Identify which user groups are most likely to be your early adopters. Tailor your MVP's features and marketing efforts to meet their specific needs and expectations.


  1. Phased Feature Rollout: Plan for incremental updates that will introduce new features, improve the user experience, and expand your service offerings. Each update should be based on user feedback and market demand, ensuring that your platform evolves in alignment with user needs.


  1. Scalability and UX Improvements: As your user base grows, so will expectations for your platform's performance and features. Include milestones for scaling your infrastructure and continuously refining the UX to keep pace with competitors.


Phase 1: The Elevated MVP

This phase is about proving your concept with a polished, albeit focused, set of features that resonate with your target users. The key is to launch with enough flair to captivate early adopters while maintaining the agility to iterate based on feedback. Again, focused on early adopters, typically, these users become your strongest advocates and have the highest bug tolerance threshold.

Phase 2: Engagement and Iteration

With a successful MVP launch, the focus shifts to deepening user engagement, refining existing features, and introducing new ones based on collected insights. This phase is about building momentum and preparing for broader market penetration. This is the time to incorporate adoption analytic tools like Pendo or Mixpanel that are layered above your SEO tools (Google Analytics, etc.)



Phase 3: Scaling and Expansion

Having established a solid user base and a product that meets their needs, it's time to scale. This phase involves expanding to new markets or user segments, broadening your feature set, and ensuring your infrastructure can handle increased demand.


Conclusion: Building a Marketplace, A Journey of Insight and Iteration

Recap

We started this journey by understanding the importance of Research and Planning, recognizing that like planning a memorable party, knowing your audience and their preferences sets the stage for success. We discussed how Validation is crucial, not just for confirming the existence of a pain point but for ensuring that your solution is something users are willing to pay for. The evolution of MVPs reflects the heightened expectations of users today, necessitating a product that’s not only functional but polished and user-friendly from the start.


Iteration emerged as a theme of continuous improvement, a process where feedback is the gold that refines your offering, ensuring that each version is better than the last. We navigated through the Phases of Development, from launching an MVP that addresses a core need in an engaging way to scaling the product and expanding its reach.


Final Thoughts

The journey of creating a marketplace is akin to assembling a puzzle. Each piece, from validating your idea to iterating your product and scaling your business, plays a pivotal role in the larger picture. The landscape of digital marketplaces is both vast and nuanced, with user expectations continuously evolving and new technologies emerging.


In navigating this landscape, remember that your greatest assets are your flexibility and willingness to learn. Stay attuned to the needs of your users, be ready to pivot when necessary, and always keep the dialogue open. Building a marketplace is not a linear path but a cycle of learning, adapting, and growing.


As we wrap up this series, take these insights as your compass. They are designed to guide you through the complexities of marketplace creation, from ideation to launch and beyond. But the most important takeaway is this: the process of building a marketplace is a dynamic and ongoing journey. It’s filled with challenges, but each challenge is an opportunity to innovate and refine your vision.


Your marketplace is more than a platform; it's a community, a solution, and a stepping stone to transforming how people interact with the world around them. Embrace the journey, celebrate the milestones, and remember that every iteration brings you closer to realizing your vision.


Whether you’re just starting out or are in the midst of scaling your platform, keep pushing forward. The landscape is constantly changing, and with each change comes new opportunities. Your marketplace has the potential to not just succeed but to redefine its niche, create value, and leave a lasting impact.


Here’s to building something truly remarkable.


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