The approach to the “marketplace” business model


Jason is back with another great post on market place business model. By marketplace, he refers to a platform which connects buyers and sellers who find it difficult to connect.

A few insights distilled from his post: (I must say that the full post is a MUST Read. This summary here, is not the best!)

  • The biggest problem for this kind of business is which side’s problem do you solve first? At the beginning, neither the seller or the buyer would come to you! Jason suggests, tackle the seller side first. Create the right proposition for the seller. It is easier to convince the seller to sell through you because it would anyways increase their sales. This would help you in creating an inventory, so that the buyer knows you have inventory and returns.
  • Do not automate right from the beginning. Wait for some time and find out the right things to automate. Or else, a lot of money might be wasted in automating something which may turn  out to be a wrong approach.
  • In order to get people to your site, SEO and google ads is passe, use a novel strategy like writing a useful guide or something that the chance visitor would bookmark/twitter/FB because it is genuinely useful. This would start getting eyeballs for your website!

Given the fact that my colleagues are fighting with a similar business model in different sectors. I am forced to wonder:

  • How would a platform that connects rural homestays to tourists start? What could be their “novel strategy” as mentioned by Jason? What could get more eyeballs to their website?
  • What would be novel strategy for the marketplace which connects buyers and rural artisans?
  • What would be the novel strategy for the marketplace solution which connects rural distributors of energy saving stoves with manufacturers of energy saving stoves?

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Avishek Gupta

I help drive sustainable development by financing the growth of professionally managed entrepreneurial ventures that solve key social and environmental problems. Having financed and observed over 250 ventures from close quarters, I understand the challenges that such ventures face in scaling up. I have the knowledge of process, financing and technology solutions that can help overcome those challenges. Separately, I have the experience of building businesses that finance early/growth stage companies. Most recently, I was involved with growing Caspian Debt to a full-fledged operating company from an initial 3 member fund investments team.

One thought on “The approach to the “marketplace” business model”

  1. Avishek, Jason seems to have hit at the right spot, interestingly we are following the same approach and it had worked…first two things – convincing buyers-getting inventory and second step by step automation. Now the bigger challenge we face is creating a pull factor in the first place so that people come searching for you…

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