Download our Guide How to Build a Marketplace in 10 weeks / 🇺🇦 Stand with Ukraine donate x
An idea without a product is just a dream. Take Airbnb, for example. They had the idea of allowing people to rent out their properties to strangers when they weren't using them. But they didn't have anything until they built a website and a mobile app to facilitate payments.
Generating a great marketplace idea is not as easy as one would think. As people use these apps and services on a day-to-day basis, they couldn't think of the function that can make their life better. Take Uber for example, if you didn't have access to your car or don't trust taxis, you wouldn't know what Uber could potentially do for you. This is why we gather information about the industry and find trends in user behavior. Identifying these problems in user behavior help us come up with innovative solutions that can exploit these problems, help us predict how a certain technology could be applied to solve them or create new products altogether.
In this article we will cover all aspects you need to create successful marketplace idea.
Table of content:
You might be surprised to find out how many existing online business possibilities you have. Take a second and think about your business model. How do you make money?
You could be a mediator, bringing together people that need your services and those who provide them. For example, you could be a consultant for someone looking for a specific service, and then find the provider for them. Instead of having them do all the work of finding each other, you can handle it for them and save them some time in the process. They'll get customers from internet presence and you'll bring in another income stream.
Marketplace platform would be saving yourself time by not having to set up communication between the two parties. Marketplace business model will focus on the customer base you've built. Word of mouth and search engines are great ways to bring in new customers, and your existing customers will continue to come back for repeat purchases. New providers will start finding you because they've heard about your service and want to earn money with it.
In this case, you don't need to do all of the heavy lifting from scratch with marketplace idea validation, business is already generating revenue. You can just take your existing community and turn it into the marketplace that they've been asking for.
The marketplace for you on this stage is just another way to expand your business—it's not a separate product or service that you have to create from scratch.
In general, the driver in creating a marketplace is contacts. If you have a large enough community in social networks to implement a marketplace, we have good news - you have a solid foundation for building a marketplace platform.
In this case, you act as an intermediary, for example, in a group where people are looking for car services and others are providing them. Your main goal and overall idea is to bring two parties together to communicate/do business with each other.
However, in this case you don't get any money for bringing the two parties together, you still need to validate the idea with your contacts. Would it be convenient for buyers and providers to work in such a business model? Are providers willing to pay commissions for each transaction or for registration in your marketplace? Do buyers need to have a separate marketplace for this type of purchase?
The matter is small: You already have an idea and contacts - it remains only to validate it.
We know what you're thinking: "But how do I get people to pay me commissions?" Well, there are a lot of ways to go about it. Some people like to charge per transaction, and others prefer monthly fees for registration on their marketplace platforms. The important thing is that you do what works best for your community and your business model—and that's the beauty of building a marketplace! You can read about marketplace business models in our previous article and choose the best for your case.
A lot of people think that every new idea is great, but honestly it can be false. Why? Because users don't need it. They don't know about real people problems.
In general, we can say that there are two types of people: those who want to solve their own problems and those who want to solve other people's problems. The first type of person will develop what they want, while the second type will develop something that other people need and want.
You need to think about people problems and ask yourself:
-Is it really needed?
-Will users pay for this?
-Who will use it?
First off—and this is really important—remember that no one actually knows what their users need better than their users do! So be sure to ask them what problems they have, and how they'd like those problems solved. If you don't know where to start, try looking at some of the most popular online forums for your target demographic and see if there are any discussions about common frustrations or needs in the industry. You might be surprised by how much insight is out there just waiting for someone like you!
Once you've gotten some ideas from your users about what their needs are and how they would like them addressed (or not addressed), then we can start talking about coming up with a solution. For example: maybe one user said that they wish there was an easier way to find information about products without having to go through all sorts of.
Talk to people who are similar to your target users. If you're building an app for moms who want to find local babysitters, then talk to moms who are in their late 30s or early 40s and raising kids at home. Find out what problems they have with finding babysitting services—are there too many options? Do they feel like they don't know who's trustworthy? Are there too many ads?
These conversations will help guide your thinking about what features are most important for your app, and what would be useful for users.
Examples of marketplace problem statements
The best way to beat the competition is to create a better product than the one you're competing against.
This may sound like a no-brainer, but it's not always easy to do. In fact, it can be pretty difficult to stay ahead of the curve when everyone else is trying to outdo you.
When you're thinking about improving an existing marketplace solution, it's important to remember that businesses come and go—and products are competitive as long as they evolve and listen to the needs of their users. If your competitor has problems with this and users are increasingly complaining about the lack of some features, this is a great chance to create the same product, but with all the necessary features.
It's also a good idea to take a big broad marketplace with different categories and choose a category for your marketplace personally. For example, if we take a Craiglist, we will see that most of the categories today have their own separate marketplaces.
Communities, sales, services – that’s all already created but in separate products, such as Ebay, Fiverr, Airbnb, etc.
The same thing you can do with other marketplaces dividing them by little online markets.
It's significant to understand that you are dependent on contacts. For example, if you're launching rental marketplace platform, it's better to start from one region.
There're two reasons why.
1) The main goal of this marketplace is to match the right people together to provide and get services. It would be strange to gather providers and buyers from different cities, because they will not be able to make a successful deal.
2) It's easier for you to gain contacts in your city instead of collecting them from all the world.
If you want to expand your business or create another platform, it's important that you understand how important it is for you to consider how much time it will take for you to gather new contacts and how many resources are required for this purpose.
It's important to make sure that you have both sides of the marketplace in your model. You need vendors who are interested in publishing, and you need users who are interested in buying.
That's why, when you're validating your idea, it's important to collect feedback from both sides of the marketplace. If there isn't enough interest from either party—if vendors aren't interested in publishing or users aren't interested in buying—then there won't be any profit.
It's a challenge for interpreters to choose the right type of focus. When you're starting out, it's tempting to try to be all things to all people. But sometimes it's better to narrow your focus—not just because it makes sense in terms of staying focused (which is important), but also because it can help you build a loyal customer base that will keep coming back for years.
Keep in mind that a horizontal focus doesn't always mean a big revenue stream.
You can avoid pitfalls like this by looking at some of the biggest companies out there right now: Amazon started by only selling books; Airbnb started by offering accommodation specifically for designers who were attending a specific conference in San Francisco. You might not be able to start with such a narrow focus right away, but once you've found yourself a niche—whether it's selling books or providing designer hotel rooms—you'll be well on your way toward building a successful business!
With every great idea, there's a moment of joy, followed by a moment of panic. You start thinking: "Is this idea any good?" And then you think: "Someone else is probably already working on it."
Most of the time, this natural reaction is completely true. The best ideas usually come to multiple people at the same time. But do not despair! As we discussed above, one good way to combat competition is to narrow your focus and make sure that your product or service solves a problem for a specific segment of users.
Even though you should not be discouraged by competition, it is still a priority to take a quick look at the market to see how others are trying to solve the same problem you have identified.
Listen to a podcast below to see how great ideas for Airbnb, Coinbase and Stripe originated.
First, look at your target audience. Do they have the money and time to spend on your product? If so, what problem are they trying to solve? What would make their lives easier? Can you help them with this?
If the answer is yes, then it's time to dig deeper into your market research. First, go where your target audience is hanging out. This could be a site like Reddit, Facebook groups, Quora, or an online forum. What are people talking about? What are their biggest pains and fears? That’s information you can use to make your idea even better.
Then interview people in your target audience (over the phone or in person). So, jump on the phone with them or meet up for a coffee and ask them questions about your business idea. Note: You shouldn’t ask if they would use your platform (most of them will say yes to be nice to you!) but instead ask them about their problems.
For get started you can use this template from Hubspot team Target Audience: How to Find Yours [+ 5 Campaign Examples]
One of the biggest fears you have is this: that you'll enter a crowded market and make it impossible for yourself to stand out.
Well, we've got good news and bad news for you. The good news is that competition is often a sign that there's a market for your idea—even if there are other marketplaces serving the same audience as you, you can stand out with your marketplace by offering better service, more options, or better prices. Or maybe serve a specific niche within that audience (like a local community).
The bad news? You need to research your competition so that you can be sure that your niche CAN be profitable! And how can you do that?
First off, make competitors research. Once you've found some competitors in your niche—and there will always be some competition in any profitable niche—you just need to figure out how to make yourself stand out from those competitors.
When you're choosing your idea, you need to choose a specific problem to solve. In other words: You need to niche down.
Why? Because you need to speak to a specific audience.
For example, if you were to build a general ecommerce marketplace that sells everything under the sun, you would have to compete with marketplaces like Amazon—which is one of the biggest companies in the world with a massive budget. It can offer things like next day deliveries and has a huge variety of products.
It would be extremely difficult for a new startup to convince Amazon users to switch from its own platform (which they're already comfortable with) to a new one (that doesn't offer all those perks).
But if this startup would talk to a specific segment of Amazon’s user base (like high-end interior design), things might look different. For example, if this company could offer better prices on high-end furniture and home decor items than Amazon does, then there may be an opportunity for success!
It's always a good idea to do some research before launching your product. And it's not just any research—it's the kind of research that can take months and months, and even then, there's no guarantee that you'll be able to validate your idea.
But what if we said you could do all that in just six months? What if we said you could have a market-ready MVP that would help you get started on the right foot and make sure your idea will be a hit with customers?
We're here to tell you that it's possible. With our marketplace builder solution, you can build marketplace platform in less than 2 months.
No coding or building from scratch.
Everything we need from you is business requirements, attributes, custom filters and design. We'll take care of everything else!
Your customers will be able to easily search through items and find what they're looking for. You'll also be able to sell products without having to worry about spending money on custom software development or spending hours upon hours working on your own product listings.
When you're starting a new business, the first step is to figure out what your business will do. This is called coming up with an idea—and it's important to get this part right!
The best way to start is by asking yourself: "What problem do I want to solve?" It's best if this problem is one that lots of people have and they're willing to pay money to solve.
Once you've figured out what problem you want to solve, pick something that's not already being done by someone else. If it is, then try to find a unique angle or strategy that makes your idea different from what other people are doing.
Once you've come up with an idea for your business, it's time for research! Find out what other companies are doing in the same space as yours and see if there are any ways that you can improve on their solutions. If there aren't any better solutions out there yet, then congratulations—you've found a great idea!
We at ByteAnt happy to help you in developing your new business, contact us to have a free consultation.
and get the latest updates