{"id":5250,"date":"2014-03-10T14:00:00","date_gmt":"2014-03-10T18:00:00","guid":{"rendered":"https:\/\/www.wework.com\/creator\/?p=5250"},"modified":"2020-03-30T19:07:54","modified_gmt":"2020-03-30T23:07:54","slug":"thoughts-building-online-marketplaces","status":"publish","type":"post","link":"https:\/\/www.wework.com\/ideas\/professional-development\/thoughts-building-online-marketplaces","title":{"rendered":"Tackle these common problems when you’re building an online marketplace"},"content":{"rendered":"

Real estate agents, insurance brokers, travel agents, and more will soon be replaced by online marketplaces that connect buyers and sellers to: 1. distribution channels and 2. access to information.<\/p>\n

While earlier companies like eBay, and Amazon took generalist views \u2014 letting consumers buy and sell everything<\/i>, the broker was allowed to exist. Brokers brought expertise, proprietary data, and gave sellers new distribution channels to targeted audiences.<\/p>\n

But today, many industries are still crippled by opaque markets controlled by those same middlemen. They are brokers who protect walled gardens of information.<\/p>\n

Before Trulia<\/a>, Zillow<\/a>, and 42Floors<\/a>, real estate brokers held proprietary information about what properties were on the market. They were also responsible for creating distribution channels that effectively reached buyers. \u00a0Their service solved a real problem. But because online marketplaces let sellers publish their own content and connect with their target audiences \u2014 brokers will soon be in trouble. Lower end brokers will slowly disappear altogether.<\/p>\n

And Real Estate is not the only industry about to see a major shift in how sellers connect with buyers. The travel, staffing, and insurance industries are all going to see some major action.<\/p>\n

Insurance brokers will become more efficient once they can easily connect with underwriters. Travelers will be able to search and book hotels online, even in the most remote places in the world.<\/p>\n

Startups are now helping hospitals better staff nurses by giving them better access to information.\u00a0They\u2019re also helping school principals find substitute teachers on a moment\u2019s notice.<\/p>\n

High-end brokers, or brokers, who work in a specific market, will likely be okay. For example, Founder Shield <\/a>specializes in startup insurance. Their expertise (defensible) over proprietary information (indefensible per the Internet) will serve as a barrier to entry. But generalists will suffer.<\/p>\n

Building Marketplaces<\/b><\/h3>\n

Marketplaces can be difficult for a few reasons:<\/p>\n

1. \u00a0No buyers will come until the site is populated with data (chicken and the egg problem).<\/p>\n

2. \u00a0Consumers use brokers, often because they trust brokers\u2019 opinions. Five star review processes in a marketplace are vague, hard to verify, and often don\u2019t vary from \u201cWe love it!\u201d to \u201cWe hate it!\u201d responses.<\/p>\n

3. \u00a0Facilitating transactions often require passing around paperwork, money, and strong communication between buyers and sellers.<\/p>\n

4. Creating liquidity is difficult. Convincing buyers that they should come on the site daily, or even weekly is tough. Without buyers constantly checking your site\u2014product\/services won\u2019t move.<\/p>\n

Tackling these problems head on – from the beginning – is important.<\/p>\n

Solving the Chicken and the Egg Problem<\/strong><\/h3>\n

When finding users for the site, start with sellers, and don\u2019t be afraid to hold their hands. They\u2019re your partners, and they have a bigger incentive than buyers to make the marketplace work. If your marketplace works, their margins go up (since they will be able to avoid a middleman), and their distribution channels will improve.\u00a0<\/b><\/p>\n

Try convincing them to invest their time in building a profile, populating inventory, etc. Founders should serve as account managers who can assist in the set up process.<\/p>\n

Building a Better Review System<\/b><\/h3>\n

Create a unique and trustworthy review system. It\u2019s also best to create reviews internally. User data, while democratized, is often uninformed, bad, and broken. Having an internal team of content creators will a long way. Hire experts, rather than emotionally driven users, to create ratings and reviews.<\/p>\n

Dealing with Buyer\/Seller Logistics<\/b><\/h3>\n

What happens next once a buyer and seller have agreed on a purchase? Paperwork must change hand, and so must money.<\/p>\n

Using services like Docusign<\/a>, or even white gloving some of the paperwork process is worthwhile. It\u2019s a pain in the ass to download documents, print them, sign them, and scan them. Digital signatures are legal, so use them.<\/p>\n

There are also many payment options out there. Paypal and Stripe are the two I highly recommend. Compare their features, and decide which will help you grow\u00a0in the short term.<\/i>\u00a0You can always rip out a payment system later on if it\u2019s not robust enough.<\/p>\n

Driving Daily Active Users<\/b><\/h3>\n

By constantly features new content, you can ensure users will come back more often. Internet users visit Linkedin, Facebook and Twitter every day to view their notifications and news feeds. Make sure users will feel like they are\u00a0missing<\/i>\u00a0valuable information if they\u2019re not on your site. Whether it\u2019s a blog, featured items, or some other technique\u2014the daily work goes a long way.<\/p>\n

Vertically driven, online marketplaces are going to change the world.<\/p>\n

If I can ever be helpful, please let me know.<\/p>\n","protected":false},"excerpt":{"rendered":"

Real estate agents, insurance brokers, travel agents, and more will soon be replaced by online marketplaces that connect buyers and sellers to: 1. distribution channels and 2. access to information. While earlier companies like eBay, and Amazon took generalist views \u2014 letting consumers buy and sell everything, the broker was allowed to exist. Brokers brought […]<\/p>\n","protected":false},"author":927,"featured_media":34382,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[43902],"tags":[],"class_list":["post-5250","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-professional-development"],"acf":[],"yoast_head":"\nTackle these common problems when you're building an online marketplace<\/title>\n<meta name=\"description\" content=\"Real estate agents, insurance brokers, travel agents, and more will soon be replaced by online marketplaces that connect buyers and sellers to: 1. distrib\u2026\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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