Collaborative marketplaces are fascinating. Social interactions and transactions have been limited to personal and geographically limited networks for hundreds of years. Modern communication and global social networks now enable even large communities and complete strangers to cooperate and mutually benefit from each other nationally and internationally. Seeing our society being brought together and synchronized like a busy bee hive is certainly part of the fascination of the collaborative consumption movement.
An altruistic vision alone is unlikely to feed you
Sharing a vision and being obsessed with a concept is certainly important to build a business, however in order to build a sustainable business, it is more important to have an actual market. No matter which business guru you follow and which books you read – it always boils down to the key question: “Who is your customer and for what product are they willing to pay x amount of money?”
A purely altruistic vision of saving the world, being sustainable and simply fascinating is nice, but will not feed you or any other employee. If you don’t want to be dependent on generous foundations all your life and waste your valuable time fundraising every day of the year for a good cause, then it is better to start understanding how you can deliver value beyond being the most rational, socially intriguing and resourceful choice.
“But everyone is my customer”
Especially with collaborative marketplaces it can be tough to narrow down your customer group. Isn’t everyone supposed to be your customer?
Yes, the goal is to have everyone using your product in a couple of years, this should remain your vision. But it is always easier to start focusing on a geographically closed and well defined community, to reduce the complexities in finding, talking to and supporting your customer that you will face when running your business. It is time to focus on a limited use case to make your life a hell lot easier.
B2B or B2C?
While thinking how to narrow down your target group, you might also consider whether you want to provide a B2B, B2C or C2C service. Here I want to share some of the experiences that friends and I have made in the world of collaborative marketplaces while figuring out our markets.
B2B and B2C look great from the outside. Businesses are economically driven, have many regular transactions and embrace innovation and sustainable business practices. The decision makers want to be more resourceful and efficient and every cent they save gives them an advantage over their competition, so also your disruptive ideas might be beneficial. The B2B or B2C market is most certainly much bigger than the C2C market, so that you could establish a viable business in this space. Also, most businesses have a sustainability report today or actively want to build a more innovative or sustainable brand. All of these aspects definitely make it interesting to look at B2B or B2C transactions.
However it is of utmost importance that you are familiar with the common industry practices. Get an overview of the market by talking to 20-50 businesses. How do they do what you want to offer today? Who do they buy it from and how much are they paying? How do they choose from who to buy the product and what are the key criteria for their choice? Is there something they can’t do today, which you could provide? (Simply follow the Four steps to the Epiphany here…)
Hurdles of B2B or B2C as entry markets
From my personal experience, B2B or B2C services have great potential, but are often not a suitable target entry market because of the inherent uncertainty in marketplaces and the high established industry standards.
There is a lot of uncertainty in new collaborative marketplaces, which makes them unsuitable for businesses at an early stage. Collaborative marketplaces bring multiple parties together to cooperate, this gets messy quickly and introduces multiple points of failure and many questions. Who will the customer be, will they be reliable, trustworthy, on time? What happens if anything goes wrong with the transaction? Who will be paying for the lost time or revenue? Or even worse, what if the business loses a customer because of one bad transaction you facilitated. All these uncertainties are too risky for businesses, because every step is business critical. Especially if steps are business critical the decision process will take longer, businesses can be quite inert. As long as you cannot guarantee a certain level of service it might be extremely tough or impossible to establish business relations and compete with existing proven services. So be prepared to answer those questions in your chosen niche market.
Also the industry service standards might go far beyond the service you can offer at the beginning. Industry standards might be to offer complementary insurance, real time tracking of a transaction or direct integration into business software. Being able to offer all of this needs a lot of business expertise and time to implement. So, probably your first customer will not be the industry leader, but smaller companies which are again harder to find and sell to.
C2C as a way to start
In my opinion, C2C is the best way forward for collaborative marketplaces to start. If you are a rental platform, marketplace for transportation or other, it will be easier to establish an acceptable level of service for C2C transactions. It is a way to experiment with your customer, prove your business, learn and grow and prepare for an expansion into the more professional B2C or B2B space.
Of course these are only subjective impressions from my own experiences in setting up peer to peer deliveries and transports. Not everything might apply to your chosen market and I am sure there are exceptions where businesses are very willing to use collaborative marketplaces early on as an additional stream to target customers.
One thing every startup is missing is resources. You barely have the money to employ one, let alone two people, so in the end, you always end up improvising to get your legal questions, graphics, communication, PR, HR, IT, Accounting, or Sales figured out. You can only survive this fun ride if you have the friends and advisors to help you bridge your knowledge gaps and the network to recruit (almost) free help, if needed.
PolyPort was lucky enough to get a lot of help with market research this year and I encourage all entrepreneurs out there to take the same opportunity. The renowned business school in St Gallen (HSG) has integration seminars as part of their curriculum for last year Bachelor business students. These integration seminars are done in cooperation with businesses and focus on answering strategic business questions a company is facing. Examples may be “We are a German company looking to expand. Should we launch product X in Switzerland and how should we go about marketing it?”, “We want to know how process B is handled in the Swiss retail market. What are our barriers to entering the market with our product Y and how should we position ourselves?”
Whatever your questions might be; get in touch with the professors at HSG to discuss this opportunity. Usually classes have 20-30 students which will split into groups of 2-5 people to answer your question. You can provide guidelines, such as “each group is expected to conduct interviews with ca. 10 companies” and track the students’ progress over the semester. You will be asked to give one or two intro lectures, answer questions of students every now and then and be present at a mid-term and final presentation to give feedback. It’s a great way to get fresh ideas, may be find some future customers or even employees. Don’t miss out!
Dates & Contact
Projects are defined in October/November and the seminars take place in the Spring semester.
Get in touch with Heiko Bergmann, firstname.lastname@example.org
PolyPort can get close to 100.000 CHF only in September!
OK, we dont have the money quite yet, but we have reasonable chances. Among others we are participating
@AXA Innovation Award &
Keep your fingers crossed!
Today, Philipp and Stella travelled to Winterthur to pitch as 1 of 5 selected teams at the AXA Innovation Award.
Orginally more than 110 teams had applied to participate and get the chance to win 75.000CHF, founding capital and support in setting up the insurance for the company.
Among Diamond Heels, importing fair trade customizable high heels, and a startup with the goal to monitor energy consumption of industrial plants more efficiently, PolyPort made the final cut!
All finalists made a short movie about their project. Below you can see us sweating in front of the camera lights.
We will post the video soon 🙂
The winner of the award will be announced September 23rd.
It’s so hard to give things to people for free… even if you have a basket of yummy snacks and drinks right next to you to offer.
Even harder:try to engage people in a conversation!
Our first experience with customer surveys last month was really a life lesson learned:
1. dont try to engage customers right behind the checkout
–>if the service customer manager tells you to, try to convince him otherwise:people will just RUN
2. fill up their free time in the queue or at the bus stop = MUCH BETTER
On average you might get
-1 person to talk to you and give sensible answer every 5 minutes
= 12 people per hour
= 6 hours – (1 hour of breaks and lunch) = ca. 60 people in a day!
BE NICE whenever someone tries to ask you some questions,
HIS JOB is dam HARD
The PolyPort co-founders have officially graduated and have opened up their Berlin headquarter.
|From Office opening celebration|
Our current office is at FU Berlin in Dahlem. It’s about 30 minute train ride from the city center and right next to the Botanical garden and multiple embassies. So definitely not the worst place to be.
|From Office in the founders villa of FU Berlin|
but we are not only enjoying the summer time and free office space… as you can see, we are working hard after all 😉
|From Exhaustion after a long day|