When you have an idea to scale your sharing economy startup, ask yourself how well are you prepared? Do you think it is the right time to make this decision?
Scaling your sharing economy startup brings new changes to the company internally. It is the same hard work put up in launching your startup.
This blog pinpoints the things you need to take care of while scaling your sharing economy business.
Invest in Building Trust
A sharing economy startup is successful when it is trusted by the people to use the platform. Take steps such as:
When a seller/owner sign in to your platform, verify their identification, address and other official documents before renting their property.
Keeping the review system
Reviews help users in identifying the authentic service and owners. Ask users to review or rate their experience using their platform to build a healthy ecosystem.
Building Help Centre
Mishaps are bound to happen. Being there for them during dire situation strengthens the bond and build trust among users.
Identifying your Target Customers
When you scale your marketplace, you are bringing in a new audience, and expanding to a new territory. You need to analyze the targeted audience before devising any strategy.
Get the data from:
- Feedbacks from customers
- Competitor analysis
- Market research firms
Analyse the data and create a strategy accordingly in targeting the audience.
A plan of scaling a marketplace involves investing a considerable amount of money in marketing, building the required product, and hiring experienced people helping to scale the company.
When the company starts its scaling process, internal operation expands, making startup owners cautiously spending their financial resource. An economical way is by bootstrapping the financial resource until the company is gaining profits and brand is recognized.
For instance, Craig Newmark started Craigslist as an independent project, not thinking as a great potential. Soon it became popular, demanding to start a website. It was started in 1995 but funded in 2004 by eBay.
Marketing plays a pivotal role when a company plans to scale its business. It is one of the essential jobs of building a marketplace by creating awareness about the service. Marketing strategies one can adopt is:
Advertise your marketplace service through mediums such as television, radio, internet and social media. It reaches to a large audience. Allocate reasonable funds to advertise your service.
An effective way to market is by asking the currents users or the sellers to bring in potential customers in return for a prize or bonus offerings.
For instance, Airbnb has a guest and Host referral programs providing credits to guest and cash rewards to Host.
Word of mouth
An organic way to build an audience is by word-of-mouth. If a marketplace service is fulfilling to users, people share their experience with their family, friends, relatives and co-workers making your brand recognizable among users. It is marketing done with no efforts. But, it takes an amount of time to build an audience just by word-of-mouth.
Allow other companies to post and promote your marketplace in exchange for a monetary fee is the fastest way of publicizing. For example, Preply has a program of giving incentives to anyone who shares the website link in their blogs and websites.
When building a marketplace, the primary task is bringing in the sellers/owners. One of the ways to connect to them personally is through email.
Cold emailing allows explaining in detail about the marketplace service and how their participation can be a win-win situation. The difficulty is getting the sellers/owners contact address and convincing it is a profitable opportunity.
Scaling a marketplace becomes successful when there is a strong team behind the making of the product and a CEO having a clear vision. Having a good team behind the product building leads to a result matching the company goals.
To build a team, it takes time for the newcomers to get used to the environment and the internal functioning of the company. Things such as helping to form the team were:
- Giving training before assigning any project.
- Analyse the personality of the employee and assign the appropriate job role.
- Keep team-interaction activities to enhance the bond.
- Reward them for their work.
Besides building the team, encouraging leadership responsibilities, tasks and ideas impacts positively on the company’s growth. Leaders make sure the team goes in the right path.
To develop leadership qualities in your organisation, one must:
- Identify the potential employee who can be a great leader.
- Educate and train them by keeping conference and meeting, helping them to get better.
- Communicate with them and explain the company’s vision.
- Provide opportunities to showcase leadership skills
- Monitor and reward for their accomplishment.
- Delegating responsibilities to managers
Strategies to Expand your Business
When a marketplace owner decides to scale their service, the first task done is weighing the pros and cons of each strategy examining the present condition of the company. The strategy executed for expanding a marketplace is by:
Expand your marketplace by bringing in new product or service
Add a new service to the existing one. Do market research thoroughly before you consider this strategy. Study whether the customer will accept a new service idea and the profits the company might gain.
Expand your service to other geographical areas
Start by expanding your service to another city, state, or country. This move increases the sales and profits of the business if executed and strategized effectively. Study the market competition of the geographical area and evaluate the profit gain and success rate.
Expand your service to a larger audience
When starting a marketplace, the focus would be on niche people. Expand your service to the other audience. When you plan to introduce a new service or product to a new set of audience apart from the niche people, make sure you design a service making them feel connected to your platform.
The Bottom Line
Scaling a marketplace is much harder than creating a marketplace. I hope this blog post prep you to have the attention on the required things when you are thinking of scaling up your marketplace. If you still have any questions to ask, feel free to leave a message.