Two Ways to Bootstrap a Marketplace

There are essentially only two ways to bootstrap a marketplace.  It's not that you necessarily HAVE to pick one, but you need to focus and it's not possible to focus on all elements equally.  If I had to pick a position to start with, I would pick option A below but easier said...

Option A: You are starting with demand and you need to bring supply.

• Pros: You have the hardest part solved - getting the consumer interested in what you have to say.

• Cons: Your audience may not be comfortable buying from you if you aren't already a transactional site.  This means your primary challenge is one of conversion and follow-through.  Your biggest next challenge is convincing your supply to care.

Option B: You are starting with supply and need to bring demand.

• Pros: Assuming there is something unique about your supply, you have an asset which is hard to get.  A curated supply that can be used as the foundation to build something bigger."

• Cons:  Acquiring traffic is one of the hardest things to do in eCommerce in a scalable way.  It could be very expensive to recruit the other part of the equation to get your flywheel moving.  You risk fall into the "if you build it they will come" trap.

With either option, make sure you have a real purpose for WHY you’re doing this to begin with. Launching a marketplace because it’s a way to increase selection without fixed inventory costs is not enough. More on that in another post.