How to identify and prioritize value-added services in a marketplace in a startup.

At Zept, we serve a marketplace. The customers or demand side of our marketplace are international students looking for their first year of higher education. The supply side of our marketplace are the post secondary institutions (universities and colleges) that provide higher education. An international student’s journey to higher education necessarily involves a number of other activities and services. At Zept, our core service is focused on the aiding students at the point of deciding which schools to apply to. However, we can’t ignore the importance of these other value-added services. To that end, we’ve crafted a framework for identifying and prioritizing value-added services. We hope it’s helpful to other business who serve marketplaces. If you see flaws in our framework or if you feel we’ve missed something important, please share your thoughts!

When evaluating the merits of adding a value-added service to our marketplace, we run through this dialectic:

Does our relationship in our customers’ journey exist at the stage this service is relevant?
  • If yes, proceed.
  • If no, can we extend our relationship forward or backward to this stage?
  • If yes, we can proceed with the awareness of the dependencies and additional resources required.
  • If no, this service is out of scope.
Does this service directly or indirectly assist in achieving our mission (a.k.a. our value proposition)?
  • If direct, they are highest priority.
  • Indirect are secondary
  • If neither, we do not allocate resources to it.
Does our participation create more value (than we capture for both sides of our market? Money or data or both)
  • If yes, proceed.
  • If no, do not proceed.
Will this value add be profitable?
  • If yes, are the costs primarily fixed or marginal?
  • Fixed costs are higher priority than marginal
  • If no, do not proceed.
In descending order of resource requirements, is this a service we should :
  • create another marketplace for
  • perform directly ourselves
  • resell,
  • affiliate for commission
  • or simply link to?
Is there a dependency to features we haven’t built or to other value-add services?
  • If yes, then work will not begin on this until the dependency is satisfied.
Do we have the resources to develop and maintain?

We’ve made up an accompanying spreadsheet you can copy to apply this framework for your own marketplace startup.

Value Added Service Prioritization Matrix