Online Marketplace — — UX/UI Agency in NY

How to solve the chicken and egg problem for your online marketplace business.

Kiyan Barelli recently wrote an article discussing the chicken and egg problem with online marketplace businesses.

Here is a copy of his article published on Forbes:

The time is ripe for online marketplace businesses, and their reach just keeps expanding. Peer-to-peer rentals, a hub for finding and booking key services, B2B networks or exchanges between individuals — anything’s possible. In an age where web and mobile apps like Uber, Lyft, Airbnb and Upwork are thriving, it’s time to get into the game.

Your winning idea will go nowhere if it isn’t launched intelligently. Below is what I’ve learned as a partner and head of product of Swiss Commerce, a UX/UI web agency. This measured approach can help your business take flight and ensure it connects with the right people at the right time.

Start With A Soft Launch

The soft launch of an online marketplace business is about tempering expectations with strategy. The online marketplace has two prongs: customers and providers. Entrepreneurs should bear in mind that, initially, there will be limited activity from the demand side. Providers generally have the larger motive to enter a marketplace because they’re driven by the potential of revenue. The soft launch requires addressing the age-old “chicken or egg” issue: the goal is to connect with customers despite having a limited supply, yet acquire supply with minimal customers. It just makes sense to build a marketplace audience from the supply side first.

Seed The Marketplace With Providers

One of the ingredients of a marketplace business soft launch is a focus on seeding the target marketplace. The goal should be signing up quality providers that offer relevant services or products for your business — and this is a crucial step before customers can come in. The trick is not to play both sides of the fence (providers and customers) too soon.

Here are a few ways you can find, identify and connect with your ideal providers:

  • Establish your value proposition. It’s very important to create a solid value proposition to present to potential providers. How is your marketplace superior to the one(s) they are currently using? Lower fees, higher pay, a superior user experience, a more appealing brand, and a more trustworthy app environment are just a few examples of points that will be of value to product and service providers.
  • Seek existing providers. Next , contact providers already active in similar marketplaces or venues. Check Facebook and Yahoo groups, Craiglist, Etsy or any other relevant platform. Using your value proposition, create a basic template email or pitch that can be personalized to invite ideal potential providers to your new marketplace. Airbnb, for example, had great success with this strategy during its soft launch.
  • Search directories, aggregators and offline resources. You can use online and offline resources to connect with potential providers. Make liberal use of Google searches for your target provider profile, but don’t neglect offline business directories and aggregators. Depending on your marketplace, the Yellow Pages, chamber of commerce meetings, hobby clubs, networking groups, Meetup groups, trade associations, online forums and internet review sites like Yelp can be gold mines. You have to be willing to be proactive.

With a clear profile of your ideal candidate and a solid value proposition, you should be able to zero in on new providers and get them to come on board. You might consider offering exclusivity, at least at first, making your marketplace “invitation only.” This will help create a buzz in the community, focus your enterprise on quality versus quantity, and compel other providers to seek you out.

Reach out if you have an online marketplace business idea or stuck with your growth strategy.

My team at Swiss Commerce can help you build out an MVP and/or your existing marketplace.

Thanks for reading and I hope you found some value. Questions or Feedback? Email us at Don’t forget to follow us @swisscommerce

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