Using Marketplaces to Build an MVP.

It has been a little over a year since I started FilterGrade and one of the most valuable lessons I’ve learned is that you can validate your idea for a product or service without spending a dime.

For those of you who don’t know, FilterGrade is essentially a collection of post-processing tools and resources for photographers, designers, and other creative folk. In laymen’s terms, we provide Instagram-style filters for professionals to use in Photoshop.

The Dilemma

FilterGrade spawned from a random suggestion a friend made over Skype in the middle of the night. I had never really thought about starting my own company before. I loved the independence of freelancing and setting my own hours, but the idea of running a business was much different.

Reluctant, but somewhat intrigued, I decided to start FilterGrade anyway.

Building the product was not particularly hard. I had created Photoshop actions in the past and very much enjoyed the process. However; after a month of hard work and spending my evenings creating over 200 unique photoshop filters, I was faced with the dilemma of launching.

How would I put my product in front of buyers? I had no budget for ads. I couldn’t code much either. But I really wanted to launch my product. I wanted validation. So after reaching out to a few friends, I decided to try something a bit different.

I was going to take the marketplace route.

Fourteen days later FilterGrade was live on CreativeMarket with my only investment being time.

The marketplace route essentially entails creating a product and launching it to an existing audience for validation. The process significantly cuts down on time and effort. More importantly, it didn’t cost me a thing.

No landing pages or newsletter signups. Just a product.

Validation

After six months of selling with CreativeMarket I had money in the bank to invest in web development, I validated my product, and I refined the profile of who my ideal customer was.

The marketplace route gave me the ability to do all of this without the initial friction of a “traditional launch”, so to speak.

With the data and knowledge on my side I was then able to build and grow the eCommerce side of FilterGrade. These insights helped me do that more efficiently.

The Benefits of a Marketplace

What benefits can a marketplace offer that a landing page or newsletter cannot?

• An existing customer base, hungry for products in your niche.
• Less to focus on so you can devote your time on product development.
• The ability to validate and test your ideas at a smaller, cheaper scale.

This isn’t even the tip of the iceberg though. The number one benefit of validating your product through marketplaces is the ability to see your product’s true value.

When people actually hand over their money, you know you’re on the right track. This is a stronger signal than getting someone’s email address or a click to a specific landing page.

Applications

Realistically this route isn’t going to be the same for everyone. Physical products will require the initial monetary investment for prototyping and development. Services are harder to package as a product that can be sold or listed on marketplaces. However; it is possible.

Consider rethinking your idea of a marketplace for a second, though.

Essentially marketplaces are communities of people searching for a solution. People visit Amazon for easier shopping online. Designers head to CreativeMarket for resources that can speed up their workflow. Companies use oDesk to outsource their work and find talent.

Each of these “marketplaces” is in actuality a community of people looking for the same thing.

So now take this idea of a community of people looking for the same thing and remove the marketplace aspect of it. People visit Quora to get their questions answered. People visit Reddit, as a whole, for entertainment. People visit different subreddits to entertain their specific needs.

See the opportunities here?

One of my favorite examples is the story of how AppSumo was built for $50. Noah Kagan didn’t launch a full scale deals site with all the bells and whistles. He saw an opportunity in the existing community that Reddit was, and used it to his advantage.

The same can be applied to other existing communities too.

Writers can use Quora to drive traffic and interest to their books. Designers can showcase their work on Dribbble as a means of getting noticed by clients. Photographers can build a following on Instagram and use this to gain sponsors.

In Practice

Marketplaces are pre-built validation tools for you. In a matter of minutes you can have your product in front of millions of prospective customers. All the initial work of building an audience and preparing a site is gone.

I’m well aware you won’t shoot to the top of Amazon or get placed on the front page of Reddit. You don’t need that to happen though. You need your product in front of a community, large or small, to see what it is truly worth.

Then, after product validation, you can improve and continue onward. Using the data from the marketplace experience you’ll be more efficient in how you build your audience, and ultimately sell your product.