The Hard Part About Building Startups Isn’t What You Think
Are you staying focused on the right things?
An entrepreneur stopped by my office, excited to share the idea he’d been working on. The idea was for an online, buyer/seller marketplace. These types of two-sided marketplaces are immediate “red flags” to experienced entrepreneurs because two-sided marketplaces face the notorious “chicken-or-the-egg” problem — you need sellers in order to attract buyers, but you need buyers in order to attract sellers. How do you get initial traction for your marketplace when you don’t have either?
Two-sided marketplaces are so difficult to launch that, whenever entrepreneurs tell me they’re interested in building one, my standard advice is something along the lines of, “Are you sure you want to do that? Do you really know what you’re getting yourself into?” And then I go on to explain the challenges inherent in the two-sided marketplace model. After all, I’ve tried building two-sided marketplaces multiple times, and all those attempts failed.
But the specific challenges of a two-sided marketplace aren’t important for this story. Every business is difficult to launch in some ways. What I was concerned about in my conversation with this particular entrepreneur was that, once I’d finished explaining the challenges related to his idea, I…
