How to come up with new ideas for an online marketplace
In previous articles, we described how the Sharing Economy developed and where it’s coming from. Now we will get to the most important basic module for you: your idea. Do you already have a great idea for a new online marketplace? Or are you excited by the idea of the Sharing Economy and are still looking for a suitable idea for your startup? In the following, we first describe the basics that your solution needs to fulfill. Then we will elaborate four further aspects which will help you to find and design great ideas for new online marketplaces.
1- Your solution: save money, reduce effort, receive better quality
One of the main reasons for the existence of the Sharing Economy are idle assets. The most popular example is the power drill which is only used for a few minutes during its lifetime. The rest of the time it collects dust together with other idle tools. So, wouldn’t it make more sense to simply rent a drill when you need one? The thought of sharing is usually evaluated positively by society. For this reason, startups in the field of the Sharing Economy often receive positive feedback. However, in many cases there are problems when implementing the idea.
Solving a real problem is the the most important basic principle for ideas for new online marketplaces. Therefore, the solution has to offer your users at least one of the following factors: Your idea allows users to save money, receive better quality, or to reduce their time and effort. Of course aspects such as community feeling or sustainability are also relevant. Yet at first, you should still focus on the first three. We will get into further detail in regard to this in the fourth paragraph.
2- Our advice: local offers are trending
There are market niches for which technically a globally operating business already exists. A good example are Lyft and Uber. Lyfts’ driving services are restricted to certain cities. In this way, the company can coexist with the global giant Uber. You will find out in the next paragraph how this great idea came into being.
Even though nowadays services can be sold online, it is often still necessary to meet up personally in order for a transaction to take place. When doing so, it’s important for the user to invest minimal time effort. In this case, local online marketplaces have an advantage. Especially when it comes to groceries, it is relevant for many people to be buying locally. Local products stand for good quality and sustainability. Customers often have to put more money on the table for them. But maybe you have an idea on how you can save them some money?
Apart from a geographic focus it is also important to have a narrow focus in terms of the product. Especially if there is competition already out there, specialization can be the key to success. Ultimately, not every business concept fits to every country or city in the same way. Do you know a city or maybe even a country that faces a very specific issue?
3- Tools: groups online and offline
Everywhere in our daily lives we come across marketplaces, on which people exchange all kinds of goods and services. It may start with children swapping playing cards in the school yard, and neighbors that help each other out by borrowing items. It goes up to organizations which enable people to follow a common interest. Social media simplified these interactions for example through Facebook groups. Based on that, university towns have groups for exchange students to find a buddy to learn another language with. Or there are groups founded from citizens for citizens to help each other within a certain city.
So, check websites such as eBay-Kleinanzeigen in Germany to see which areas have the most listings. As pointed out in the beginning, the Sharing Economy can be established wherever there are idle assets to be found. “Marketplaces” that you come across online as well as offline can hold the potential to be turned into new online marketplaces.
If you aren’t sure which fields are most suitable for the Sharing Economy, you should check the so called honeycomb for the collaborative economy by Jeremiah Owyang. It helps to orientate yourself and get a better idea of the potential of the Sharing Economy. The model is constantly extended because the concept of sharing is spreading rapidly.
4- Key aspects: building trust and reducing effort
Most of the groups and marketplaces don’t have a review system implemented. This is an important difference to online marketplaces of the Sharing Economy. And with that, we are coming back to Lyft. The founder, Logan Green, came up with the idea for the company because he had to continuously find lifts on Craigslist and later on with Facebook. When doing so, he never knew if the driver would be reliable. In the same way, the driver had to trust Logan as a passenger. And when it comes to sharing your belongings with strangers, missing trust is the biggest obstacle to overcome. AirBnB realized the same thing. Consequently, they put a lot of effort into a well-functioning review system. This potential of the Sharing Economy is an important advantage compared to traditional marketplaces. It ensures quality and builds trust.
Plus: time is money. This means, if the expenditure of time is too high just to rent a product, people usually buy it at the next store. This can be the case if the requested tool is only available in a distant town. Or due to a complicated online marketplace, which requires time costly transactions. And the same goes for the supplier. If the effort is too high to offer a product or service, people are more likely not to offer anything.
Based on my own experience, I can confirm these aspects to be the key elements for using an online marketplace. Before any booking on AirBnB, I first read through the reviews of other guests. And I’m able to offer rides on BlaBlaCar even with a tight schedule. Because creating the offer is quick. Reviews from my passengers play an important role. To design your idea perfectly, you should think about what matters to you when you use other services.
5- Last stop: market research
Before you can now dive into the creation of a startup with your new idea, take another moment to conduct a thorough market research. It will help you define your focus. Plus, it can be the case that there is already a very similar concept, or even the exact same, already out there on the market. If so, you should adapt or rethink your idea.
In conclusion, paying attention to your daily life and your environment can go a long way. Looking at problems more closely and thinking in alternative ways can be worth it. If you have an idea which follows the basics described above and adapts to the demand and the problems of your target group, you established the most important basis to turn your idea into reality.
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