While the key to a successful start-up is having an amazing product and the right team of people driving your vision forward, there are some variables that can make your start-up journey that little bit easier (or harder). Deciding to innovate in a multi-sided industry is certainly something that presents additional challenges.
In a two-sided market, such as the property sector, there are two distinct user groups that provide each other with network benefits – in our case, the renter and the agent. Ensuring that both sides’ needs are accounted for can seem overwhelming at first. But there are steps that you can take to bring the hurdles down to a manageable size. Here are my top five tips for navigating two audiences.
Start small and scale up
It’s important to establish supply and demand in your target industry to get any business up and running. This is even more important when working in a multi-sided industry. For example, in the property industry you not only need to establish a base group of renters who are looking for a property but you also need to source properties that are available to rent. This requires market place liquidity and can take a while to establish.
To make this process as painless as possible, start in a small location area first. This will allow you to establish your supply and demand as well as work out the kinks of the service. It also means that you will have a solid product before you scale up and add more users to the system.
Know what drives value on both sides
Vital to your business being a success is understanding what drives value to both user groups. You need to know what it is that both sides are looking for and what priorities they will place above others. Without this key knowledge, your offering will be off the mark and will not provide a relevant service to either side. Meaning it is less likely to succeed.
This is also essential to know for future up-scaling plans. Unless a high percentage of sales or transactions take place, you won’t be able to grow as a business. Understanding what needs to change within the market place, and so what is of value to both sides will help to increase the number of transactions that will take place.
Don’t be afraid of behind-the-scenes leg-work
You won’t convince both sides of the market overnight, one user group will always take more persuading than the other. But in the early days when you’re starting out, you may find the data you need to convince that user group isn’t as forthcoming as you might like. Rather than throwing all your time and resource into building high-tech solutions, don’t be afraid to look for the solutions manually.
In our early days, we needed to demonstrate that renters wanted to be able to book a viewing in just two taps to convince agents the demand for the platform was there. The solution to this problem wasn’t to get really techy and build a complicated product. Instead it was found through a manual process which involved a fair bit of behind-the-scenes research and investigation. Don’t be afraid to look for manual solutions. A bit of good old-fashioned leg-work should never be underestimated.
Find what makes you unique
With ‘technological innovation’ the buzzword of the moment, many markets are becoming saturated with “the best XXX ever seen”. The reality is that not every product or service is really adding something of true value to the sector. Knowing that your service is offering something truly unique to both sides of the industry will stand you in great stead for going out to canvas for investment and for growing your user base.
Find where the group value intercepts
It’s essential to understand where the value lies for both parties in the market. In a two-sided market, the user groups are intrinsically linked. Very simply, in property, the renter wants a new home and the agent wants to fill a property. This is where they intercept. Through understanding this value interception, we could provide a solution that aligns both sides of the market in a way which brings worth to all involved.
This is the key to any successful business. Finding that point in your market where you can add real value through a solution that solves a problem for both user groups. Once you have this figured out, the rest should all fall in to place.
Deciding to set out on your own business venture presents a myriad of challenges, especially when the industry you seek to drive forward is a multi-user one. However, by understanding where the value for each group intercepts and building your company around providing a solution for this, you will be in a strong position to drive your industry forward with an exciting enterprise.