I’m often asked about my approach to building a community like ActSeed. There are many more failures than successes as few aspiring startups can build a critical mass of participants needed to feed the activity required to make a marketplace or community useful.
A recent post (“Two-Sided Markets: Which Side First?”) by Mark Peter Davis on his blog called “Venture Made Transparent” prompted me to weigh in on his post with a comment. It also spurred me to post a corollary thought here.
Mark’s post aptly recommends focusing on the side of the market that is most eager to leverage the network.
I have another suggestion to add here:
Provide immediate value to at least one of the “market sides”. If possible, provide something valuable directly to your community members before they attempt to connect with others.
Within ActSeed, each “market side” is defined as a group within the startup ecosystem. The focus within ActSeed is business creation and growth. The primary “market side” or group is the entrepreneur who is at the center of business creation. Before entrepreneurs link with a prospective investor, service provider, mentor or worker, ActSeed addresses the entrepreneur’s need to assess where they are with respect to strategic planning and basic preparations for raising capital, entering the market and dominating their competitors. This provides immediate value, while the completed profile is then utilized to match entrepreneurs with relevant capital and labor resources.
Solving an immediate need isn’t a strategy limited to building a community. It works with almost every startup. I know we entrepreneurs sometimes want to address all of a market’s needs right out of the gate, but start with addressing one simple pain point of your customer. Do it well and do it fast, and the customer will ask for more services. What you must do at this stage – more than closing a sale – is establish trust and reliability. I can point to three startups where I was a COO or CEO where we applied this mantra and every time, we expanded our relationship.
In summary, heed the useful advice of Mark Peter Davis. Pick one side to cultivate first. Additionally, try to provide immediate value that doesn’t rely on the prospect of future demand from other “sides” that will arrive later in the market. Solve one problem quickly and solve it well.
Tags: community, marketplace, two-sided markets
