Latest / Success Story with Scott Clary / Lessons - The Blueprint for Building Two-Sided Marketplaces | David Ciccarelli - Voices.com Founder

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Lessons - The Blueprint for Building Two-Sided Marketplaces | David Ciccarelli - Voices.com Founder · Success Story with Scott Clary

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  In this lessons episode, explore what makes marketplaces succeed and how platforms differ from
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  traditional business models. Discover the key elements that drive engagement and trust,
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  understand how balancing supply and demand prevents negative network effects,
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  and uncover why focusing on one niche can outperform even the biggest competitors.
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  Okay, so we talked, okay, so we spoke about, okay, so how you got your first, first thousand
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  customers growth after the acquisition with, with voices.com, any other, any other tips for how
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  you scaled and marketed the business, anything innovative or different that you tried,
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  failed that, learned lessons from that you want to talk about. Yeah, I mean, there's, you know,
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  maybe just kind of breaking apart some of the marketplace dynamics because, you know, I often,
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  you know, will speak about this and then even like get the questions like, well, I actually have
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  an idea for a marketplace in like X category, you know, often the like Uber for excellence like,
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  okay, well, you need to understand how these things kind of work and what are those critical
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  components. And there's, and there's four of them. And the, I mean, this is really inspired to
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  give credit where it's due is from a great book called Platform Revolution. I highly recommend it
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  by a number of like Boston College MIT, you know, professors. It's really well done. And they
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  describe the difference between kind of old traditional world pipeline business where it's very
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  much along a value chain and everyone's trying to take their piece of the pie and control the
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  information and who does why and what kind of move through because they're incentivized to
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  keep it a closed system and control their part of that value chain. So the compliment to that
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  or the modern day equivalent that is not a pipeline, but a platform. And a platform has four
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  components. You have the participants, we talked about this, the buyers and sellers, the creators
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  and the consumers. So even on YouTube or podcasts, there are people creating and then there are
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  people listening. And or on Twitter, it's like 99.99% of the people are just consuming or
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  reading content there versus the creators who are actually posting. So who are the participants?
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  And then those participants need to actually second, you know, critical factor here would be
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  sharing of information, you know, different than again, that pipeline where you're kind of all those
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  participants are holding and trying to, you know, control the information. They actually want to,
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  you want to enable as a platform, you know, owner or entrepreneur, you want to enable the sharing
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  of information. Hence, you can go on and look at a profile of a creative talent on voices and
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  actually see all their historical information, you know, jobs that they've done, their ratings,
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  you know, ratings, you know, what's in their studio. All of that's, you know, there for the taking.
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  Then there's the exchange of services. And so it could be a product or a service. It might be
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  purely online, like like an upwork or a fiber, it's a digital service or a voices or it might be
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  what's sometimes called O to O online to offline. I start online with with lift. I call for my ride
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  and then it shows up offline, right? I start online with Grubhub or seamless and then the meal actually
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  shows up offline. And then the last one would be the exchange of currency. And I use the term
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  currency specific, I'm not saying money, although that could be that. It's most people think of it.
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  As a true platform, you actually have to enable commerce to happen. And that might be capturing
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  the payment upfront, processing the payment and paying out that service provider or that, you know,
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  that supplier, if you will, on for work well done. If it's one of these kind of creative,
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  let's call it content platforms, YouTube or Twitter, even then the currency is actually more
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  social currency. And that would be gathering likes and, you know, favorites and even kind of
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  ratings and reviews. And so it's these four components that make a platform successful. And the
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  absence of any one of those almost devolves into just purely a directory. You know, you're not
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  really facilitating interactions. It's just to kind of go glean information, but the actual
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  transaction or interaction happens elsewhere. It's like the platform covers all of that. So,
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  you know, again, that's that's I think a great way to think about how to structure the key
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  components of a business, especially a lot of services businesses are trying to move into reinventing
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  themselves as a platform. That's how I would think about it and having kind of built it and
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  stumbled upon those. And then we're eating a butter in a book and over a weekend, I'm like, oh my
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  goodness, that could have saved me that decade right there. And then what do you think is the
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  what do you think is the number one thing when somebody's building a platform that people don't
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  get right out of those four items? Is there one that stands out more than others? You you probably
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  you probably don't appreciate the need to have supply and demand. All all marketplaces and I use
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  that term platform marketplace a little interchangeably again. They're going to be either supply
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  constrained or demand constrained. And if you don't know which one it is for you, you're probably
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  going to be, you know, servicing and building up the wrong side for too long. And so, you know,
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  case in point, you know, actually had a friend who was one of Uber's first 50 employees.
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  And I mean, there's tens of thousands full-time employees and all that's really on. Very early on.
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  And he his job was to actually go city to city to get drivers. And once they got enough driver,
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  he basically launched new cities. And once they got just enough drivers that they immediately
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  changed years to he would place these cards. There was almost like business cards in hotel
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  keep like a front desk. And it would just say like your first ride free up to 50 bucks or whatever it
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  was. And that's just to get this flywheel going, the flywheel of network effects. And you know,
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  you have to know when when do you have enough supply in order to change? And then you got to go
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  all in on the other side. So knowing what sides constrained, I couldn't it's not prescriptive.
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  It's different for every it's not to say, Oh, well, it's always the demand that's constrained.
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  Sometimes it's the supply. I mean, Airbnb for a long time had a hard time having
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  enough people willing to open up their doors and welcome in strangers, right? Welcome in new
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  guests. And so, you know, it will it will vary depending what business is. But if if you don't get the
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  people in the marketplace using it and both supply and demand, you actually can have
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  negative network effects, not where it's self reinforcing upwards or you're getting more and more
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  more people. You know, an example might be, you know, the installation of the first fax machine,
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  you know, not useful. The second fax machine useful and third and fourth and fifth. But at some
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  point, people started throwing these fax machines out because like, why do I need a fax machine?
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  So that's now negative network effects where, you know, every time someone gets rid of one,
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  the remaining people who have fax machines, it's less valuable than it once was. So you have to be
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  constantly investing in that positive network effects where you're growing your base and doing so
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  in that kind of equilibrium fashion. One last point I wanted to bring out because this was an
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  interesting and interesting point that I thought we should touch on. You said that you can easily,
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  not easily, you can compete with larger players by simplifying. Now this is not just platform
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  specific, but I mean, this is a great lesson. So talk to me about that. Well, you know, I mean,
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  the let's let's let's talk about, you know, the definition of of strategy, right? And which is
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  this might sound incredibly academic. I've had the great experience of doing some executive
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  education as well over the last couple of years. And this definition is kind of stuck with me
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  of the strategy, which is arguably one of the most, you know, used overused terms. And it's not a
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  vision. It's not your values. It's not employing best practice because that's what everyone else is
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  doing. Strategy in short is choice. And it's the interaction of the integrated choices that
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  affirm makes like a business is going to make that differentiate it from other players in the
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  industry to deliver long term financial results. So the integrated set of choices, what are the
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  choices that you're going to make as a business that are different than someone else? And that can,
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  you know, we talk, we're talking about simplification. If the, you know, big brand co in your space
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  is really over complicated, they serve the high end of the market. Well, you go and carve out some
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  other end of the market. Maybe it's a specific vertical. Maybe it's a sub segment of the customer
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  base. And so, you know, again, for, for us, that voices early on, it was, I mean, Upwork and
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  or Elans and ODS, two big freelance sites combined become Upwork. This massive five billion dollar,
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  you know, you know, market cap, you know, business that's now publicly traded. But they do every
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  category, right? They, you know, you can hire a, and listen, we totally admire what they're doing,
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  crushing it. But you can hire a, you know, a musician to an electrician, to a graphic designer,
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  to a virtual assistant and a web developer and so on and so forth. They have, you know, 70, 80 categories
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  and like 8,000 skills that are all represented. So huge breadth. So how do you look at that and go,
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  well, what aren't they doing, right? Or what isn't my big competitor doing that maybe I can
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  take that slice and own it. And for us, that was, that was voice, you know, and voice over. Now I,
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  you know, at risk of sounding like it was completely calculated and so forth, I think what we've
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  discovered over time is that that's held up to be true. We can, you know, I would much prefer
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  to go really deep on one vertical area and own it as much as possible becoming the, you know,
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  domain expert, expert in this area. Again, kind of like the thought leader again term probably
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  overused, but owning that space before you go, like go deep before you go wide is probably the
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  simplest way to describe it. And so that's, it's like, you know, do something different and then
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  cut out all of the non-value added X, you know, activities that if you talk to your customers,
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  like do you appreciate that we do this, you know, have you run any surveys to understand what's
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  working and what isn't. And we do those like quite periodically, both let's call them quantitative
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  surveys to new customers, longstanding customers, and then follow that up with the qualitative
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  interviews. We always ask at the end of the survey, do you want somebody to contact you to quickly
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  talk through and you probably get about five or ten percent of people are like, yeah, I actually
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  like to talk to you about this and share more, more in depth feedback. So and then those kind of,
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  it's those kind of key findings that you can do that, that different chain, figure out those places
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  where you can get your business to be a little bit simpler. Thanks for tuning in. If you found this
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  valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want
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  to dive deeper into this conversation, check out the links in the description to watch the full
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  episode. See you in the next one.