Who do you sign on first: Users or Companies?

 In a web startup where you are connecting companies and people (Like, for example, Groupon, Kickstarter, Gilt Group, etc), how do you begin?

  • Companies want to see lots of users before they sign
  • Users won’t sign on unless there are participating companies making offers
Alex Glenn

Oh I love this question!

I’ve had a few glasses of wine, so excuse any grammar issues in my response…

So, you have a platform offering localized business services/products to customers, or you have people offering services to local customers.

In either case you need to know – who the F do you bring on first????

Great question.

The short answer is… both.

But, that’s not going to help you one bit.

What I would suggest is this;

  1. Unless you have a billion in the bank, start with a target segment that is capture-able with your pocketbook. This could mean local. This could mean a specific buyer persona… whatever. Just focus on the low-hanging fruit.
  2. Next, decide who in that segment is most “in need.” I mean to say, which side of your target market is struggling to find the best/cheapest/fastest/most of the other? When you find that, it will answer your question. But humor me by following along.
  3. So you have found your niche, and determined which side of the buying decision is most in need of the other. You have your answer. Now comes the tricky part… convincing them to join.

I talk about this on Solving the Chicken and Egg dilemma. in bulk. It’s a situation where you need customers to come back, and users to stay. That’s why they call it a ‘dilemma’.

I’ll give you this; MAKE SURE, UNDER NO OTHER CIRCUMSTANCES, YOU HAVE A ‘HOOK’ BEFORE YOU RECRUIT ANYONE. Meaning, you do not ever try to recruit suppliers based on the incentive of customers they can service or sell to, when you do not have those customers on the platform. This only leads to mass-attrition and a total waste of marketing dollars.

Instead, make sure to have a proper ‘hook’ in place before reaching out to, or marketing towards, your chickens. This can be a simple widget/tool, a bad ass newsletter, an affiliate relationship, or an influencer’s buy-in. But, what it cant’ be is a ‘CLAIM.’

Have something there before the push. That’s the takeaway.

About the Author

Alex Glenn

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Growth Marketing Tactics | B2B / B2C / P2P Marketplaces | Email Marketing | LinkedIn Advertising | Facebook Ads | SEO - I am an 11-year veteran in growth marketing - specifically in platforms and marketplaces offering a service to users, or connecting service providers with businesses or individuals. Strategy/Consulting: https://clarity.fm/alexglenn

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