Solving the Chicken and Egg Problem

In launching a marketplace platform you must solve the chicken and egg problem.

You must have supply to engage buyers and buyers to engage suppliers.

In the early days, you’ll need to do things that don’t scale such as recruit supply that is not in the network for a particular buyer and more.

Here are some steps to overcome the chicken and egg problem:

Build a community out of suppliers and buyers and then connect them for the transaction.

Offer free tools that engage buyers and suppliers into the same group.

Provide supply in the form of a showcase as a starting point.

Start with existing networks such as angel groups, universities, or social groups and then transact the business.

Sign up a business that will pay for the supply.  This funds the operation while you find other buyers to join the platform.

Scrape the website for lists of buyers and sellers.

Start small and then expand to a larger supply and number of buyers.

 

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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.