Questions

If I don't have the expertise for sales/marketing and I am a 2 man startup, and I have a chicken/egg issue, how am I ever going to make money?

I am the CEO/Co-founder of an online marketplace where consumers post jobs and contractors leave bids. Every contractor we talk to tells us its a great idea and they would pay for leads, but we have yet to have anyone actually purchase a subscription to our site. We have a chicken/egg scenario where we need people to post jobs but we have to have contractors with active subscription to bid on the jobs. With no revenue right now, how do I bring awareness to my page (marketing) and how to I get contractors to purchase a subscription (sales)? Our site has been live for over a year. Everyone we talk to on both sides say this is a great idea and they love it. But reality doesn't seem to be playing out the way right now. I am trying to decide if I need to throw in the towel. I really don't want to but at the same time I am running out of personal capitol to throw at this.

6answers

"Every contractor we talk to tells us its a great idea and they would pay for leads, but we have yet to have anyone actually purchase a subscription to our site."

This seems like an obvious question, but have you explicitly asked them to give you money for the service? If not, then that is 100% the first place to start, bar none.

If they say no, then there are a few things you can do to help your cause. One is called reversing risk, which more or less means structuring your 'ask' in such a way that you are taking on a risk rather than the customer. In your case, the concept might be mean asking for a refundable 3 month service deposit.

Sales and marketing is where most of my experience lies, specifically in helping startups to find product market fit. Honestly, that is likely where you are having problems.

I would like to talk with you, so I will give you a clarity $20 promo credit to get us started and see if there is a good fit. If you are interested, send me a message.


Answered 6 years ago

In a two-sided marketplace, it's critical you create liquidity as fast as possible. Before focusing on you're going to monetize the service, it's crucial that you test the core interaction such that you know you have a scaleable business.

You've tried to test an idea around selling subscriptions that seems to have given you what you need to know. Contractors are unwilling to pay you upfront for the promise of leads.

I would strip out that requirement, and make sure that contractors are willing to bid on the contract using your site for free. If that piece can't be validated, there are bigger problems. But if it's validated, you can then look at other revenue experiments, the most obvious being to charge a small fee per each job accepted through your service.

I'm happy to look at the site and in a brief call, talk to you about how you can ensure the core concept is validated by user actions and how to test multiple revenue experiments to find the right model for your marketplace.

There are many other ways to experiment with pricing once you know that both sides


Answered 6 years ago

In order to be successful, you need to know exactly to who you are marketing too. All to often I see start ups without the necessary focus of who there customers are exactly. Most times they are too broad on who they feel they are selling themselves too. From what I see consumers and contractors is way too broad.

Right now you need to only focus on two things. Leads and Conversion Rate. Personal contact and social media if done correctly can bring in leads and can be inexpensive. What is your monthly marketing budget? Are you tracking what is working and what isn't and how is it being attracted?

I would enjoy chatting about this.

Michael


Answered 6 years ago

In the short-term, it comes down to the basics:
1. What makes your product unique or different?
2. Who are your target audiences?
3. How can you solve their points of pain?

From there, you craft a story (aka marketing) that meets the needs of potential customers. You need to make it easy for people to recognize that you can meet their specific needs, and there are clear benefits.

Once you've gone through this exercise, it's a matter of applying it to different channels (e.g. Website, direct mail, email, advertising).

Mark


Answered 6 years ago

Focus on getting people using your service first. Prove the value then roll out a paid service. Inlike the idea of a success fee for contractors over the idea of upfront fees.


Answered 6 years ago

Change the pricing structure. Charge like more like a real estate broker for contractors. Allow the contractors and consumers post and bid for free. The payoff comes when you have successfull connected the consumer with the right bid. Once the consumer decides on a contractor's bid - then they pay for the full contact information so that they can complete their contract. You now become a contract broker. Compensation is conventionally based on a percentage of the sales price, split between the consumer and contractor.

Some additional options are:
1) Offer a free trial period for the subscription
2) Offer 3 month subscriptions instead of an un-ended time period. People are often able to commit to a shorted, known subscription length.
3) Offer a money-back garentee


Answered 6 years ago

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