Should I pivot my business from an agency based model to a marketplace model ?

we run an agency based service that connects customers to writers. This is profitable as we get up to 60% gross margins. We control pricing, management, recruitment, services offered and only just allowed direct communication. The problem here is that our growth has reached a plateau, and due to competitive rivalry and our pricing model, we feel we are losing out on growth. An idea that has occurred to me is to swith to a marketplace model, offer customers and writers more power and work on the network effect (and reduced pricing ) to grow the business. Is this a good idea? If so, how can I pivot successfully? If not, then what wi you recommend. Happy to book a follow on call if your answer is helpful.


1. Congrats on building a successful business.

2. It is important to look at your existing business and see what other services you can offer to the existing client base before you try to pivot the business.

3. What services do your customers use other firms for that you could bring in-house without increasing your overall expenses?

4. Examples:
a. Translating the writing into other languages.
b. SEO writing
c. Developing Brand Voice / Brand Guidelines
d. Ghostwriting

5. I would check out and some of their competitors who run successful marketplaces for writers and companies.

Answered 6 years ago

Hi! Great question, It seems that your business model is fairly thought out and your growth has haulted due to lack of strategic marketing and business development efforts.
Put it in context, imagine if Nike was asking if they should consider making something else than shoes because Adidas has increased their sales this year, which means Nike lost that market opportunity. What would they do?
They become aggressive in their pricing, they apply super targeted marketing to a particular subset of their demographic, bundle up products. In your case you can also build (more?) partnerships with bloggers too.
You can restructure your pricing to include the new "marketplace" idea service under a premium fee for the added transparency, more agile development due to increased communication, convenience. Unless you have an unconscious reasoning for trying to consciously make this decision to pivot, I would recommend simply becoming more strategic with your effort to reach new consumers and providers. One tactic is to have a great community of writers to where the quality of their work is enough to sway clients your way, for this there is a variety of creative approaches. :)

Best of luck.

Humberto Valle

Answered 6 years ago

First off, congrats on building a business that creates value and growing customers. Based on your description, the current agency based model seems more one of full-service, you may have a good feel on how much your current customers value the model.

With an agency model, the customer trusts your service and subject market expertise to give them the value they are seeking. It also allows you to charge based on the customer, complexity of project, resources needed, skillset etc.

In regard to the market place model, customers are usually looking for flexibility in pricing and also in situations where they are fine with identifying the writer, project managing it. The platform serves as the connector between both parties and helps manage the experience through services to post requirements, manage feedback & communication, payment, reviews etc

Few recommendations:
- Try the marketplace model as an alternate tier for customers that would be open to managing it themselves
- You facilitate the engagement via the platform and take a cut of the transaction from both parties
- It allows you to see how customers choose between either model & make a decision before pivoting.

Each model has its own advantages & challenges. Look at a few marketplaces such as envato, fiverr etc that have accomplished the marketplace model.

Happy to connect further over a call.


Answered 6 years ago

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