Develop (g)een online marketplace (1/5)

Regarding the answer to this question, I can be brief: No, you shouldn't want to develop an online marketplace.

How does that work?

More than once over the past years, entrepreneurs asked Joost and me if we wanted to brainstorm about their new online marketplace. Sometimes we could see from miles away that the idea wasn't as brilliant as they thought. In some cases, loads of money had already been invested.

In other words: an online marketplace is not an end in itself.

I had a eureka moment years ago when we were working on an innovative online marketplace for a big client at digital agency Freshheads. It just dragged on and on. The client pumped tons of money into it, buckets full. We flew to Helsinki, to London. There seemed to be no limits. But the marketplace never took off. And no one was really happy. Until Michiel (co-director at Freshheads) said to me: what are we actually doing? And especially, for whom are we doing it? After that, we pulled the plug and decided this was not something we wanted for our clients anymore. If a marketplace doesn't offer a suitable solution for the goals organizations want to achieve, we need to have a conversation about it and make a decision as quickly as possible.

An online marketplace is not the solution for everything or some sort of holy grail. It only works if you can (continuously) provide value for buyers, sellers, and yourself as a platform.

Joost and I learned the hard way. In the early years of Werkspot, it was a matter of searching and experimenting. That cost blood, sweat, and tears. And also: a lot of time and deep pockets. We doubted often enough and even seriously considered throwing in the towel. Fortunately, we didn't. Now that Werkspot is such a success, it's hard to imagine.

Let's revisit the initial question of this article once more. Should you actually want to develop an online marketplace?

Online marketplaces create endless opportunities and possibilities. They offer exactly what 'regular' distribution channels currently lack: convenience, speed, market-appropriate prices, and trust for both buying and selling parties. This makes them enormously popular. But making an online marketplace successful is a craft of its own. You have to deal with supply and demand (and thus, with the needs and quirks of both askers and suppliers), and with yourself as a platform. You have to attract multiple parties and keep them satisfied. This requires very specific knowledge of the market in which you operate. Compare it to the gears of a clock, which have to fit together precisely. In every marketplace, those gears run differently. The trick is to discover the success formula for your own marketplace.

So: should you want a marketplace? No, not as an end goal. But yes, because it simply offers enormous opportunities, provided you discover your perfect formula.

How do you tackle this? The article you are reading now is the first part of a five-part blog series where I guide you on the path to a successful marketplace. Consider it a super short summary of the book, without all the valuable exercises, cases, and real-world examples that you will find in the book. The next blog is about that one, beautiful golden idea. Hatched in your mind, in your attic, or in your office. How do you validate your idea? And is anyone actually waiting for your plans? You'll read about it in blog 2.

Want to read more?

This article is part of a 5-part blog series. Step by step, I take you through what you can and need to know about building a successful online marketplace.

• Blog 1: Develop (not) an online marketplace

• Blog 2: No one is waiting for your marketplace idea. Or are they...?

• Blog 3: The 3 basic ingredients for a successful start

• Blog 4: The first scalable version of your online marketplace

• Blog 5: 4 tips for making your online marketplace take off