Gigstart Founder Atit Jain Explains Important Parameters For A Marketplace Startup

Atit Jain a BITS Pilani graduate, ex employee at JP Morgan and now the founder of Gigstart, a GSF accelerator funded first of its kind kickass marketplace from New Delhi, India that facilitates quick and transparent connect between entertainers and party planners shares his experience on the things to keep in mind while setting up a two sided marketplace.

He says two sided marketplaces often look easier to build than they actually are. There lies a classic ‘chicken and egg’ problem that one encounters. If supply exists then only demand will be created and if demand exists then only one can focus on providing the supply.

The success journey of a two sided marketplaces often works like an exponential curve with the tipping point much ahead in the journey than you can possibly imagine. That means one needs to work hard and do things in the right manner.

Below are the points that one should keep in mind while building such a marketplace:

  1. Low Burn- Keep your cash burn rate as low as possible as it will take time to build a demand. One does not want to exhaust all their resources before one reaches the tipping point of their journey. Don’t overuse technology and don’t automate unnecessarily. Let your processes tell you what you have to automate and what can be automated.

  2. Laser Focus- Focus on one problem and one geography at one time. You will recognize many parallels to what you are doing and it will seem logical to expand to more geographies to make more money. Resist this temptation till you have perfected your model.

  3. Hustle and Hack- You will need to do a lot of hustling and hacking. These tricks are required in all the businesses but marketplaces need them more. At times, you would need to sell something you don’t have and find the actual supply, later.

  4. Tougher side first- Supply and demand are the two sides of a marketplace. In most of the cases, one side will be easier to manage than the other. While you keep scaling up the easier side never equate the success of your marketplace to it. You will need to focus on the tougher side to scale up.

  5. Trust, Ease and Fulfillment- These are the 3 basic qualities of any marketplace. There was a time when you could build a marketplace without fulfillment but I think in today’s world no new marketplace can be built without fulfillment and ensuring the process through to its completion eg Air BNB. The tough question to answer is- where do you draw the line? The answer can be found only over a period of time. Till that time, do not shy away from doing un-scalable things.

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