Gautam Chandna, CEO at TikkTalk shares his own experience in launching niche-oriented marketplaces and what an entrepreneur needs for building a thriving service marketplace.
Before running TikkTalk, Gautam used to work at Opera Software in Norway. Starting to work as a web app developer, he grew and became a Business Development Director. After trying out different job positions at Opera Software for over 10 years, Gautam and his colleague decided to start a marketplace.
We met Gautam in 2016 when we started on developing his online marketplace TikkTalk. Sloboda Studio is delighted to see their way to success from the very beginning – from the idea stage to the current success. Currently, a TikkTalk marketplace is headquartered in startuplab.no, the biggest startup incubator in Norway and raised $1M in the Seed round. Besides TikkTalk, Gautam is running 2 other marketplaces.
The interviewer is Pavel, a CEO and founder of Sloboda Studio, a startup and especially marketplace-oriented software development company.
Online marketplaces have been a core specialization of Sloboda Studio for 5 years. But TikkTalk is particularly dear to us since it was one of the first marketplaces that Sloboda Studio has built.
Check out: How Sloboda Studio built a TikkTalk marketplace
Here are our three main takeaways:
1) Be 100% sure when starting a marketplace. Gautam says that if you are not sure about the idea, it’s unlikely to grow a successful project from it. He notes that starting a marketplace or any other business requires some hard thinking.
Asking questions like how the business will be operated or how the business will be recovered in case of a failure is essential. In addition, recruiting a team you can trust must be figured out at an early stage.
2) Know your customer. Find out who will be your first user on the platform and what the user flow is going to look like.
Gautam underlines that a user must feel welcome on your platform. Users should feel that they can trust your platform. And once trust is built, it should be easier to get requests. So, it is extremely important to find a way to make the user journey as pleasant and easy as possible in order for you to get requests.
3) Do not forget the human touch. Nowadays a lot of marketplaces are missing the human aspect. They forget that users are actually still people. If everyone could automate every feature on their marketplace platform, say a booking process, then it is only natural that customers will choose a platform that speaks to them.
Besides TikkTalk, Gautam has founded a couple of other successful marketplaces in Norway – a marketplace for cleaning services and a marketplace for career counselling. Below he shares his experience and insights.
The interview with Gautam covers:
- Things you should know before starting a marketplace
- How to solve a chicken-and-egg problem
- Whether all businesses will embrace a marketplace business
- Difference between a booking system and a marketplace
Pavel: What should you do before starting a marketplace?
Gautam: The first thing to do when starting a marketplace is to ask yourself many times why you are doing this. Don’t fall into the trap of answering “why” questions with “how” answers. Look into five whys.
The second thing is to have a plan B. Actually, as many backup plans as possible. Once you know why you’re doing it, keep asking yourself HOW you are going to do it. Make a list of your hypothesis, and make sure you keep asking yourself – was I right? If you’re always right, then something is wrong.
In most startups, you will find that your first idea was incorrect. We learned that the hard way. Our first idea had some features that turned out to be irrelevant since there were some factors that we hadn’t taken into account. So there was no market fit for our product and we changed our strategy.
The third point: you have to figure out what kind of team you need. You can’t do everything yourself. Everyone you hire must be smarter than you. You have to look up to the people around you and you have to trust them.
TikkTalk was built to help with the refugee crisis in Europe. A lot of people coming to Europe don’t speak European languages. The existing infrastructure for hiring someone who does not speak your language is very challenging. TikkTalk was built to solve this problem and offer a B2G platform for refugees to find interpreters.
Pavel: I believe these tips will come quite handy for startuppers. And what would be 3-4 main steps in solving the chicken-and-egg problem?
Gautam: I suggest playing something that I like to call the “Paper Game”– I’ve been doing this exercise with a few companies already.
At the end of the game you will have possible jobs to be done and a clearer picture of a future product and its target audience.
The idea is to silently write down on paper what exactly each of the players could be doing exactly in this marketplace and pass the paper among each other. Essentially play the game and see how many pieces of paper you come up with and what those papers and scenarios look like.
You can start by writing down the possible customer requests and how the platform is going to react. Then you can move over to more detailed parts like scheduling, booking and paying.
After doing this exercise, you will realize that what you thought of the software in your head was so simple, but it turns out to be complicated. It brings your software to reality.
Now the main question to ask yourself: who is the first person, the literal first person who will look at your website? And what will they do?
In most marketplaces, the person is actually going to search for the service that they need. And the first person to make an impact on your product is a customer.
That means that the first thing that you must do is actually make sure the request comes to you as quickly as possible.
Pavel: Oh, interesting point. So, you are actually saying that service marketplaces need to focus on customers first of all?
Gautam: Yes, because vendors will come to you if you have work for them. If someone wanted to buy a service from me, I could manually outsource the work to a competing vendor as well. But I can’t find a customer from my competitor, can I?
So you should focus on delivering the service, and worry about the vendors as part of service delivery – not customer acquisition.
Pavel: Yeah, interesting point. So it looks like you should focus on how to get requests from customers and the next stage or the third stage will be attracting vendors.
Gautam: And again this really depends on the industry, but what you have to think about is that your marketplace will have two walls: the customer side and the vendor side and your marketplace will be standing in the middle. It doesn’t have to be a fully-featured marketplace. You just need to have something in the middle as a stepping stone between these walls.
Once you have your MVP, you need to get more customers on board.
As soon as you have the customers you immediately need to move on to vendors and make a product that vendors actually want to stay with. Ideally, the vendors will start recommending your product to get more customers.
Pavel: Marketplaces are booming right now. Do you think that lots of businesses will turn to the marketplace business model in the future?
Gautam: I just feel that there are too many things that are turning into the marketplace and I don’t see how all of them will survive. It’s not possible for everything to be a marketplace.
Pavel: How do you personally distinguish? What’s the difference between a booking system and a marketplace?
Gautam: I’ve actually found there are lots of small things about every marketplace. It’s things like controlling the price, controlling the availability, quality, access, payment methods, payment types and invoicing mechanisms. There are a lot of small details that change how a marketplace operates.
Pavel: Also, I’ve heard such a statement that in marketplaces it is natural that the winner-takes-all.
Gautam: I believe there is no winner-takes-all because the game never ends. Amazon is an Internet company which used to sell books and now they do so many other things. Microsoft was an operating system which now gets all its revenue from the cloud.
So each company evolves, changes and moves. I don’t think there’s a winner-takes-all, but I do think there are successful companies that continue being successful.
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