The classic startup marketplace exists to do one thing — Eliminate The Middlemen.
Travel agents, real estate brokers… really all the brokers. They’re going down, c/o startups.
But as brokers become increasingly aware of our plans, how do we proceed?
Here’s how setting up a marketplace used to work:
- Free and open communication between buyers and sellers
- Start charging the top sellers
- Charge everyone
Here’s how setting up a marketplace will work in the future:
- Build tools for brokers
- Controlled communication between buyers and brokers
- Onboard sellers
- Charge everyone
Brokerages go away between 2 and 3. Nowadays, we just have to empower them first.
1. You give the realtor, for example, an easy way to list his properties online.
2. XYZ website shares the realtors’ listings with their audience.
3. When an XYZ customer connects with the broker about a specific property, XYZ website lets the property management company know they were responsible for the deal, not the realtor.
Are you empowering your victims?
“The same 26 letters can tell any story in the world.”
As creators, it’s tempting to use fancy lexicons. Why are we paid so well, if not to create?
These days, however, fancy is the new normal. Even failing companies work at offices with unlimited beer.
So how do we become remarkable?
First, delineate the stakeholders reading your copy:
- Non customers
Customers love you, at least a bit, because they’re paying you. Fancy jargon is OK, because like the fancy restaurant, “you’re paying for the atmosphere.”
Non customers, on the other hand, are unimpressed. They don’t understand where you get off with your pricing, your logo, your tweets. They don’t enjoy the full-screen video that pops up on your home page without warning, activating their speakers in a previously quiet cubicle.
Non customers are just looking for the truth. This is why I tell every startup I work with to be clever with your customers and clear with your prospects.
When the cow’s in the barn, you can brand it. Approach it with a hot iron in the field? It runs.
Last month I attended the inaugural Shoptalk conference in Las Vegas, a 3-day blitz featuring 250 speakers and 3,000 executives from tech and retail.
It was a Valley / No-Valley mash-up with representation from Google to Neiman Marcus, Amazon to burgeoning startups, and finally, curious investors.
Among the ~dozen panels and keynotes I attended, the common theme was a shared fear of Amazon.
Of course, one can’t even think about e-commerce without the obligatory Bezos Nod. But it bums me out that a zero-asset dollar store, pricing intelligence API, and countless other companies are kept up at night by the creators of the Fire Phone.
So while every retail startup is concerned about Amazon entering their space, or frightened to death of entering Amazon’s space, I offer another viewpoint:
The Amazon Killer will be Amazon
This is almost classic Christensen thinking.
Without plagiarizing a wise man, huge businesses fail because they a) get trapped in serving their biggest customers and b) can’t afford to serve up-and-coming markets.
But in startups, this is exactly what we do. We approach underserved, over-served, inefficient, and even efficient markets offering what we believe are better solutions to existing problems. Heck, we create solutions for problems that don’t even exist yet. Startups are awesome!
And this brings us to the bottom line:
Of course Amazon could enter your space.
Of course they have better engineers and more marketing budget.
But time has demonstrated over and again that when companies reach a peculiar size, they don’t explode, they implode.
What is your company?
I’m guessing it’s a room full of people who share similar values and want to improve the world by solving XYZ problem.
What is your competition?
It’s a room full of people who share similar values and want to improve the world by solving XYZ problem.
Who cares if your logo is better, their CEO is a douchebag, or the sales team keeps quitting?
Treat your competition like interns. They’re struggling to fit in, screwing up along the way, and making decisions that drive you nuts.
But you love them, because they’re helping solve the same problem, for free.
We know it’s important to do things that don’t scale, but what does scale even mean?
Scaling a lemonade operation t0 10 lemonade stands is insane; scaling a fast food joint to 10 locations is child’s play.
Thus scale isn’t only relative to the business, it’s relative to the growth channel.
How most people define scale:
Propensity of X to be infinitely or automatically replicated.
The missing half:
…the maximum N times that X can be done.
Advertising is perhaps the poster child of scalability, particularly in the digital format where “scaling” literally means clicking a button.
Compare ads with Quora, a community of people doing the least scalable thing imaginable — writing.
No two answers on Quora are alike. It is the aggregation of our world’s sharpest minds, sharing expertise and ideas, for free. It’s amazing.
But if Quora were like advertising, and there was an unlimited supply of folks wanting to know more about your expertise, then there would also be an endless supply of competitors willing to pay to share it (ads).
Here’s what happened after I wrote about product usability:
Did I answer every question about usability? Yep. Did I become a “market leader” in the subject? Apparently, yes.
And what all this cost:
- 2-3 hours
- 15-20 questions
“Propensity to be infinitely or automatically replicated the maximum  number of times that [writing about usability testing] can be done.”
Could you answer every question about your area of expertise?
Alternatively, can you show me an advertising campaign that gets better results with fewer resources?
TL;DR — Rethink scale. Stop advertising. Thanks.