The First 6 Critical Questions to Ask Of Any B2B Marketplace Business Plan
I've planned or helped plan probably over a dozen marketplace entities. While I mention this for B2B, this applies to any marketplace.
1 - Where Will Your Traffic Come From?
This is the most common reason marketplaces fail. You need a plan for traffic. Ideally this is built on top of some existing stream of traffic or what is just as good, a developed and working content strategy.
It's tough to build a great content strategy and attract new visitors at the same time you expect to build your marketplace. You need to start your content and audience-building early.
2 - Who Are the Primary Actors in the Marketplace?
You can only build a plan if you understand the actors involved. A typical two-sided marketplace has buyers and sellers. That's the easy part. B2B and other more complex marketplaces have other actors:
payment/storage and escrow providers
delivery and/or installation providers
warranty, insurance or other post-sale service providers
brand or advertising partners
3 - How Should Payments Occur Between All Actors?
How do the actors buy and sell?
How do we prevent fraudulent payments or disbursements?
Where does money flow, from who to who? How big is each flow?
4 - Where do I have the most significant head start in the "chicken and egg" marketplace problem.
Repeat after me. Every marketplace has a chicken and egg problem. Every one. However, every marketplace founder always has a head start in one of these areas. People and relationships from the career etc.
Those relationships will help you build the other side of the marketplace. It's just hard as hell to get the other side, right?
If you have no leverage on either side and no funding, you might be in the wrong business.
5 - Who Has the Money?
From your list of actors, think about the gross and net margins for each player. Think about who the large organizations are and who are the small ones.
What does each actor expect to get in a relationship?
What does each actor bring to the table that is attractive to other marketplace actors?
Marketplace businesses are often about one thing: finding and introducing yourself to new customers. Who needs new business the most? They will pay the most.
6 - Set a Launch Date
Like selling your business, setting a realistic launch date is a forcing function. It gets those great relationships you have on one side committed. Then you can tell the other side, look we are launching, you don't need to be involved but we would love to do it.
Setting a launch date is the "jumping off the cliff without a parachute" moment for your marketplace startup. If forces you to sell enough relationships on both sides to get initial traction for your idea.
There's more, but I wanted to lay out a few critical elements I always think about when I work with investors and founders.
Good luck!
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