I’m a graduate of the Singapore Founder Institute and I founded Learnemy as part of the program. Learnemy is an online marketplace where people can find trusted instructors for sports, music and programming.
There is a wealth of resources on how to run a marketplace, and I want to share the 3 things I’ve learned since starting Learnemy 3 years ago.
1. Reverse Marketplace Doesn't Work
When I first launched Learnemy, it was a reverse marketplace – learners share what they want to learn and the price they are willing to pay, and any interested teacher can make them an offer.
As it turns out, people are terrible at estimating the cost of something they have never purchased before. Since Learnemy solves the problem of finding trusted teachers, most of my customers were looking to learn a new skill, have no idea on what’s a reasonable price, and hence they underestimated the costs of engaging a teacher.
What would you do when you realized that something costs almost twice of what you initially expected to pay? You probably end up not buying. And that’s what happened to Learnemy. By removing that one field asking how much people are willing to pay for a teacher, my conversion rates doubled.
2. Marketplace Is A People Business, Not A Technology Business
When I just started out, I saw Learnemy as a technology company and worried about scaling and implementing processes to automate everything. This low touch strategy didn’t give me the growth I wanted. Doing things that don’t scale worked.
I started talking to learners and instructors and build a relationship with them and with time, I realized that people are willing to look pass bugs and inefficiencies if they trust the person behind the product. And this trust helped the startup grew. Some of my instructors even transferred my share of the fees back to me when learners insisted on bypassing the site. Such rapport and support is something I’m very grateful for.
3. Building A Marketplace Is Difficult
Testing a marketplace idea is easy – I tested Learnemy by putting up a landing page with a form embedded just to collect learning interests. When the forms come in, I’ll call up teachers manually to find a match.
Productizing such service is difficult. Learners and teachers have different needs – that makes building a marketplace much harder because you have to merge two sets of requirements into a single product. Plus, a sports teacher has different needs from a programming teacher.
What I've learned is that you can minimize the list of requirements if you focus on one category for a start, and branch out from there.
These are the 3 main lessons I’ve learned over the years. I hope it was useful for you! Although building a marketplace has it’s unique set of challenges, it is extremely rewarding to receive thank-you notes from people who have gotten more income because of the value you provide.
Elisha Tan is a graduate of the Singapore Founder Institute and the Founder of Learnemy, a web application where you can find sports and programming teachers. Find her on Twitter at @elishatan.