Community Building October 13, 2020

Chicken and egg problem with launching a platform

Aleks @Aleks_Stormly

We've recently launched our analytics platform. We are trying to figure out whether we should first focus on gaining customers who would use our Templates to get one-click analytics solutions or focus on the community who can build those solutions on the platform.

The more Templates we have, the more attractive the product is for the paying customers. But until we have more paying customers, it is not that attractive for the community of builders.

In the future, we would like to make it possible for the builders to make money per Template. A model is similar to Salesforce, but for Analytics.

Currently, we address our UVP to the paying customer's side, but we also added information that it is possible to build your own Templates.

So the pitch for paying customers is: Turn your data into Insights with a single click
Pick your Template to get actionable insights instantly, with the use of AI.
No code, no data team required.

The pitch for builders is: Use Stormly’s AI-based building blocks to create custom no- code analytics solutions, or reuse the existing ones in the form of Templates.

Do you have any thoughts on this? Or maybe a similar experience and you would like to share your learnings? Which side should we start with?

https://www.stormly.com/

  1. 2

    Finance a few really wide use templates yourself, IDK if you need 3, 10 or 20 but a customer won't care if there are 5 or 500, just if he can find something useful for himself.

  2. 2

    See "How to Find Product Market Fit - CS183F" at 11:29 (https://youtu.be/_6pl5GG8RQ4?t=689): "To build a sustainable and compelling platform, you really need to get to 100M in revenue. The reason is just that you need to be at a scale where someone can actually capture a couple percentage points of your customer base, and build a real business themselves."

    To start, you're probably going to have to work with each of your customers individually, hand crafting them their templates, and then generalizing those templates to build your initial marketplace of templates for your broader customer base.

    Edit: With plans at $199 and $799 / month, you might want to consider just paying a few freelancers to be your initial "builders", and giving them referral bonuses on recruiting new clients (the companies that they're currently doing work for).

    1. 1

      I don't entirely agree with "To build a sustainable and compelling platform, you really need to get to 100M in revenue. The reason is just that you need to be at a scale where someone can actually capture a couple percentage points of your customer base, and build a real business themselves."
      You can have less traction and still be a platform, but it is a cool video and I will definitely watch it!

      Thanks for your tips!

  3. 1

    Hi Aleks,

    Don't do the same mistake what I did.

    I had the same problem and now I am clear that, I want to build Audience first in-order to sell my products.

    Building Audience first always helps. You can choose how you can work on this.

    I have watched your Techcrunch interview and it is great to get a product with complex functionalities what competitors does not have. At the same time, you need customers to use and get the features what they want.

    Any stage you are now, consider to get customers really to use your product. Understand their behavior and see if your products help them - Similarly market fit.

    Check the below image:

    https://i1.wp.com/thebootstrappedfounder.com/wp-content/uploads/2020/01/PreparationApproach@2x.png?resize=1024%2C507&ssl=1

    This is great advice from Arvid Kahl. This is true.

    Hope this give fair idea.

    Follow me to have any further conversation @hifounders.

    Thanks.

    Suresh.

    1. 1

      Thanks for your advice Suresh! I must say, most of the advice goes into focusing on the paying customers first, not the audience. I think your approach is also very interesting.

  4. 1

    I am having this exact same problem. I think setting up sellers first should be the goal, atleast few that when buyer comes in they have options to choose from. If there are no sellers, and buyers come in then it creates bad user exp.

  5. 1

    https://www.lennyrachitsky.com/p/how-to-kickstart-and-scale-a-marketplace

    Lenny’s newsletter has a wealth of resources on it. His series on building and scaling marketplaces was really helpful.

    1. Constrain - can you focus on a single or couple of key uses. Can you use single player mode and not even need the second side?
    2. Are you demand or supply constrained? Which side is harder to get? Build a small amount of the unconstrained side and then focus on the other.

    Also, what’s the relationship between builders and customers? Are builders making one template used by lots of customers? Are customers using templates from lots of builders? Or is it nearer a 1:1 match? This will inform the level of supply/demand on the unconstrained side you need.

    Eg for my platform, Tend we’re a marketplace where people can buy direct from any farm. We have a compelling use case for farmers and built up a small initial supply. Since they each bring lots of items, they can serve lots of customers. Now the issue is getting customers.

    www.tendrevolution.com

    1. 1

      Thanks! I will have a look at the newsletter. One Template can be used by many customers, so the ratio is 1:sky is the limit.
      I'd say they are equally hard to get, as the builders would want to get paid for the building, and paying users would like to have templates that they can use.
      So I guess since we have some powerful Templates already, we will now focus on more of the clients, as many clients can use one Template.
      Thanks for your example!

  6. 1

    More than a chicken-and-egg problem, you have a dual market problem.

    Chicken-and-egg generally plagues network based products, e.g. A dating app needs users who would be attractive to new users, but new users would use the platform only when there are other users already.

    The trick to solve such Chicken-and-egg problem is to have the market size reduced to manageable level (where we can control as many variables as possible) and scale meticulously.

    In you are case, you are debating upon catering to template builders or template buyers which is a dual market problem like e.g. Uber having to cater to both the drivers and the riders.

    So, like Uber, Airbnb etc. who work with dual market; the trick is to balance both. Have the drivers, houses ready i.e. have the templates built by what ever means necessary and then reach out to the potential buyers.

    1. 1

      Makes, sense! It is indeed a dual market problem, seems like we have to cater to both sides at the same time, which might mean us building Templates for a bit longer and then community joining us along the way.

Recommended Posts