Turning my back on $1k a month directory website to chase the potential of $1million a year two-sided marketplace

Around 2 months ago I took the leap of turning my pretty simple, mildly successful mobile bar directory into a fully developed two-sided marketplace.

I effectively turned my back on close to $1k (and growing) MRR overnight by switching the monetization model away from Freemium to taking a commission per transaction on the site.

Just thought I'd share my thoughts on how and why, if only for my own sanity 😄

I also go over the cold start problem for two-sided marketplaces, marketing tactics that worked/didn't work and what's next.

Here's a link to Roll To where you can book an amazing mobile bar for your next event: https://rollto.me

Starting out as a directory

Back in May of 2022 I launched Roll To as a simple directory for mobile bar owners to list their business details.

A friend of mine was running a mobile cocktail bar but struggling to make bookings, so given my background is in marketing, I offered to help them out.

I came to realize that there was a niche but sizable industry of mobile caterers serving at events from their converted trailers, tap trucks, horse trailers etc. Unfortunately (or fortunately for me I guess) there wasn't a specific platform on which to find and compare them.

The Knot is probably the closest thing but their focus is obviously on weddings and there are many more event types than that.

I'm non-technical but spent some time learning the basics of Weblfow and pieced together a decent looking, CMS powered website which allowed mobile bar owners to submit their business details, photos and contact info.

They could then be found and contacted by event organizers. After an event inquiry was sent, the transaction would take place away off-platform.

The plan was to get as many bars as possible signed up for free with a view to then upselling marketing perks and extra exposure on the website with monthly subscriptions.

Solving the cold-start problem

Obviously, an empty directory is no good to anyone, so I seeded the first 20 or so business pages with the information I could find for them online, contacted the owners and explained what I was building.

Nearly everyone was happy for me to promote their business...nobody was wiling to pay for the service. Pretty much to be expected as I was the site's only daily website visitor, and social media followers were in the single figures, but it was a good start and allowed me to tinker with the website, make it look good, and also start relationships with those first owners.

Cold emails

Absolutely did not work for me starting out!

Long emails (which I'm much better at writing now), very few replies (pretty much none if I pitched paid subscriptions early on), and lots of time lost. I moved on.

Offering free marketing

In the early days, I would approach a mobile bar business, ask if they would be interested in signing up to the Roll To platform, and offer to write a blog feature on their business for free.

The response rate was excellent. The owners would answer some questions I emailed over and provide photos. I'd then write up an intro, make the Q&A format nice to look at and I have a great piece of content to promote.

The next 15 or 20 mobile bars were signed up this way.

I also began writing blog features on 'How to market your mobile bar', 'SEO for your bar', 'Top Accessories for your mobile bar' etc.

The blog was really successful in creating relationships, building content on the site and social channels, and growing a familiar name within the industry.

Here's the blog for some marketing inspiration

Instagram DMs

After some time regularly posting on IG, I was growing a small following within the mobile bar community. I proactively started direct messaging accounts that followed me and this was my next lightbulb moment.

Instagram (and Facebook) are where the mobile bar community hang out and market their businesses. It's a no-brainer to approach them here and it worked immediately.

People would happily reply to my messages, tags, comments etc. They would provide feedback and support for what I was building.

A few months in, owners were now regularly signing up to submit their details without me needing to DM them first.

Instagram DMs are still a great way for me to get sign-ups and show that once you find a great marketing or outreach channel you should double down on it.

Solving the Chicken & Egg Problem

To be honest, I'm not sure this problem is ever solved in a two-sided marketplace.

But, with supply growing steadily, event organizers started contacting bars fairly regularly via Roll To, and at this point I knew that I was onto something.

So, how did I increase demand?

SEO

Alongside social media, from day one I had invested quite a lot of time in SEO efforts. I was playing the long game but it was free.

As well as the SEO basics, I started utilizing the CMS capabilities of Webflow.

I was able to spin up a landing page for every state and city that a mobile bar operated in. Every time a bar joined, I would tag them with their locations and create a standardized landing page for each tag.

That meant hundreds of URLs and headings including search terms such as 'Mobile Bars in Los Angeles', 'Mobile Bars in Austin', 'Mobile Bars in Denver' etc. etc.

I would use the same tags for types of mobile bar (e.g. 'horse trailer bar' or 'converted camper') and types of event (e.g. 'mobile bars for your wedding'.

I also found that a lot of Google search terms around mobile bars were folks looking to actually buy trailers to start their own business.

So, I created a directory for that too - a Classifieds section away from the main platform where people could post their bar for sale. I mainly did this to increase visitors but thought why not see if people pay for the service too, and they did!

I still have a couple of people each month pay $49 to post a bar for sale. Great content for the site, good for SEO and helps keep the lights on :) Plus, quite a few trailers have actually sold, so it's helped my standing in the community even further. This section sees a lot of inbound traffic.

I also created badges for businesses to place on their websites that show that they can be 'found on Roll To'. This has been a great way to build backlinks and further signups.

Growing MRR & switching from subscriptions to commission

With site traffic on the rise, I started pitching paid subscriptions at $49 per month, offering extra marketing perks, better placement on the site, blog features, social media promos, enhanced listings and more.

I added this at the signup stage, alongside the option to join for free, and amazingly a few owners took up the option!

Considering I had been marketing mobile bars for free up to this point in order to gain traction, it actually wasn't a huge change to the workload, plus I was actually making money!

Super exciting and further validation for what I was building.

So, why would I change what seemed like a pretty good thing?

There were a few reasons.

1. Churn and uncertainty

At no point did I feel like owners were abusing the marketing packages but some were cancelling after a couple of months of promo and not really sticking around long enough for me to get a good return on the time I had invested.

Subscriptions had plateaued at around 10-15 users per month and whilst I'm sure I could have doubled or even tripled that number, it would've been a lot of people to keep happy.

And when you're basically selling the opportunity for owners to have more customers sent their way, it becomes contradictory to have competing mobile bars paying for your marketing services.

2. The majority of users were getting something for free

90% of business were listed on Roll To with a free profile.

But, event organizers didn't seem to really care as free users were being contacted and booked just as much, or more, than those on paid subscriptions.

This felt unfair.

It also meant that Roll To as a platform were missing out on every booking being taken off platform.

3. Chasing a higher revenue ceiling

Even if 30 businesses had taken up a paid subscription, MRR would have grown to around $1500.

Better than a kick in the teeth but not quite 'quit your day job' money for me.

The average event booking for a mobile bar is worth $1000.

With that in mind, I just had this nagging thought that if I could build the number of mobile bars on Roll To to 500 or even 1000 (totally doable with growth into sub-categories like coffee bars, ice cream vans etc.), and we could facilitate even just 1 event booking per month for everyone on the platform, then there was major revenue to be made.

1000 bars x 12 events per year x $1000 = $12million p/year

This is a simplistic calculation and whilst I definitely don't expect that to happen overnight, at a 10% or 15% commission for the platform, even a fraction of that potential becomes pretty appealing.

Taking the leap

Around the start of the new year, and after quite a lot of research, feedback and support from my users, I decided I would go for it.

Roll To would graduate from directory to two-sided marketplace.

I would build 'the Airbnb for mobile bars'.

I found a really amazing team of developers based in Vietnam and Australia who were able to build me exactly what I wanted on top of the Sharetribe technology.

Development in itself was a huge learning curve which is a story for another day but I was able to launch the new platform by March.

SEO took a hit, some users left the platform (not happy with the change to a commission structure which is fair enough) and I lost a lot of sleep...

BUT, after a period of adjustment, things are on the rise again. Mobile bar owner signups are more regular than ever, traffic is ticking upwards and we have had bookings funnel through the platform seamlessly.

With the average platform commission sitting at $150 per event, the ceiling for growth has become much higher than paid subs and we're heading in the right direction.

New challenges & what's next?

With the new platform functionality, we are now much more involved in the booking process - that means handling questions around payments, taxes, liability, cancellations, reviews etc.

I guess that's the trade off for that higher potential revenue ceiling but I'm enjoying working through these new challenges and solving problems as we grow.

This year is now fully focused on user growth, both supply and demand.

Apart from web development costs (and my time), I haven't spent a penny on marketing.

I'd like to explore paid marketing channels in 2023 and see where that takes us.

Depending on how all of that goes it may be necessary to bring on additional help but I'm proud that this has been a solo, bootstrapped venture so far and am happy with the rate of organic growth I've achieved.

Conclusion

So, thanks for reading that long overview of how a directory graduated to become a full on marketplace.

I hope it helps anyone embarking on a similar journey. I know that reading IH posts and experimenting with other's entrepreneurial advice has helped me a bunch along the way.

Let me know what you think - should I have taken the leap or just kept it steady and grown paid subscriptions? I change my mind on this every day if not every hour! :D

And if you're planning a wedding, corporate event, birthday party, brand activation, or any other type of celebration, check out the vendors we have on Roll To.

Choose from vintage vehicles, retro trailers, tap trucks, coffee carts, churro bars, luxury ice cream vans, mobile photo booths, mobile florists and more!

And if you need any help finding something in particular, just let me know!