Planning a middleman business, what order to do things?

[Steve Samuels]

Hi All,

I have identified an opportunity for a middleman business that I think is not tapped to its potential. There seem to be a lot of people looking to provide the particular service, and a lot of people looking for the service.

I would like to put together a website that allows the service provides to register and list themselves, and allows customers to find local service providers and automagically recruit the service provide. Similar to Uber or Just Eat, but it's not an instant (on-demand) thing, it's a service that's likely to become recurring, so hopefully will provide a consistent service to the customers and regular work for the service providers, and with both of them happy, a steady stream of commission for myself.

So, assuming that I had the website in place, a good app that monitors the availabiliy of the service providers, their reviews, and their service delivery. What order should I build the user base??

My assumption would be that I want to get lots of service providers to sign up (pre-launch), and then start driving client traffic to the website. It would be frustrating for customers to not have access to many service providers, but also frustrating for service providers to be getting no work.

What is the strategy to start such a company that keeps everyone happy and incentivises early adoption?

If I plan on charging a 10% commision, then I could offer service providers 1 year @ 5%? Is that a good option?

Should I start by targeting the whole site globally, or focus on building up service providers in a particular geographical area? As the service provider needs to be near the customer. I think I could grow this once it took a little hold, but initially, no service providers would have feedback, etc.

Does anyone know anything about how this type of company starts out??

Should I focus on getting service providers first, or try to get clients pre launch as well? What incentives could I offer them?

This is different to any other kind of business I have started before, so I'd love to hear some insights from those who may have had some exposure to this.

I look forward to your comments.

Regards,
-Steve

 

[Ashley_Price]

My assumption would be that I want to get lots of service providers to sign up (pre-launch), and then start driving client traffic to the website. It would be frustrating for customers to not have access to many service providers, but also frustrating for service providers to be getting no work.

This is a Catch-22 situation because service providers won't be interested in signing up until you can prove the site's hit rate, but customers aren't going to visit the site unless you have a wide enough range of service providers.

From what you are describing though, I don't really see how this is going to be any different to a lot of the similar sites (Check-a-trade, Rate-my-builder, FreeIndex...).

 

[Steve Samuels]

Thanks Ashley,

I know it's a catch 22, but many other sites move through this, I was just looking for opinions on strategies for doing so. I regulary use PeoplePerHour, and they must have started with no users. I wonder what their early days were like.

Sorry for (purposely) not going into detail, what I'm planning will not just be a directory, it will be targetted to a very specific service for which I can provide some useful tools to help both parties feel their getting extra value. In that sense, very similar to Uber. It's not just a directory of taxi companies, it's that little more that makes it a lot better of a Service.

I also run an engineering consultancy, and if someone told me they were launching a way to get me more work in 3 month, would I like to get in early, I'd jump at the chance, as long as there was no large investment of my time, I'd go for it.

Any thoughts?

 

[Ashley_Price]

I know it's a catch 22, but many other sites move through this, I was just looking for opinions on strategies for doing so. I regulary use PeoplePerHour, and they must have started with no users. I wonder what their early days were like.

I would assume they had very deep pockets for a very large advertising/marketing budget. it's like the sites like "Monster" and "Indeed" seem almost to come out of nowhere and suddenly have lots of CVs or job vacancies on their site right from the word go. There must have been someone (or organisation) behind the scenes willing to finance a lot of promotion in the first instance.

 

[Ashley_Price]

I also run an engineering consultancy, and if someone told me they were launching a way to get me more work in 3 month, would I like to get in early, I'd jump at the chance, as long as there was no large investment of my time, I'd go for it.

You wouldn't ask for proof of how they were going to do this? You would just take them at their word?

 

[Steve Samuels]

I understand that the promotion of such a site costs money, I'm just trying to understand the strategies of promotion so money is spent effectively.

Even if I had £1M to spend on promotion, if I didn't spend it wisely and with a good strategy to start, then it would not necessarily be a success.

 

[Steve Samuels]

You wouldn't ask for proof of how they were going to do this? You would just take them at their word?

If they offered me an opportunity that had potential for good gains, and cost me little, I wouldn't ask for proof. I'd play the odds.

I've done this many times, and often my small investment of time yield nothing, occassionally it yields a lot. As soon as I am required to put in real time, or money I ask for proof, or assess the likelihood of the prospect

 

[Nochexman]

Should I start by targeting the whole site globally, or focus on building up service providers in a particular geographical area? As the service provider needs to be near the customer. I think I could grow this once it took a little hold, but initially, no service providers would have feedback, etc.

Offer an incentive to customers to sign-up for the service before it starts - whatever it is - for a discounted rate for the next thirty days. Maybe pay each person £10 when they 'open an account' and subsequently 'make a purchase'. Once you have punters it will be possible to recruit the service providers.

 

[threenine]

It's obvious you should provide a Freemium model initially.

restrict the number of free leads that providers get to a arbitrary number i.e. 10 for a period of time, that is suitable to gain enough traction.

You can always change/alter/amend your terms at a later point. There is more than enough evidence to support that this is typically what most organisations do

 

[Steve Samuels]

Thanks Threenine, You say there is lots of evidence, can you oint out any case studies or examples I can read about further?

 

[threenine]

Dropbox, Atlassian , Uber, amazon

Basically any of those big massive start ups , reading back on their history you'll find that to start off with they all did a lot weird and wonderful business model engineering in the beginning to gain traction.

Even the TOMS (shoes ), has a great book.

You are not facing a challenge millions haven't faced before. The truth there are only a few that succeed.

Take a little time, and just read the Everything Store - Jeff Bezos , and start something that matters - Blake Mycoskie.

Read and study how they did their basic business model engineering in the beginning. Truly mind blowing, and often times wonderfully simple ideas to solving seemingly complex problems.

 

[Dean Shepherd]

Don't ask the service providers permission, just list them.

Use a different tracking number for each provider and monitor how many calls they receive via your app/website.

Show them the data, get them to sign up for a free trial (where presumably you handle the payment, like Just East / Uber) and charge no commission.

If it works, tell them the price for staying on the system.

 

[Dean Shepherd]

If somebody came to me and said, "You know those 30 prospects that called last week? Yeh, that was me."

I'd sign up.

 

[Dean Shepherd]

Also, check out Servicestart's business model which is slightly different. Their customers get a summary of the lead/enquiry and pay for the contact details on an individual basis.

 

[Steve Samuels]

Hi Dean,

Thanks for your comments, but I think you may have slightly misunderstood what I am aiming for. I am not intending to create directory of existing service providers, but a platform for people/companies to provide the service. Similar to Uber, in the sense that it isn't a directory of existing taxi companies, it's a platform that makes it super easy for the end customer to get the service in a consistent way, and whoever is providing the service MUST sign up. Very different to a simple directory of businesses.

The reason for this approach, is that for the service in question, I can adda lot of value to both client and provider for little ongoing cost. And adding great value to all involved is the only way I think I can create a viable business.

Once again though, thanks for your input.

Cheers,
-Steve

 

[Dean Shepherd]

I get it. But right now you have nothing. You are asking people to sign up on a promise. They won't. Or at least not in the numbers you need.

Quickest way to get people on your system is to just put them on there yourself. If you wait for them to take action then you may never get there. Once you have traction and a proven model then people will be biting your hand off to join the party.

Hopefully, like Check-a-trade, it will then be seen as almost essential.

What industry sector are you looking at?

 

[japancool]

Start a business in Middle east

There's a big difference between a middle MAN and the Middle East.

 

[threenine]

I would also suggest, typing in the into YouTube the term Lead Generation Website it will undoubtedly return millions of results, and among those results there will be clear and simple tutorials to follow and samples of million and one folk doing exactly the same thing.

One of those will undoubtedly be:

This guy even provides you the exact steps he follows.

 

[Steve Samuels]

I get it. But right now you have nothing. You are asking people to sign up on a promise. They won't. Or at least not in the numbers you need.

Quickest way to get people on your system is to just put them on there yourself. If you wait for them to take action then you may never get there. Once you have traction and a proven model then people will be biting your hand off to join the party.

Thanks Dean, That's definitely an approach I'll consider to see if I can bring elements of than in, however I don't think it makes sense to just start out like that for me. It would strip away many of my USP's and mean what I was offering was less valuable, and with more competition around.

The good thing about the sector I am looking at is that there is a lot of monthly traffic of people looking for how to break into this sector as a freelancer, as well as a lot of people looking for the service.

I make the comparison to Uber, as there are similarities in the sense that it would be likely to attract people who are not currently working in this sector. I don't think Uber started off as a directory of taxi numbers. Out of curiosity, if anyone knows how they did ramp up, that would be great to know. Did they attract would be drivers first, then market to the masses, or hit everyone at once?

I know that I can drive a good number of people who want to provide this service to the website, for a reasonable cost. I appreciate that converting these to signups is a challenge, and I may only be offering a promise, but I am offering it to people who are actively looking for this, and a promise is more that is on offer elsewhere.

Are there any examples of sites that have started as a directory, and then moved completely away from that? I imagine the shift would be a very big challenge.

Thanks again.

 

[Steve Samuels]

To answer my own question above (If anyone is interested) Apparently Uber used a Zig-Zag Strategy.

From what I can tell, they launch one city at a time, focus on recruiting drivers first, then once they have a small number of drivers they offer incentive to riders. It seems this is how they bootstrap by location, and I actually think this would work well for me!

Once some initial traction is gained in an area there can be focus on building it up, and incentivising referrals, but all in all I think this makes sense.

Hopefully this is of some interest to others here.

 

[threenine]

Well done and good luck!

 

[menetworkjadaltd]

I think targeting locations is the way to do this

 

[Dean Shepherd]

It would strip away many of my USP's and mean what I was offering was less valuable, and with more competition around.

What are your USPs? You are giving us so little information that it is hard to make constructive suggestions.

The good thing about the sector I am looking at is that there is a lot of monthly traffic of people looking for how to break into this sector as a freelancer.

Are those freelancers going to be the service providers? Whose quality your reputation is going to rely upon? Isn't that like Uber signing up learner drivers?

I make the comparison to Uber, as there are similarities in the sense that it would be likely to attract people who are not currently working in this sector.

I'm pretty sure Uber recruited existing private hire and cab drivers, and still do.

Are there any examples of sites that have started as a directory, and then moved completely away from that? I imagine the shift would be a very big challenge.

Again, you are not giving us enough information to give a reasoned response. As well as Uber, you mentioned Just-Eat and PeoplePerHour as examples. Unlike Uber, those are directory sites and are intentionally so.

What is it you are actually proposing to do? Or do you want us to guess?

 

[Nochexman]

To answer my own question above (If anyone is interested) Apparently Uber used a Zig-Zag Strategy.

From what I can tell, they launch one city at a time, focus on recruiting drivers first, then once they have a small number of drivers they offer incentive to riders. It seems this is how they bootstrap by location, and I actually think this would work well for me!

Once some initial traction is gained in an area there can be focus on building it up, and incentivising referrals, but all in all I think this makes sense.

You probably need to be careful about believing the stories the company has spun since it broke out of its initial area of operation. For a start-up, like yourself I guess, you might be better advised to look more closely at how things were done earlier on, in LA, which may have had more to do with leveraging friendships and some pump priming investments.

'Zig zagging' sounds great in principle, but first you need to zig before you can zag!

Best of luck.

 

[RBS]

I think Steve is trying to create something like minicab price comparison website, similar to Taxicode.com

There are lot of them out there, well established and with deep pockets....