Starting one online market — a platform that connects many buyers and sellers — has many advantages for entrepreneurs. They have low overhead costs and allow for scalability and global reach, among other pluses.
But none of this can happen if you don't know how to operate and market your marketplace to both customers and businesses. To get the best practices for finding success with the markets, we searched Michael Wolfwho has had his fair share of victories.
The wolf helped to put ClassPasssupernatural, Lululemon and FreshDirect on the map, and two years ago stepped into the role of CEO at ResortPassa service that gives people daily access to hotel and resort amenities without having to stay overnight. In a statement announcing their partnership with ResortPass, Hilton calls it the perfect way for people to access No. 1 reason why people love to travel: rest and recharge.
ResortPass has grown 5X under his leadership. Here is his best advice for market entrepreneurs.
The key to offering your market to businesses
I always say that you have to inspire them to what's possible (for us, it was the increase in guest of the day and the new revenue stream that resulted), and then show them that you have the solution perfect for doing this. Hotels are focused on ancillary revenue, but many have yet to successfully bring the day guest to their properties because they haven't embraced or understood the revenue opportunity there.
When we ask hotels what their goals are, they say it is to find new sources of income. When we tell them we can engage a local client who will return frequently for day breaks, and beyond that will send out-of-town friends and family to the hotel, they immediately see the potential. For your business, find out what your 'niche' is – the customer who needs to enjoy your product but isn't currently without a more accessible version of your product they can try.
This approach should not be unique to hospitality. Entrepreneurs in other industries can innovate by thinking about the same question that prompted us: “What is one type of ancillary revenue today that could become a standard part of revenue for their industry over time?”
Common misconception about driving a market
We hear the “two-sided market” all the time, but it's actually three-sided – your company is the third side. It really only works if the buyer wins, the seller wins and your company wins. I say it's like a triangle. Ultimately, it should be an equilateral triangle where users, partners and the company see equal value. It won't necessarily always be static – at different parts of the journey you may choose to give users or partners more value, especially as you scale the business – but balancing these components eventually over time is essential to ensure success continuous.
The importance of “front channeling”
A key part of running a transparent and efficient organization is making sure you don't end up with a process—whether it's a marketing campaign idea or a potential new hire—with reservations, concerns, or game-changing feedback. Instead of relying on a “back channel” to gain trust at the end of the process, starting with the “front channel” can create a better result. Front-channeling with trusted peers and external sources allows you to get key data points and more complete information to make the best decisions right from the start.
Related: From idea to execution – 4 key things you need to do for startup success
The most important focus for a startup leader
Bottom line, employment is the most important area of focus. I recommend spending a large percentage of your time – up to 80% – on recruiting, especially for a growing business. When you attract the right talent, I truly believe that everything will flow from there. When you're hiring, one of the most important things to index is instincts: assess whether they have strong instincts and also trust yours when assessing them.
As an entrepreneur, genuine excitement is a great asset and essential to building a great team. I share my enthusiasm for our business every chance I get, in every setting, and candidates often comment on how contagious that excitement can be.