How to identify latent demand and validate a marketplace startup idea
Facing a similar challenge?
- Talk to someone who has been there before
- Get unbiased insight from industry veterans
- Work through the issue with a mentor by your side
The first step is to identify a pain point.
Prior to co-founding Respondent, Harri was working as a researcher at an agency.
He had just been promoted and was responsible for revenue generation and profitability. He noticed our most significant cost item was participant recruitment, but even though they were paying a lot of money he didn’t feel like they were getting the right types of participants into their study.
Which was weird, because the participants were sometimes offered hundreds of dollars to participate.
This was the friction that became the genesis of the idea that became Respondent.
After identifying the pain point, it’s important to spend some time trying to validate that a business can be built around solving that pain.
Coming back to the example with Respondent, it was Harri’s firm opinion that the only way to validate a business is by having people pay for your product or service.
As a marketplace is really only a way to connect people at scale, they started small. The first step was to find someone willing to pay us to recruit participants (demand side).
They built demand by pursuing heavy outreach via LinkedIn. Once they found someone who was willing to pay them to recruit participants, they went out and found participants (the supply) that matched the customers’ criteria.
Harri Thomas – Co-founder at Respondent.io
This informed their sales strategy, which increased efficiency and margins.
If you’re in the process of validating a marketplace idea, speaking to a mentor who’s “been there done that” could be useful.
Below are just a few mentors on GrowthMentor that have experience growing marketplace businesses.
MENTORS WE RECOMMEND FOR THIS TOPIC
“Harri is a very thoughtful, carrying mentor who is eager to provide value to his mentees. I received some important recommendations that made me reconsider my objectives; also, I felt really supported and listened to through the conversation. I would recommend Harri to anyone who is launching a company and needs some guidance on bootstrapping, product market fit and business model.”
“EXTREMELY awesome conversation 🙂 Harri helped give me more clarity on priorities and was diligent in learning more about the company prior to our conversation. Looking forward to having more conversations with him in the future and highly recommend founders and executives to chat with him!”
“Mindblown by my conversation with Chris. If you feel like you sit in a unique place in your org within Growth/Product, and are looking for feedback or guidance in navigating a structure that makes you feel like a square peg in a round hole, Chris has a breadth of amazing experience and insight into what’s worked for him creating impactful and unique roles in growth and product… and it’s just a damn pleasure to chat with him.”
“Chris is a super nice, smart, and transparent person to talk to. After we each described what our journeys had looked like over the past year or so, he shared what he does to stay sane in such an intense role. Much appreciated! When I was talking to Chris it felt like we were old friends and had a really fun and thought-provoking conversation. Whether it’s philosophy, car building/racing, keeping your cool, or how to grow an international product, Chris is an open book. I highly recommend anyone in growth schedule a call with Chris.”