B2B service marketplaces (think translation as a service) are an extraordinarily lucrative startup category. But despite the incredible potential of these platforms to generate outsized returns, many fail. Why?
Ivan Smolnikov, the CEO and founder of translation service startup Smartcat, investigates why certain marketplaces seem to grow while others stall. His conclusion is that unlocking value for both sides of the marketplace is much more challenging than it appears, and the most successful, next-generation marketplaces are going to come from highly networked, efficient platforms for complex projects targeting specific verticals.
Smolnikov then gives a step-by-step guide to optimizing marketplace growth.
One reason is that several service providers must often work together to complete a single job for a buyer, requiring a complex workflow from end to end. As a result, it’s difficult for marketplaces to not only mediate service delivery but also make it significantly more efficient for buyers and suppliers. If both the buyer and suppliers don’t see a significant efficiency gain other than being initially matched, why would they continue using the marketplace?
Perhaps the first step in building a company is just figuring out what to call it. Adam Zelcer, who founded Adboy, explores some tactics on how to optimize a startup’s name.
