Businesses across the world have operated on a competitive marketplace structure for as long as there has been commerce. But in the 21st century, the marketplace has become more competitive than ever before.
With constantly accelerating innovation, established businesses have clashed with ever more disruptive new ones. With the rise of companies like Airbnb and Uber, and technology like machine learning and blockchain, new businesses are able to gain a strong and even equal footing against more established companies on the market.
Businesses are becoming multi-level, and are able to engage directly with their customers. It's crucial, in starting a tech business, to understand how to survive and thrive in an ever evolving marketplace.
Having the correct approach is what separates the successful from the unsuccessful in a marketplace world. And knowing how to put your business in a commanding position is critical.
Understand the characteristics of your marketplace
Using Amazon as an example of strong marketplace knowledge, understanding all aspects of the market is crucial. Having this insight into common services within the purview of companies similar to yours allows you to enter the market seamlessly. Understanding market characteristics will allow your business to assess average pricing, allowing for you to set competitive prices while maintaining a profitable business model.
Targetting a critical need in the market
Entering the market as one of a long line of businesses covering the same demographic is not a guarantee of anything – except tough challenges in the long term. Instead, from understanding your ideal market, the question of what challenges are faced by a sector of the population can be the kingmaker for your business.
Targetting populations and problems faced by those populations, and either centring or basing your business on solving them, allows you, as a company, to stand out vibrantly in an otherwise homogenous marketplace.
One of the critical things to understand when setting up your business, is the ability to make your site, model and processes intuitive to whatever consumer base you're looking for. Having a high degree of intuitiveness and functionality will allow you to present your company in a unique and positive light compared to would-be competitors. Truly excellent functionality allows you to bring together both buyer and sellers with relative ease.
Mastering the Network Effect
Selling to one person in a digital marketplace of billions is no big achievement on its own. The trick lies in knowing how to ride that momentum, making one sale turn into hundreds, thousands and so on. Mastering any and all avenues of communication are crucial to being successful in generating this 'Network Effect'.
No better platform than social media exists for companies to excel at creating this customer snowball effect. With over 3 billion users, making your brand visible on social media spikes the chances of a user purchasing something from your company. According to research, over 66% of users would visit a company they find on social media.
Knowing how to keep both parties interested
Being a marketplace business implies that two parties are involved at all times; buyer and seller. Having the transactions take place is all well and good initially, but you need to make sure you have the mechanics in place to make sure both sides stay.
Fostering a significant degree of trust for buyers helps solidify brand reputation, while also leading to customer retention, and contributing to the broader 'Network Effect'.
Alongside this, giving sellers within your business a better level of convenience by working with you, will ensure that you'll always have products to sell, and will maintain strong partnerships. This will allow your company to develop what it's able to offer to its potential buyers. For more information on how to successfully launch your startup, download our free guide. If you would like to get in touch simply contact one our team of experts.