Stimulating Marketplace: Supply and Demand

19 Tactics to Stimulate Marketplaces

Getting the Core Dynamics Right

1. Get the harder side first. When the harder side (supply or demand) reaches its critical activity point, network effects kick in and value is created organically for the easier side. Discovering this through the sales and onboarding process, typically the harder side is the most valuable — once you have enough of them, the other side is 2-3 times easier to bring aboard.

2. Strongly attract to a niche and repeat. Find the small groups in your community that care most about your market ("white-hot center") and go after them. Usually, this is discovered by going broad enough to collect data that shows the most activity.

3. Subsidize the most valuable side of the market. Pay in cash to the most valuable side of the market — or to the most valuable niche within the most valuable side — to join the marketplace.

Building Initial Supply

4. Make supply look bigger with automation. Start the supply side by aggregating as much web data as possible to create a "perceived aura of activity".

5. Build one side as an email list. An easy and cheap way to start a market, especially if many buyers are also sellers and vice versa.

6. Hold meetups and gatherings. In the beginning, they can be effective for generating community, demonstrating activity, and getting direct customer feedback.