A Two-Sided (Circular Economy) Marketplace

By YoungPlanet

Having successfully built up a community of over 100,000 users on the YoungPlanet app, we look to provide our top tips on establishing a two-sided (circular economy) marketplace.

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Two-sided marketplaces, a business model wherein you have two sets of users getting involved simultaneously – are becoming essential platforms for delivering viable peer-to-peer solutions for the circular economy in households. For example, the platform I helped create, YoungPlanet, needs parents to list children’s items they no longer need and also parents who want to take them off their hands. Without one or the other, the platform just wouldn’t work. eBay, Airbnb, and countless other businesses all operate two-sided systems. We operate one that is cashless, saves parents money and keeps things out of landfill.

 

If a two-sided marketplace is established well, it can see hundreds or thousands of people exchanging items, services or information. However, it’s a notoriously tricky business model to deliver on; you need to build awareness and convert two different types of users simultaneously. Attract one audience group too early, and they might not stick around whilst you work on getting the attention of the others. Try to attract everyone at once, and you could end up with muddled messaging and expensive marketing needs.

 

Having successfully built up a community of over 100,000 users on YoungPlanet, an app that enables parents to put no-longer-used children’s things to good use with new families and away from landfill for free, here are my top tips on how to approach it:

 

Start small, grow later

Starting by engaging within a micro-community can be a smart move. In our case, we appealed to local parents looking to reduce the environmental footprint and cost of raising children. To begin with, we launched YoungPlanet with a small group of parents in Hackney, which enabled us to pinpoint our marketing and communications efforts around the reuse and redistribution of children’s goods, do lots of on-the-ground engagement, and capitalise on word of mouth. From there, we expanded across London and then went national. We only moved on to each next phase once we were confident people were engaging with the product on both sides of the market, telling their friends about it, and when we could see the velocity of exchanges. Essential for keeping goods out of landfill and saving parents and caregivers money.

 

Take time to find your niche

Knowing your market and ensuring a genuine need for your service is the first vital step in building a two-sided marketplace. Take the time to research what’s already out there, identify gaps, and double down on where customers are underserved. Sometimes it makes more sense to start in a niche area and a particular customer profile and build from there, rather than trying to be all things to all people. There are many, many micro markets that could have an impact on waste and attract peer-to-peer contributions and usage.

 

Overdeliver to your first set of users

Your first users are your most important. If they like the product and service, they will become repeat customers and help generate word-of-mouth awareness, which is critical for growth and building trust. Offer early adopters the best possible customer service and make them feel special. Ask them for feedback and take on board their suggestions. Experiment with loyalty programmes or incentives for further use of your platform. If you can turn those early customers on both sides of the marketplace into brand ambassadors, your whole community will start to build genuine momentum.

 

Progress takes time, be patient

Building a two-sided marketplace takes time. Reducing our communities’ environmental footprint takes time. It’s better to nail those early phases and take the opportunity to iterate your product and offering before scaling up. Be patient and put enough time into building your foundations. It will reap dividends for us all in the long run if we continue to build velocity for the circular economy in UK households.