First a note for any seller who still has funds deposited that were not withdrawn via PayPal, please contact us directly at firstname.lastname@example.org. Here we’ll confirm the account balance personally and ensure any and all payments are made to you immediately.
It’s almost a year since we conceived, built and launched the first iteration of Folio. In that time we’ve learned a lot and we’re taking your invaluable feedback away right now to create something even more valuable for you, our dear users.
But, before that I really wanted to share what we’ve learned and some of the anecdotes and pitfalls we’ve experienced in the hope it’ll help others. Sure, some of this you’ve heard before but I know I can stand behind this with data points that underpin these insights definitively. I hope you’ll find this of value too, whatever your business.
Two sided market places are a huge opportunity but they’re also notoriously difficult to get rolling and it’s an often cited challenge in current startups. The cause is the now infamous chicken-and-egg scenario. If you have buyers but no sellers, they leave as their need isn’t serviced, conversely if you have a glut of sellers with no buyers they seek more fertile grounds in which to trade their goods.
More often than not, marketplaces start with the supply side by building an adequate inventory to make the marketplace an attractive ground for customers which in turn delivers more sellers as demand increases. It’s what AirBnB did, likewise Envato, Odesk and many other examples.
Now for some data on Folio. Our early figures were pretty solid:
- - 5,000 registered users in the first 8 weeks, clearly demonstrating a demand.
- - Immediate slowdown in user acquisition rates as soon as we lifted the pedal on community development.
- - Over 6 months 7% of the community uploaded content but quality was a major issue.
- - Steady growth from 100 daily unique visitors to 350 daily uniques.
- - Conversion rate for download was at 12% for free and purchased content combined.
- - This is misleading though as most content was free download.
- - Content quality directly affected the percentage conversion for download on site.
Some learnings from just this overview of the data that I can share;
We all talk about community management but it’s vital. Seriously. As a nascent business you rely entirely on positive human experiences and sharing. You need to be constantly active and vocal in the community. We noticed an almost instant downward effect on site traffic, registrations and downloads when we slowed down community outreach and development.
This may sound obvious but I believe it’s more pronounced than we all believe. When we as a team flooded the home page of the site with high quality graphic assets, download rates could go from 6 - 7% up to a spike of 18%. This is staggering and shows the direct affect of content quality on a home page or landing page. This for me reinforces the anecdote of the team at Airbnb going out themselves and taking better photos to improve the listing quality and increase trust amongst users. Don’t scrimp on quality. Have less content and be proud of it. Look to increase your conversion rate for that content, rather than flooding your marketplace with shitty content.
Selective User Acquisition
This may sound like a contradiction in terms but we’ve learned this the hard way. A huge lesson for me personally is in control over user acquisition. We rushed to acquire users and demonstrate to ourselves and investors alike that there was demand. What we in fact did was lower content quality across the board and scare off the very talent we sought to attract. This was a mistake and one we’re going to fix but definitely I need to accept responsibility - this was a mistake and I feel an easy on to make. Be patient, acquire the users you’d want to hang out with on a site first, they’re the founding members of your business and as such need to reflect the spirit of what you’re trying to achieve.
Keep it Simple
I want to open myself up to criticism here but we were overly ambitious and yes we have all talked about MVP and ‘lean’ as a concept but it is valid and not just hype. Our very talented team spent a lot of time (and money) in developing a quite complex first release and while there are huge components of this we will reuse in what we’re doing now, it simply wasn’t necessary to prove our hypothesis. We could have arrived at the conclusions we now have in probably 40 - 50% less time and I’m quite certain the same again in reduction of cost. I’m embarrassed to admit this as I consider myself very aware of the costs involved but I’d rather own up to this mistake, be cognizant of it and prevent it from happening again. We could have tested our entire business with a manually uploaded and statically managed product page. Sure it would have been ‘hokey’ but it would have served to test with. My mistake, I accept responsibility and it won’t happen again.
Value Great Feedback
Our community of early users and testers (yes, you) have been magnificent. I take huge encouragement from the feedback and knowledge we’ve gained and for this reason I would strongly urge founders to listen to their users. No matter how much it hurts. They’re the humans you’re asking to part with their time and money so they’re right. Not you and never forget it.
From here the future is really bright for Folio. Yes, we’ve overspent in understanding our market but the challenge isn’t unsurmountable. We also now really understand what you guys need and how we should be giving it to you. We’re working hard to get that ready and we’ll be back with something leaner, meaner, faster and easier for you to use really soon.
So for us it’s onwards and upwards. We’re so very excited for the future and working so much more with the wonderful world of the New York tech scene. Thank you all for your support!
In the meantime if you want to talk about our experiences to date or here a real dose of honesty, feel free to get in touch with me directly any time (@cilliankieran).
Thanks from team Folio and I.