5 Best Strategies for Seeding and Scaling a Two-Sided Market

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5 Best Strategies for Seeding and Scaling a Two-Sided Market

two side of market

Many startup owners would agree that attracting and retaining the right customers for the business isn’t an easy task. Equally challenging is to attract and retain the right suppliers. Seeding and scaling a two-sided market becomes even more difficult as the business grows.

Companies find themselves in dilemma with the needs of consumers on one side and that of suppliers in the other. This is a situation commonly known as a chicken-and-egg problem.

If your company has no sellers, buyers would leave. Similarly, sellers would leave your company if you have no buyers. As a small business, therefore, you have to look for strategies that will help you strike a balance between the two sides on the market. That’s the only way you can survive. Here are some of the best strategies for seeding and scaling two-sided markets:

Pre Investment

Make a Significant Pre-Investment

Making a significant upfront investment offers some level of guarantee to both producers and consumers. They will find it safe to join your ecosystem since they know you aren’t going anywhere. Meeting the basic needs of each side of the market will make them stick around for long-term promises. Close to zero pre-investment would actually scare both making it difficult for your company to grow. At the initial stages of the business, you have to choose what to build first wisely.

already existing market

Tap into Already Existing Markets

For a small business, building own networks from scratch is only tricky but costly and time-consuming. Consider working with an already established network of suppliers. While marketing your products and services, target already existing consumer platforms. Tapping into already existing markets makes easy to attract the desired subset. However, you will have to attach some value that differentiates your business from other competitors.  

Ideally, a cooperative strategy would work in cases where there are no established markets. In order to make scaling easy, consider breeding quality on each side of the market. Let suppliers provide quality materials and in turn offer quality deliverables to your clients.

Transparent In Your Operations

Be Transparent In Your Operations

While seeding and scaling a two-sided market, you should consider being honest, respectful, transparent, and accessible to your markets. You need to be open and apologetic. Whenever supply does not meet demand, let your long-term customers understand the developments. The more you are proactive in your approaches, the more your markets will give you a benefit of the doubt. This way, you get time to strike a balance between the two sides.

single side strategy

Implement a Single-Sided Strategy

You can scale both sides of the market by focusing entirely on one side. For instance, you will always have return business if you treat your customers well. Return business would, in turn, created demand for supplies thereby attracting producers. If you are dealing with two different markets, attracting and retaining high-value users will attract several other users who would want to be associated with them.    

play a role of chicken

Play the Role of the Chicken

You can actually act as the producer then use your consumer-base to attract more consumers and other producers. This strategy is useful during early stages of the business when you cannot afford to attract both sides of the market due to limited resources.

If you are planning to tap into a two-sided market, keep these strategies at finger-tips. They come handy in solving a chicken-and-egg situation whenever it arises.  Is your business looking for a reputable consultant in the UK? Choose to work with weaccountax. Our professional accountants have continued to help businesses from a wide range of industries. We provide expert advice tailored to specific business needs. Feel free to contact us for online cheap accountants in east London. We are here to serve you.


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