Marketplace Software Entrepreneurial | Success Strategy

If you've got the next Airbnb idea in your mind and you're an entrepreneur, but you're thinking, oh, no, I've got to find a tech person to build it, I got to outsource it to someone, I got to go through all the tech stack and it's going to take forever and cost a fortune, then I'm going to bring you an amazing, amazing discovery. I was so excited when this company reached out to me today because Juho Makonen is in Finland, Helsinki, and they built a company called Share Tribe and they enable you to launch a marketplace in a day without any coding. That's right. They've got over 1400 marketplaces already live, and it's really affordable, really simple to use. And I'm delighted that Juho is here as the founder to tell us how it works. Juho, welcome to the show.

Thanks a lot, Chiem, for having me. So great to be here.

Well, it's great to have you here because I started a business back in 1998, an Internet company which is kind of like a marketplace. I gathered up data from events companies and I syndicated that to websites. But my number one expense was tech people and it slowed me down massively. And with Share Tribe, you've enabled so many entrepreneurs to build businesses. And we're going to talk about one out of Singapore called Drivelar. We're going to talk about one called Gritty Kitty, which is in the music business, sorry, Gritty in pink and loads more. So, Duo, tell us about Share Tribe and where does it fit in to the entrepreneur's journey?

Yeah, definitely. So basically our tagline is marketplace software for entrepreneurs. So basically, with our tools, it is possible for somebody to build a technology platform for their marketplace, essentially in one day or in a couple of days without any coding for many ideas. And it's also infinitely extensible. So if you have something more unique, it's also possible then later to tap into our APIs and custom code and then add any unique integrations or features you want. But the basics are there out of the box. So in the early stages, especially when you are validating the business concept, you don't really need necessarily a technical co founder to work with you and you also don't need funding, which is the other big thing that many entrepreneurs think that, okay, I really need to have like tens of thousands or hundreds of thousands in the bank to be able to launch a business like this.

Well, and I think you we're seeing now with platforms like, you know, lovable and also With Manus, for example, these AI tools that are enabling us to build products. But you've had ShareThrive since 2011, so it's a very mature product. And you've got 1400 customers around the world already. Why not explain to us just some case studies for, you know, for me and my listeners who are thinking, oh, so a marketplace you destroy like an Airbnb, how does it work?

Yeah, exactly. So basically when we talk about marketplaces, we talk about these two sided platforms. So you have like multiple people or organizations on both sides. So multiple suppliers and multiple customers, multiple buyers, multiple sellers. So some examples like you already mentioned, for example, one of our customers is called Drivelaw and they are essentially Airbnb for cars. So basically they allow anybody to list their car on the platform and another people come and rent it. And then when they came to us, that was 2018 and there were basically two people and very little money and an idea. And today they raised 10 million. They are now in two countries, Singapore and Australia. They have hundreds of thousands of users and processing millions in bookings. So I think that's one really nice example of what kind of things you can do. And so we have lots of, lots of these different categories in terms of we have people selling products, we have marketplaces that, for services. So there are lots of different, different types of marketplaces.

Yeah, and I saw a couple that I really liked. I like, there's one for swimming, sharing swimming pools, and there's another one which is called Gritty in Pink, which is for women in music. So you really are covering sort of physical assets and services for really niche businesses as well, aren't you? You heard? So later on, Joe is going to explain the business model that they've got and why they found freemium actually failed when it came to getting businesses launched. That's really, really an interesting story. You talk about the challenge of the dual sided marketplace. I've had a wonderful number of guests on my show. We talked about Amar earlier, who has the car business. There is always the challenge of how you populate a dual sided marketplace. You have to have vendors and you have to have customers. With Sharetribe, what's been your experience of what works in terms of the clients and how they overcome that fundamental sort of chicken and egg problem?

Yeah, that's a really good question. And I think I love the episode with Amar, for example, where he shared how they had a very niche, specific solution for that. And that's also what I found that in general, there's probably no silver Bullet. So you will need to have a specific strategy for how you solve that. And usually that starts from getting one side there first. Usually that's the supply side. But. But beyond. But the exact strategies do differ based on like your exact concept. But I noticed that there are some common patterns or maybe common mistakes that people do when doing this. One of them is that you need to start with something that is really, really targeted. So that, that basically means that you target a very specific narrow niche or focus. Even if you're envision is something like, okay, this is going to be like a marketplace for renting everything. But in the beginning you probably want to only do like, okay, I'm only going to be doing power drill rentals in Brighton. Because that's kind of like the. That way you can just really target it to people who want that specific thing. That really allows you to already with like a relatively small group of people on both sides, you can get something that is working and then you later expand. So having that clear focus and narrow niches in the beginning is very important.

Okay, so really is the case of the riches are in the niches to start with and you need to build and build that out. Let's say you're doing power tools in Brighton, which is a glamorous example. What's your experience of how your clients are going to the market and getting people on board? Because we, you know, we find that people are building product and then there's certain sort of anxiety about going to the marketplace. We feel it's never quite ready, never quite good enough. So what have you seen works in terms of your niche? But then how do you get to that niche? How do you get them onboarded? Because there is that chasm to cross, isn't there, where they're in the room and you're saying you need this and they go, well, I'm fine without it. So how do you find people have overcome that?

Yeah, one thing is that usually you want to use the fact that you are new to the market in your advantage. And like what you can do usually is that you first go to the suppliers or the people who would be offering goods or services on the marketplace. And you go to them, you know, like we have this exclusive deal, so the first hundred suppliers who will join will be getting like a deal that nobody else will be able to get. And so far, right, we are at this number. And that means that, for example, you get no fees for the first six months or no subscription, depending on your business model. And that basically means that because Usually in marketplaces, the business model works so that you are charging from the transaction. So that means that it's actually, it doesn't really cost anything for the suppliers to join only if they make sales, then they have to pay something. And then if you combine that with like some really good deal, then it's really often actually easy for them to get, hey, okay, I'm going to try this new thing and like if I join now, it's better to join now than join later. And then you can kind of do something similar with customers.

Okay. So implicit in that is that you set up a price of some kind, which is a perceived value and you feel like you discount that to get people on board, even though it's not necessarily costing anything. So you get that first, say 100 to get some critical mass, a minimum viable product. Right. And then also what you'd said in there was that the vendor has to believe it's better to join now than later. So do you also kind of have to sell the sizzle? Do you have to give some projections of where we're going, where we're building out this platform? Because otherwise their tendency can be especially big. Big companies, corporates say, well, I'll wait to see if it works. You know, how do you overcome that?

Yeah, and that's a really good question. And, and definitely like the big, big part of that is that you need to do your research. So you need to be able to demonstrate that, okay, I know this market, look, there's this untapped opportunity. This is my go to market, like how I'm going to get customers. That's a big part of that, naturally. The other big part of that is that you should just make it very easy for them to say yes, you should do all the possible for them in the beginning. You can do things that don't scale. You can basically set things up for them. You can just say, okay, look, there's very little cost. In the event that this wouldn't work out, you wouldn't lose that much. And in most cases that is also very attractive for them. Okay. They are entrepreneurs out there and suppliers. They are bombarded with various opportunities. So you really, like, if you need it, make it super easy for them to do something like this.

That's a great point. You host. So it really is about making it as frictionless as possible, possible. And I've had a couple of interviews with entrepreneurs who have really done the onboarding for the client so that the client really only gets upside. It takes them no extra time costs Them no extra money, but they get to participate in the new platform. And that seems to be a really important model.

Yeah, exactly. And maybe then the other strategy, on the other hand is going exactly the other way, which is going saying, okay, we are very picky about who we choose, so we only choose the best 1% and that's going to be our brand. And we have come to the conclusion, we look at the market, we think that you are one of the top 1%. And then, so then you can like play with this more of like a stamp of approval that you actually go through. You have to do quite a lot of trouble for the supplier to go through the process. But then for them it feels like, okay, I'm getting this certification for my business that I'm part of this exclusive club and actually nobody others cannot join. So it's almost like I'm getting like additional certificate. And that, that in some occasions can also be really powerful strategy.

Yeah, that's a really good thought. And so I suppose you had to think about where your marketplace is going. If you say it's an exclusive club or if it's a mass market club, your approach exactly is going to be different. Let's just talk about how people are getting started. And you had an interesting comment because before we started recording we were talking about, you know, you have a sort of an onboarding process which has a fee and then you have a very reasonable price. When people have got it launched, I'm going to share it. You could take us through the pricing strategy because As a company, ShareTribe, you know, you learned a very interesting thing about when you give something away for free, which I think for me was really interesting. Could you just share the pricing structure that you've got and how people get up and running with ShareTribe?

Yeah, sure. So today, basically the way it works that when you get started with Sharetribe, there's a 14 day free trial. After that, if your marketplace is not yet ready to be launched, then you can subscribe to our build plan, which is 39amonth. And then you can stay in that plan until you launch. And then when you launch the marketplace, then depending on the functionality you need, the plans that allow you to go live start from 99amonth. What was interesting here is that when we launched the current version of our product, there was, it was kind of like a V2. So we redid lots of things and like we launched a new thing a year and a half ago. And when we did that initially we actually, the build plan was completely free. So we thought that, hey, this freemium model is really popular. It's probably going to work. So we are going to get so many more people starting, and then we are going to see more of them launching. And what we actually noticed is that people just wouldn't launch. And we realized that it's really easy and fun to build, and it's very scary to launch. You know, you're like, people. This is like one of the things we notice people making. They just spent way too much time before actually doing the scary thing and going to your actual customer. So you. Because it's fundably in the planning and deciding, oh, let's still add this feature and that thing there. And like, when that plan didn't have a cost, then, like, it further increase this barrier of launching. And we noticed that when we introduced this barrier, hey, actually, you need to pay. Already in the build stage, we saw more people starting to launch their marketplace than we had been seeing before. So freemium didn't work for us. But the reason was very surprising and something that didn't occur to us before we tried it out.

Yeah, Juha, I love that, because the psychology of freemium that you give free is kind of received wisdom. And when you and I were talking before we started recording, I said, that's fascinating, actually, that that kind of received as that a monthly recurring income or cost rather forces someone to make a decision and to launch or to withdraw. I notice as well that when you have your free trial, you do not take a credit card payment. And that's a central question for many people. Why did you decide to not take a credit card when people sign up?

Yeah, so that definitely is a part where we felt that in our case, people who are trying our solution out, you really need to figure out, like, okay, they are figuring out what their marketplace is like, and are they able to build that with that tool? And we realized that as marketplaces are relatively complex, it will take some time for you to figure out, okay, is this the right tool for me? Can I build the thing exactly the way I imagine with the resources I have? And we noticed that you just really need to go through that period before you kind of, like, land on a decision. And then we felt that, like, by introducing a required credit card right from the beginning, we would kind of impose that on you. Okay. You kind of, like, almost need to make the decision before committing or before really knowing, like, if this is the right thing for you. And also we noticed that it's really difficult, actually, to pick the plan before you can really test data things and notice that. Okay, right. Actually, it's going to take me this much time. These are the features we need. So then you choose the one. It just felt easier to leave that point for the later moments.

And I raised that because on so many occasions I've got to one of these platforms says put your credit card in and you're going, well, then the scare stories of you can't stop them billing you, for example, and people saying, yeah, but I keep getting billed even though I didn't. And it creates a level of anxiety and friction in the business, which isn't necessary because you've got enough confidence in this being the first part of your funnel, haven't you? And if people are going to want to stay, they will upgrade. And I think that mechanism you've got of charging people at a discount to what it's going to cost to actually run the marketplace is great. And let's face it, you can't get an hour of a developer's time for the price of renting your entire platform you host. So it's an amazing, an amazing story, an amazing platform. And presumably I will ask the obvious question. It's multilingual. Presumably, you know, for you mentioned about the Singapore company because they're working in English language if they're in Australia. Is it multilingual if someone wants to use Share Tribe across markets?

Yes, indeed. So you can basically it. We have several default translations and it's also easy for you to translate naturally. Your when you're building a marketplace, big part of the language is actually your language. So it's the terminology. Like in Airbnb you have a host and guest and. And so on. So a big part of that is also just choosing the exact terminology and then you can use that in your own language in the marketplace. One thing that we have actually consciously left to something to be custom developed is like having multiple languages in the same marketplace. Because our thesis actually is that you should not do that early on because you should stay very focused on just one language for a very long time. Because this is one of the other mistakes maybe that we see marketplace doing early on that I actually have interviewed quite a few successful marketplace entrepreneurs and I always ask them what is the biggest mistake you made? And they say going international too early that they always like, say that like, you really need to get the core marketplace mechanics working well enough. And sometimes that can be challenging, especially if you have some investors and investors saying, hey, you need to scale and you need to scale it. You need to learn. Look, this is the thing I'm after this metric like this. I need to have, let's say a conversion rate of visitors to customers of 30%. Otherwise my business model won't work if I don't get there. I just need to iterate on that. If I have that in one city, I know this is going to work everywhere, but I just need to get to that point and then I can scale.

You heard. I'm so glad you said that because I had an Internet business in 98, I mentioned and I had investors and I was in Singapore at the time and I expanded to Hong Kong and then we invested in making the platform with Mandarin. Actually we then ended up with simplified and traditional Chinese to make our lives even more complicated for Hong Kong and for China. And we were overwhelmed really by the technical translations and we didn't focus so much on getting more customers and really finessing the economic driver of the business. So it's tempting to expand, isn't it, because it looks good as a press release, but actually it can lead to a lot of tears, really, and a lot of unnecessary expense. Share Tribe, you've had the business since 2011. It's, you know, you've bootstrapped it. If I'm, if I'm, if I'm right to know that. Right. So you've built it out of cash flow yourselves, so credit to you.

Yeah, so we did have also like some investors in the beginning. So today it's fully, fully owned by the team and fully funded by its customers. But we had some investors along the way.

Okay. But if you like, it's a cash flow driven business as opposed to sort of a VC loss making, market share grab kind of business. Would you like to tell us about how you're building the brand of Share Tribe? Because I guess you also have, as an entrepreneur, the challenge that we all have of getting the business noticed. We'll be back after a quick break.

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Yeah, absolutely. And so, so really often this is still the biggest challenge we face. Like really often we meet with an entrepreneur and they say, oh, I already have my platform. If only I had heard about you one year ago or two years ago, I would have saved 100,000 plus, which I've already now lost. And that's still like a common thing. So definitely the big challenge for us is like, how do people hear about us at the stage when they are just thinking about their marketplace idea? And the way we are solving this is mainly by following this advice on content that I heard early on from a content marketer, which is that basically your content should be solving the same problem than your product. So in our case, our product is solving this problem of building a successful marketplace business. And that's also what we created lots of content around. So we have our own Marketplace Academy where we write about all these things that our customers are struggling with and like all the best ways to solve that. And we've even compiled the best of that knowledge into a book called the Lean Marketplace, which basically is applying some of the lean startup principles that the specific case of online marketplace is. So definitely recommend you to take a look at some of those if you are building a marketplace business, whether you're using ShareTribe or not. I think you'll find some of those resources valuable.

Yeah. And I've got this for anyone that wants to go to YouTube and look at this. @jimajames.com you can see that. But@sharetribe.com you see they've got a Marketplace Academy. Juho has built an amazing one. Everything you need to know about running a marketplace. And then he also has a book which is the Essential Guide to Building an Essential Marketplace. And that's available on Amazon. But also you can download chapters one to six@theleanmarketplace.com I'll include the URLs, of course, in the show notes. So, Yuho, you're being very generous with your content and your knowledge. So that idea that your content needs to really lean into the product that you're offering and the problem you're solving, as opposed to it being sort of promotion, getting people to the product who are then trying to align what they read or heard about you and what they're finding and discovering when they actually get to the product.

Yeah, it's almost like the Lean Marketplace basically describes this process that we've seen and developed over the years on how to build a certain type of marketplace and then the product has been built around that. So naturally the idea is that if you get familiar with that process, then probably also like our tool will support you in the journey. So then naturally, hopefully you will think that our end up thinking that our product could also be like a good solution for you when you go about building your platform.

No, I can absolutely see that you've got to help people because if it's an entrepreneur, think about Airbnb, an Airbnb style business. As you say, they might be quite young or quite early on in their development if they haven't already started building something. And almost by definition they're asking lots and lots of questions, aren't they? So where, where are you going to promote Share Tribe? You talk about the content that you're generating and you've got the book and the academy. That's. But that's kind of if they've got to you and found it already.

How.

Are you doing the inbound marketing?

Yeah, so the. Well, a big, big part of that is just that people find us through Google or nowadays actually like we've notice lots of people actually lend to us from AI tools. So this is something. So if you ask ChatGPT today how to build a marketplace, the chances are that you it will recommend that, okay, sharetribe is a good solution for you, for you to build that. So which I guess is also like a product of us just having lots of content out there and lots of people recommending that content because they like that content, which then also leads to also AI feeling that probably our product is a good solution for this particular problem. I guess that's a big part of that. The other big part is then more going to communities where entrepreneurs are. Well, of course I'm here today at this podcast because we share a common audience, other entrepreneurs. And so that's really just what we try to do. Expose us in communities and founders and let us know, hey, we are here. So if you have the next idea, if you know somebody who has the next idea, they should check them. Check us out.

Yeah, and I think as far as I'm aware, Share Tribe is the only platform that enables someone with no code skills to build a marketplace. You know, that's why I was so excited to hear from you because I think this is an amazing platform because you're really liberating entrepreneurs that have got an idea but don't have a team and you're saving those entrepreneurs from the time and the effort of finding A tech team and the money that that takes. And often certainly in my experience, the kind of the friction between the founder, entrepreneur and the tech team because one wants to go quickly and the other often wants to keep building before going into the marketplace. So you're solving problems on lots and lots of levels there as well. You've been an entrepreneur, you've run the business now successfully for over 14 years. Is there something that you, that you've learned that hasn't gone maybe quite as as planned that you could share with me so that I don't make that mistake when I'm building a business?

Yeah, well, in our case, it definitely has been like an interesting journey. We actually started building like a Marketplace ourselves 2011, and we made all the classic mistakes that I already discussed here. So we really, the vision was to build something that was. There would be lots of different things, kind of like a sharing everything, like a type of thing, kind of like a Facebook for the sharing economy where you could like rent things like from lots of different people. And then, and then ultimately we ended up noticing that actually that really was not the right type of focusing. And luckily we ended up stumbling upon this idea when we were on the journey because we, we had built a platform and then lots of other people came to us and say, hey, you know, like, can I use your software for this thing? And then we, when we had, for a while we had been building our own business and that wasn't going anywhere. But at the same time we noticed that there were lots of other people who were interested in our technology and we realized maybe RX expertise is specifically in this area or the big opportunity that we can help entrepreneurs who have this need to solve this problem. So sometimes the learning is just that you need to launch something and the chances are that the initial idea won't work and then you need to survive and tag along long enough and just keep talking and keep iterating until you stumble upon something that will work. And that's one lesson that I've learned along the way.

That's such a great story. And as you say, sometimes, well, quite often we start off thinking we're building one business and we end up with people seeing the value in what we're building as something quite different. You say you're building a marketplace and people say actually you're great at building marketplaces rather than the marketplace you've built. So it's clever of you to pivot so quickly and to build out and build sharetribe so well.

Yeah. And then also afterwards we then the first vision of ShareTribe was that, okay, you can actually do everything without any coding, so you will never need coding at any point. And like we today, I actually believe that is not the case even with AI. I feel that all these tools, like Lovable, for example, Bolt and that you discussed, like these are really great and no code in general is really great for the early stage. When you're validating the idea that you're seeing it, does it have wings? It empowers you. But then if you look at all our successful customers today, they have their own tech teams like the big ones like Drivela, and they have developers building on top of our developer platform and APIs. And we have actually lots of tools that they built specifically for developers so that they can actually adjust the marketplace a lot because then the underlying beast actually ends up being really complex at some point. And then you really need to have like a team that runs it. So that is also like one learning that we learned along the way that actually you kind of like need to combine the ease and empowerment of no code with also catering for developers, for folks who are really scaling big.

Yeah. And I guess what you're really doing there is helping people to start prototype proof of concept, minimum viable product, get some customers in. And as you say, they might need to scale, maybe integrate a different tech stack, maybe a database. I found it lovable. They need to integrate a database somewhere or you need to integrate a payment module. It becomes more complicated the bigger the business becomes. But it sounds as though sharetribe is open in that sense, so people aren't going to get locked in and therefore frustrated. You host, that's also a really, really amazing opportunity for people to grow with you. As an entrepreneur, what would you say is your number one tip to me as I grow my business?

I guess something that I've learned is that it is really important for you as an entrepreneur to understand who you are as a person. What do you want out of life? And then you build your business around those principles. Because when I, when we started as entrepreneurs and we were in this startup scene, and in that startup scene especially, you can hear that they are really only kind of like a two ways. You can kind of go big or go home. So. So either you build the next unicorn or then you go out of business. And, and later we, we really learned that there are so many different paths in terms of like how you structure your company, how you build your product, how you build your team, and everybody's path is unique and what is really important is that the people you bring along to that journey kind of like share the same vision and have the same incentives and that's something different. So that's been like a very interesting learning journey for us along the way and something that I feel we could have also like paused to think more about already from the beginning instead of just following along what other people are doing. So that will be my number one.

Advice and I'm so glad you said that because the temptation is to think you've got to go big or go home because sort of social media is lionizing people that have made billions out of almost nothing in no time. Right. But also they pay an emotional physical cost. And for many people, especially some of us that are a bit later on in life with families to think about, our priorities are different. And so leading your own journey with the people that want to be on the same path as you is really, really important. Juho Makinen, tell us a book or a podcast that you find inspiring.

Right now I'm reading a book called Work with Source by Tom Nixon. It's about this idea that there's certain benefit in combining this kind of like an approach of self management which to some extent we do, etc. Which basically means that we don't really have the traditional manage roles but we have more like a setup where like basically every person is empowered to make any decisions and we like make decisions together but then at the same time to recognize that there's certain power in recognizing that this is what they call source, which is basically the who found it, who was behind the original initiative. And then so it's really interesting this dynamic between like this kind of like the leadership and like what it means to be like a founder but then at the same time empowering others and not just becoming a bottleneck that just all decisions have to go through you instead of like empowering others to do their own thing. And I really think that that's an inspiring and interesting take on if you are thinking about these teams as an entrepreneur.

Okay, we'll put that book link in the show. Notes Juho Makinen in Finland in Helsinki if you want to find out more about you and Share Tribe. How can they do that?

Yes. So sharetribe.com is our website so that's the best way to learn more about the product out of social media. Plat. I myself am Most active in LinkedIn so you can follow me or connect with me there just with my name. And then also we have the book Dalean marketplace@the leanmarketplace.com so if you're interested in our content, you can check out that or shutter.com academy where it's our free content in Marketplace Academy.

Yeah, so many great ways. And of course I'll put all of YouHo's links in the show Notes thank you so much for joining me. I say I just think you're liberating entrepreneurs with what you've built with Share Tribe and so I'm really excited to be able to share your story with other people. So thanks for coming on, thanks for building the platform and thanks for coming and sharing it with me today.

Thanks for having me. This was awesome.

Yeah, it's been amazing. So having built a marketplace myself and paid a small fortune and had battles with my tech, my cto, when I saw Share Tribe it was immediately obvious the problem that it solves. And over 1400 other entrepreneurs have built amazing businesses very quickly and in a very low stress and low cost way. So encourage you to have a look@sharetribe.com if you've got an Airbnb style business where you want to share assets between one side and the other of the marketplace, ShareTribe will help you to get up and running in no time at all. Thank you for listening to me, Jim James, your host on the Unnoticed Entrepreneur. If you've enjoyed this, do please share it with a fellow Unnoticed Entrepreneur because reviews are great, but what really matters is that another entrepreneur hears this story and that's really what I'm on a mission for. So until we meet again, I just encourage you to keep on communicating.