Mike from Offsiter talks with Jason Droege about launching marketplaces. They cover minimum viable supply liquidity, balancing supply and demand timing, and why launching with around 100 restaurants across multiple cuisines and tiers matters for marketplace success.
Chapters
Thanks, Mike. How's it going, Jason?
Hey, how you doing? Nice to meet you.
I'm doing well. Thanks for, uh, for coming on today. Awesome stuff. I've been digging into your, your threads and enjoying them. Um, I am the founder of Offsiter. We help companies manage offsite planning at scale. So we have a platform with a toolset and then kind of a managed marketplace experience within that. Um, so talking about kind of geographic rollout and thinking about how you capture market share, Has been awesome. I wanted to dig in there and see when you guys thought about going into a new market, what was the kind of the playbook that you guys ran? And then kind of secondarily, were there any big network effects that you guys knew, like, all right, we need to focus here because this leads to, you know, some, some secondary measure that, that we know is impactful for us?
Yeah, totally. Yeah, I think, I think this touches upon an interesting topic that I that I've been trying to formulate some way to express it in so it's not a ramble, like maybe in tweet form.
Hello.
It's this idea of minimum viable supply liquidity. And so it's like when you're talking about expansion, you're like, okay, well, how much supply do I need? I mean, I'm using supply abstractly, right? But how much on the supply side do I need before it's minimally interesting to some excited group of people on the demand side? Because if I overscale, and I'll answer your question more directly in a second, but if I overscale supply, there is a time component to that. You have people going out trying to get supply, and then the supply you get on day 1 is asleep by the time you're at day 100, right? So you have this fuse where it's like, how long can I wait before I start trying to throw demand at the initial contracted supply my launch? This is like a super hard problem. And like one of the problems that I find so interesting about marketplaces and early businesses in general is like, I don't know, like what the answer to that question is, like so subjective to your business and you as a leader. Like, how, you know, how good are you at getting that early supply that might have been waiting for 6 weeks for you to launch? Are you just a masterful salesperson? You can keep them engaged. Or are you like, maybe not as much and you gotta launch, like all these weird nuances start to come into play whenever you start digging into details. So like the way we looked at it just very simply was we just took a guess in our first city and then refined it. But the guess turned out to be pretty close to right, which was we launched with 100 restaurants, that was the bar. And we launched across like 7 cuisine types. And then you had to have like, you know, we had like tiers of restaurants from a restaurant quality standpoint. So it was like we had to have like 5 or 6, like, you know, big brand, big, you know, I forget what we call them, local favorites type brands. If we could get a chain, then great. But that was really hard in early days. And then just made sure we had enough stock on the shelves. So if we didn't have the best Mexican restaurant, at least we had like 2 or 3 Mexican restaurants. So if you were willing to not order from your favorite place, but you still wanted the convenience of delivery, you had somewhere to go. And then once you launch, it becomes a lot easier because then you have a live product for everybody. But it was sort of like 100 restaurants and then sprint as hard as you can after launch to get that to like 200 or 300 because you should be closing more. And then on the demand side, Depending on the competitiveness of the market, and this is the needle threading again, so interesting about startups, is like if you're in a market without much competition, you can be a lot more austere on your demand generation. You know, whatever channel, like I said, PR, BD, whatever, even using restaurants to generate your demand, because a restaurant's getting 2 orders a day if they've never gotten delivery before. Or never done delivery before, never got the demand. They're just like, whoa, free, free money. But if they're used to getting 3 or 4 orders a day from a competing provider, you have to be a lot more aggressive on the demand side to be relevant to them so they don't turn their like little restaurant tablet off. And then it was just more expensive. And so I don't know that there's like a here's how you do it, but like understanding what baseline need your customer has on, like on the demand side of the marketplace. So that they start to engage, I think, is really important because if you overestimate that, you're gonna spend way too much time generating supply that then starts to atrophy before you launch. And if you do too little when you launch, demand's not gonna be interested and the supply that you have on is not gonna get anything and it's gonna be really churny and you're gonna have a big problem. Awesome.
