What I’ve learnt as product lead for a marketplace startup
This year I joined Studiospace as the Global Product Lead, venturing into the world of B2B marketplaces. While having worked in Product at a startup before, marketplaces have unique complexities and interesting challenges which I wanted to share.
Here’s some of my learnings so far:
1. Measuring the right things
Whilst the digital product is an important part of any startup, the core product of a marketplace is the supply and demand itself, so tracking marketplace metrics is extremely valuable to make sure the marketplace dynamics are working as intended.
Here are the top 5 essential marketplace metrics Studiospace is tracking to help understand the health of our marketplace and the reasons why:
● Gross marketplace value (GMV): a useful overall health indicator to understand the overall value flowing through the marketplace
● Liquidity ratio: carefully balancing supply and demand to ensure there are enough suppliers to offer their services as well as buyers.
● Win rate: making sure there are the right processes in place so that briefs that buyers post convert to projects for winning agencies
● Average brief value: the value of projects buyers are putting through the marketplace helps us build information on the cost of different types of services
● Client satisfaction: we gather agency and Studiospace feedback from clients following projects who give ratings across different metrics to help understand how happy they are with the service provided
2. Capture early and often
Once we knew what we were measuring, we focused on gathering the relevant data. As we are still early in our journey as a marketplace, not all of our data has been captured to provide a full picture. Luckily, we’re able to see the general trajectory - which has been looking positive and helps us learn and iterate our proposition and features:
● Gross marketplace value (GMV): Studiospace has just hit the £4m in sold briefs, with another£1.5m of client briefs in the pipeline
● Liquidity ratio: we currently have 107 agencies live on the platform and 20 live briefs, meaning we have rough a liquidity ratio of 5 agencies to each brief
● Win rate: Out of all the briefs that have been sold, completed and lost (66), 60 of those were successfully converted with a conversation rate of 91%
● Average brief value: the range of briefs varies hugely but averages out to around £70k (or around $120k for us Aussies)
● Client satisfaction: Out of 17 project feedback ratings for our agencies that we’ve received so far, our total client satisfaction is at 90%
3. Take the time to dig deep
My favourite example for a company who does this well is Uber, who use detailed data dashboards to really understand what’s happening in each city and act accordingly. Even though life at a startup can be fast-paced, it’s worth taking the time to really understand your data and the broad trends.
Our marketplace metrics primarily help us understand how our marketplace is performing (1. are we growing? + 2. are we loved?) and we use this data to help in making product decisions:
● Gross marketplace value (GMV): is our business viable and are we proving our Studiospace proposition in-market? £4m+shows there is lots of demand from buyers (which we are also seeing through metrics like repeat purchase)
● Liquidity ratio: do we have the right ratio of client briefs to agencies? We are still learning what the right mix is as we want enough diversity of agencies, but also want to make sure agencies are staying engaged by getting enough briefs. A ratio of 4-5 agencies per brief seems to work well but we want to try bringing in more briefs
● Win rate: Are briefs well enough qualified and agencies good quality so that briefs go from proposal through to project delivery? Our high figure of 91% is ideal in order to keep both clients and agencies happy and not waste anyone’s time and effort.
● Average brief value: average brief value (£70k) helps us understand the type of projects going through the platform and the size of clients, which is what we want to push so that we can help our indie agencies break into bigger corporates, which can sometimes be hard
● Client satisfaction: Really important in helping agencies understand what they’re doing well and where they could improve, but also give us an overall picture if clients are happy with the service provided to them (90%) and helps us monitor quality in the marketplace.
4. Future metrics
We have many more marketplace metrics we are capturing and many new metrics we’d like to capture once we have a critical mass of data. Some of the ideas are:
● Time to close: The amount of time from the first conversation about a brief with client and agency till winning of the project. This is an important measurement to understand the speed of our process, which is quicker than the traditional methods.
● Agency promoter score: As part of our agency feedback ratings that clients provide after a project, we are working on a unique Studiospace metric that we will be looking to launch very soon.
● Studiospace validation: As we build up our roster of vetted agencies, we’d like to attach some form of value to how we assess agencies for quality.
● Level of automation: We want to automate certain aspects of the workflow as much as possible so we can make the process more efficient and seamless. In turn, this will help free up the Studiospace team to focus on adding value to clients and agencies where the human touch matters.
● Loyalty: Currently we measure this via repeat purchase i.e. account growth, but we’d like to get more depth in how we measure retention and loyalty.
At the risk of sounding cliche by quoting Peter Drucker, the idea that“ what you don’t measure, you can’t improve” has again become clear to the global product team at Studiospace - hence the focus on pinpointing metrics that matter and developing our capability to measure these (and future metrics).