Learning how to build a business just got easier with the launch of Sharetribe’s Marketplace Academy
Sick of being the low man on the totem pole of sharing economy services such as working as an Uber driver or a Fiverr seller? If so, or you at least care about the cheap nature of the sharing economy, you may like a startup called Sharetribe: They give the power back to the people by empowering them to create their own marketplaces, not just participate in them.
Last week, the Finnish P2P commerce gurus over at Sharetribe announced that their Marketplace Academy had made it to the airwaves, opening up a wealth of essential resources for their users on how to run a smarter business.
If you missed our first report on this great startup, they offer users a platform template where they can operate their own marketplaces. Differing from simply offering e-commerce capacity on a website, Sharetribe’s platform allows users to open a space where others can buy and sell items or services, letting the owner generate revenue from the trade.
People from across the globe have used Sharetribe to set up shops from more common motivators such as those looking to sell a wedding dress (Finnish), to other types of communities like people who like to ride waves or bulls, such as this group of “Rodeo queens.”
The company got its start in 2008 when co-founders CEO Juho Makkonen and COO Antti Virolainen built a marketplace for students at their university to resell their used textbooks. What began as the answer to a local need developed into a business when they decided to offer their services for other universities. They founded Sharetribe in 2011 with the academic market in mind, but then pivoted to the entrepreneurship community in 2013 when they recognized the potential for how it could open doors for budding marketplaces.
Sharetribe’s model works on two different paths: an open source code that can be downloaded to a server by anyone for free, and a paid option that starts at $49 a month where the company maintains the upkeep for the user’s site. Virolainen told Geektime in a conversation at the SLUSH convention last month in Helskinki that many users have opted for the paid service even though they have the technical skills to handle it on their own.
One of the most crucial elements of Sharetribe’s product is that it has a payments infrastructure built into it for processing credit cards and services like PayPal, which for anyone who has tried setting up a shop on their own knows, can be claw-your-eyes-out frustrating when it doesn’t work. This can get even trickier when you are the person managing the marketplace and are responsible for making sure that your users are getting paid, while of course verifying that you are receiving your commissions as well. Ensuring that there is a workable payment system remains one of the limiting factors in expanding their service to some of the more remote locations around the globe.
They now have a paying customer base of around 500 users, which is handled by their 11-member team at their HQ in Helsinki.
Why the Marketplace Academy is so important for user success
Sharetribe’s platform comes as a standard template and it is up to the user to build their marketplace from their basic blueprint. It is like those basic WordPress templates, but currently only offers one design.
While many of their clients already operate their successful sites, the Sharetribe crew understood that they could have help a wider base of their users do better if they offered them more resources, leading them to create the Marketplace Academy.
“We’re noticing that for each successful marketplace, there are at least nine others that fail to get any traction,” said Makkonen in their release to the press. “Many mistakes that early stage entrepreneurs make could be avoided if they knew best practices for building two-sided marketplaces. All that advice has been scattered around the web. There hasn’t been a centralized location for marketplace-related information. Until now.”
The resources include blog posts by thought leaders and step-by-step guides for building an online marketplace. Makkonen tells Geektime that the Academy’s approach starts from the idea (how to come up with and validate an idea), and moves on to how to design the language and look, transaction, and discovery process, how to build up the supply, tackle the chicken and egg problem of connecting the provider with the buyer, and of course how to build community and generate revenue.
“It has taken a lot of time for people to find the right info about how to build their businesses,” says Makkonen, “But we’ve tried to compile here a set of tips and tricks to help people get started faster.”
The articles on the site are written partially by the team, as well as others like Cristóbal Gracia of the OuiShare network, one of the biggest groups working on improving the sharing economy.
Democratizing the sharing economy
Makkonen and the Sharetribe crew are not shy on how they feel about the current state of the sharing economy.
“It has a lot of benefits that it can bring where people can buy from one another instead of just from corporations, but the problem is that most of the profits are going to the big players,” explains Makkonen, expressing the frustration that many people have with the domination that players like Uber have had on the market.
“What we are trying to do is democratize the ecosystem, and make it accessible for anyone to create their own marketplace,” says Makkonen of Sharetribe’s vision. “I feel that right now the providers are tied to the big international platforms and they need to play by their rules. There should be a possibility for these local providers to set up their own marketplace platform where they set up the rules if the marketplace tries to impose unfair restrictions on them.”
“Just like WordPress has allowed a wider group of people to become publishers, we see Sharetribe as the format where these local providers can set up their own marketplaces. Instead of having to be dependent on the big international players, they can benefit more from their work and enjoy more of the value.”
“What if Uber drivers in New York didn’t want to work with them anymore due to the constrictions?” proposes Makkonen, saying that drivers could run their own car service and avoid paying Uber the large fees, putting more money in their pockets.
Imagining the future of Sharetribe
While the team is hoping that the Marketplace Academy will be a stepping stone to making their service more accessible for users, they have bigger plans for expansion. Again turning to the example of WordPress, they hope to open up their platform to third parties who can develop alternate themes and apps, offering a richer set of options for users.
Makkonen tells Geektime that they are developing the necessary APIs now and that this will be their main focus for the coming year. While the source code currently allows users who know CSS to make alterations, this will be a great boon for the less technical among us.
The U.S. is the biggest market for their service, while the number of users from other Western countries is rising quickly, explains Makkonen. “There’s also lots of demand from places like Brazil, Nigeria, and India, but we don’t have payment infrastructure.” They hope that they will be able to find solutions to these issues and enter these markets.
While Sharetribe’s platform offers users an opportunity to build their businesses, it is worth pointing out that this is far easier said than done. As Makkonen noted above, the vast majority of these marketplaces — like most businesses — fail, and can (hopefully) fail quickly. The big players have reached their position at the top for a very good reason. They have invested the time, money, and when you get down to it, high level of talent into making their platforms so successful. This model is extremely hard to replicate.
So far it seems like the platform’s success stories are those working in very niche sectors, and are most likely tied into their communities, such as the Rodeo Queen example mentioned earlier.
Building a following, especially one that reaches a wider audience, will likely prove a challenge for budding entrepreneurs.
That said, it is hard not to be excited about Sharetribe’s potential not only as a place for doing business, but for building communities. Their platform still has a rudimentary look and feel to it, but that is only on the topical dimension.
When you get down to the ideas behind Sharetribe’s concept of allowing anyone to open up a marketplace for a community, it is about much more than just money.
It is not just that they are allowing one person to generate revenue by having an e-commerce element to their site: They are providing a force multiplier where each client can create a place for others to buy and sell. So not only are they teaching a man to fish, but they are giving him the net for the whole village to take part in, providing sustenance for all.
They are also able to address smaller communities that would otherwise be unable to build something similar on their own. Selling goods and services can build engagement for groups that might otherwise be too niche, helping them connect with each other.
Finally, much like how WordPress changed the dynamic for publishers, Sharetribe could have a similar effect on the marketplace landscape. By putting the power to create business, trade, and interaction back into people’s hands, they are helping to lead what could be a revolution to how we relate to e-commerce.