Platforms are complex creatures. They are complex to design and – perhaps even more so – to launch, as the condition to attract users from Group A is to attract users from Group B, and vice versa. This so-called “chicken-and-egg problem” implies that it takes a lot of convincing to get the first users on board. What certainly helps is to make sure that the first users (at least in one group) do not bear any cost when joining the platform. And if they can get extra benefits when they participate, it is even better. These are the two strategies that the co-founders of Stasher used to convince the first users to join their platform, as Jacob Wedderburn-Day (CEO) reports in an episode of ‘Two-Sided. The Marketplace Podcast’ (Season 1-9).
Stasher
“Stasher is the world’s first luggage storage network. Acting as an agent, it connects you with hotels and stores that can keep your luggage safe while you enjoy your time in a city” (stasher.com/about). Launched in 2015 in the UK, Stasher now provides travellers with thousands of locations, in more than 400 cities, in a bit less than 40 countries worldwide.
Stasher is a typical two-sided platform as it connects a ‘supply side’ (hotels, restaurants, shops, and other types of businesses that have some unused storage space) to a ‘demand side’ (travellers in need of short-term storage for their luggage). It also belongs to the category of sharing (or collaborative) platforms, “which create an open marketplace for the temporary usage of goods and services often provided by private individuals” (European Commission, 2016).
Like any platform, Stasher ran into the chicken-and-egg problem. As Jacob Wedderburn-Day admits:
“It took us a little while to sign on the first shop since it always does. I think, when you’ve got a completely new and baffling idea, people are, like, ‘What?’.”
Make adoption costless
As we explain in Chapter 4 of our book, potential users are often reluctant to join a platform because of the specific assets that they need to possess or acquire to start operating on the platform. By specific assets, we mean resources like knowledge, capabilities, and time, which require investments that are specific to the platform (and, as a result, have little or no value in any alternative use). To ease users’ adoption, platforms may want to bear the costs of these assets themselves. This is a solution that Stasher implemented, as Jacob Wedderburn-Day explains:
“If your suppliers really need to manage their listing and stuff, then it does become very much a kind of juggling act. And one of the benefits that we’ve had is because we’re providing an ancillary service to our suppliers. We can get them set up and then, actually, they don’t really need to do anything after that point. They can just sort of manage it fairly passably and, as bookings come through, they fulfil them. And I think that’s quite nice because there are pros and cons. I mean, it makes them slightly less invested than they would be if they were sort of managing it day to day. But at the same time, it also means that you can sign them up and they can be quite patient. It might take a month before they get that first booking, but it’s fine because you won’t have lost them by that point.”
Offer extra benefits
Another way to ease users’ adoption of a platform, which we explain in Chapter 4, is to provide them with benefits that accrue independently from the interaction with other users (so-called ‘stand-alone benefits’). Such benefits facilitate the launch of a platform as they lift the constraint of attracting two groups of users at the same time. Stasher’s co-founders did something along these lines. Jacob Wedderburn-Day reports the sales pitch they developed to attract suppliers:
“As a shop, you depend on regular footfall of traffic. You want as many people coming in as possible. And what we’re offering you is a way of getting footfall that you’re actually getting paid for. Like it’s an acquisition channel that you get paid to have running.”
Strictly speaking, these are not stand-alone benefits (as they depend on travellers’ participation) but extra revenues that shops could gain on top of what storage earns them. Yet, the idea is very similar.
In the interview, Jacob Wedderburn-Day also shares how Stasher managed to build trust among users, a topic that we regularly address in this blog (here). Check it out and, while you are at it, listen also to the other episodes of this podcast series, which is a … stash of useful tips for platform entrepreneurs.
