Chicken-n-egg problem

• 3 min read
Chicken and egg problem

A 2-sided Marketplace is a livelong war of balance of good and evil...

I mean demand and supply.

We can't bring too many developers to the platform if we don't have enough projects for them and vise versa.

On the surface, too many buyers can’t harm you that much.  In the worst case, they will just end up not buying from you. But don’t forget about 2 things that every business depend on: the return on investment and reputation

It harmed our reputation because we targeted a narrow audience.

Enough that early-stage startups we target now are a small group of buyers, recently we advertised on My First Million podcast, which was even a smaller audience.

We got a ton of requests but had to refuse to work with quite a few of them. This is what happened in the FB group of that podcast.

Potential clients discussing in a FB group

Some of those who commented were unqualified leads with projects too small for Lemon. They would have been fine for Coding Ninjas, but as you know, we've closed the Ninjas (I wrote about it in my previous update).

But at least 2 of those who commented were qualified and we simply didn’t have anyone to offer. Which led to a bad reputation among this group.

Having too many sellers is even a bigger problem for us.

We spend a lot of time with engineers before offering them clients’ projects. To discover if they have the right hard and soft skills we communicate with them, do tests and interviews.

After dedicating so much time, we want to give them a project within 2 weeks. Why?

If they don’t get a project, they find it elsewhere. If they do, they are pissed for wasting all this time. They don’t come back and tell all their developer friends.

And if we develop a bad reputation among engineers, we are done.

We partnered with dev shops to better balance the supply side.

They have their pool of developers that we can tap into when we have too many requests and can’t bring someone new fast enough.

But this requires an extra layer of vetting, as a dev shop scene is the wild wild west.

To make a sale, their managers might lie about developers’ years of experience or add skills they don’t have. Or even have a junior developer handle the coding while the senior developer faces the client.

To avoid this, we come to visit every dev shop in person, check their background, gather reviews from their past partnerships, test, and interview every developer who will work with our clients.

Our main pain right now is the lack of supply.

Because of a couple of campaigns on the MFM podcast and Product Hunt and our content marketing efforts, we have a steady flow of new incoming requests.

We have many talented engineers that have weaker English than we usually require. At some point, we’ve decided to try to lower the bar on the level of English as an experiment.

As a result, last week, I (replacing one of the sales managers while she is on vacation) had 9 interviews between the customer and the developer, and 0 converted into sales.

To bring more candidates, we are going all-in.

Most of our team will focus on building better awareness among engineers in Ukraine.

I am preparing a few articles for Ukrainian media that have engineers in their audience. We are buying ads and going to partner with all of the relevant influencers here.

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