Tips on Growing a Two-Sided Market Business or App

Chris Michael Harris, Executive Producer


The hardest part about building a two-sided market business is having multiple different sets of target audiences and then nailing your marketing…

I help people master their 60-second (oe Elevator) pitch every single week…

And without question, the people it’s hardest to pick it up are those with a two-sided market business.

Half the time they pitch as though they are appealing to one side and our mentors would prefer they pitch the other side.

The next week they do indeed pitch the other side and the new set of mentors wonder why they’re omitting the side they pitched the week before.

It becomes almost predictable how people are going to respond.

And backing up to a macro level to accomodate BOTH sides only makes the pitch seem vague and not specific enough.

And that’s just talking about Elevator Pitches…so imagine building a business in this manner.

Now, not all cases are this severe.

If you look at concepts like Airbnb, Uber or really any Gig/Shared Economy platform, there’s usually commonality or a central value prop that is uniform across the board.

Or at least it’s very easy to articulate that in very short order.

For example: Think about Uber…

People need to make side or supplemental income + people need rides to places.

At which point you can then jump into countering your objections.

In the case of Uber (and Airbnb) it’s alleviating safety concerns.

I’ll readily admit I DID NOT think Uber would work purely on the premise that it’s glorified hitchhiking with a smart phone.

And thus, the feedback loop creates a more secure environment so much so that parents will send their kids off to school or soccer practice in an Uber…

Quite literally contradicting any piece of advice my parents gave to me about cars and strangers.

So, let’s address what YOU can do to get both sides of your market to see the uniformity and opportunity in your own two-sided business or app.

Uber was glorified hitchhiking with a smart phone before the feedback loop alleviated safety concerns.

Photo by from Pexels

Personally, I think the most important thing you can do is WORK IN THE INDUSTRY…

Scratch your own itch, as one of my favorite books, “Rework”, states.

Because this gives you a fundamental understanding of WHAT is the CORE problem in the industry.

Ideas are great and I’m all for folks just spawning new ideas.

But literally everyone I know that has or is building a successful company of any type, including two-sided market businesses…

Started with the roll-up-your-sleeves work.

Like my guest on the podcast today, Ben Hodge, his business started as a means to just collect and hold money for venues and corresponding musicians.

He knew that was a huge issue because, guess what?

He worked in the industry and saw it was a BIG problem not having a third-party, reliable source to hold the funds.

And it started with him just literally hanging on to the cash like you’d see in an illegal street race in a Fast and Furious flick.

That has now evolved into him providing that same service but now ALSO connecting venues with musicians as well.

However, without the basic knowledge and understanding of the real issue, no way he arrives at his current business model.

And even if he somehow did, no way he understands their world enough to communicate the real value.

So, the first step is to immerse yourself in the world you want to serve.

Even if it means “starting from scratch.”

Every overnight success started with an everyday hustler…

You are no exception to that rule…nor am I.

In fact, I do the exact same thing in every new industry I enter.

“How do I literally insert myself in that world?” is the first thing I ask myself.

For many of you, this might be easy.

Because you might have a job currently in the industry you want to innovate.

View that as an investment, not a waste of time.

Because you’re literally being PAID to basically intern for your own startup!

For real!

Next, you’re going to want to think about how you can scale the basic iteration of what you’re doing…

Again, this isn’t entirely (if at all) different than the advice I would give to any other business.

But, fortunately for you, the same holds true for two-sided market businesses.


So, figure out how you can scale your efforts from what Ben was doing as just the middle man collecting money in one town to doing it at a larger capacity.

And the reason I want you to do this first BEFORE you start investing heavily in some app is because you need more of a sample size.

You’re going to have different customer avatar sets and they may value things differently than what you think.

For example: Let’s say Ben has been working with one, mid-sized venue.

And for them, it’s a GREAT value add that he can collect and transmit payments for them.

But, for whatever reason, for a smaller or larger venue either the transaction is too small to require an intermediary OR too large to trust a dude walking around with their cash…

In this case, Ben has built a model solely based on ONE customer avatar profile…

Mid-sized venues.

Maybe that’s enough, based on your market…

But often times it isn’t.

Further, maybe he finds MOST venues only prefer a specific kind of music.

Maybe their ideal customer (or client) avatar is middle-aged, Empty Nesters.

And the musicians he has agreed to work with play heavy metal.

You see what I mean here?

There’s so much more at stake here than just showing it works once.

And I see many people sink LOADS of money into Dev before they’ve TRULY sampled their entire addressable market.

I’m not trying to be a Debbie Downer, just don’t skimp on the market research and take affordable steps.

“Your current job may actually be like you getting paid as an intern for your own startup…”

Okay, so now you’ve served your entire market…

Fat people, skinny people, rich people, poor people, large venues, small venues…etc, etc, etc.

At this point you are likely going to KNOW the commonalities.

In other words, what’s the CORE essence of your value prop?

I can’t tell you what it is without context, you’ll just know it when you see it.

And it’s going to show up in your marketing.

Let me give you an example.

We are reading “The Power of Habit: By Charles Duhigg” in my Book Club Community.

And one of the stories I was fascinated by was the story of how Febreeze got it’s start.

Did you know Proctor & Gamble almost scrapped that entire project?

And here’s why…

The leads for that initiative THOUGHT people would buy Febreeze because they knew they had stinkiness going on in their homes.

They BETA tested certain markets and did follow ups with particular individuals.

What they thought was dead wrong.

Because they THOUGHT people would use it because they were embarrassed about the stink.

But that wasn’t it at all…

At least not for EVERYONE.

But they built this entire notion around ONE test subject that worked in a park and was exposed to skunks…

Like, a lot of skunks.

She struggled with her dating life as a result and literally cried when she discovered Febreeze and told her story to the P&G folks.

They took that ONE sample and built a marketing strategy around it.

And it flopped…

To the point where, again, P&G almost killed the entire project.

Out a desperation (and to keep their jobs), the leads for the team went back out to survey.

And what they found was the MAJORITY of people liked the reward they got after cleaning and finishing off with Febreeze.

Febreeze was like the “job-well-done” cherry on top of their hard work.

And that then exploded the product to what it is today as well as all of the similar products that have followed.

See why it matters to be thorough?

Freaking Febreeze almost failed due to poor marketing and limited sample size.

Don’t make that mistake…

Know your people at scale and your marketing will be calculated, not vague.

People bought Febreeze because it signified a job-well-done…and not because of stink awareness. Not knowing that almost killed the project.

Photo by Volha Flaxeco on Unsplash

Now, this next one is REALLY slick and I’ve seen it done beautifully.

In fact, I’m a part of a startup that is utilizing this very same tactic.

And that’s to literally leverage one side of your market against the other.

And I don’t mean in a combative sense.

Rather, to influence the other side that your business or app is the place to be.

Here’s the example I saw that might give you an idea of what I’m talking about here.

Electric Scooters are all the rave here in Austin, TX.

I just saw an article where we’re getting 500 more from some new company.

It’s literally bananas, they are everywhere.

But 18 months ago from the time I’m writing this they barely existed.

Being an early adopter, I hopped on one, filled out the info and was shocked when I got to the clear opposite side of downtown for just 3 bucks!


And I thought Uber was economically friendly!

But here’s where the magic happened.

Upon completing my rental, I was prompted with a message that said, “Hey! Did you enjoy your ride?”

Once I selected 5-Stars, it said something like, “Great! We need your help to bring more scooters to Austin!”

It told me it would only take 3 seconds and to start by clicking the button below.

Now, the key here is that it did INDEED only take three seconds.

When I clicked the button it opened up my email app on my phone with a drafted up email.

The email said something to the effect of “Dear Representative, I want more scooters in Austin because….”

It went on in very diplomatic fashion as to why scooters were a good thing in my city.

What’s more is the Mayor of Austin was already pre-filled as the receiver of the email AND they CC’d his office staff.

Why does that matter?

It works on MULTIPLE levels…

For one, the Mayor is now receiving bulk messages directly FROM the user.

And his office staff is seeing that he’s getting them.

So it not only showed him this is important but they kind of put his pants to the fire by pinging his staff too.

Now OTHER people know he’s getting this messages at large.

And instead of the COMPANY, in this case Bird Scooters, begging bureaucrats to give them a chance, they leveraged what was probably an agreed upon BETA/Pilot test into a full fledged fleet in the city.

Pretty amazing, right?

Talk about the power of technology and reversing control in the situation.

And here’s the thing…

You can EASILY use a similar tactic.

In this case, the city wasn’t paying for the scooters but Bird absolutely needed them on board.

You may have a situation where both sides are paying customers.

So, imagine this…

If there’s no Uber Drivers do you think anyone is going to Uber?

If there’s no Uber Riders do you think anyone is going to drive for Uber?

You have to constantly use one side of your market to grow the other…

And vice versa.

Hopefully, in your case, you maybe have a little bit of time before transactions occur, unlike Uber.

With a platform like that, people expect to be able to immediately USE it…

Which creates an entirely different set of problems and probably significant marketing efforts plus a massive budget.

And in the early days you may remember Uber folks posting up everywhere (like gas stations) trying to get people to sign up and drive.

It’s a whirlwind, let me tell you.

But focusing on signing up ONE side of your two-sided market may enable you to leverage others into signing up too.

You’ll have to use your discretion as to which side makes more sense to approach first.

And hopefully they can operate knowing it’s something you’re working on with a TBD release date.


The last thing we want to talk about today focusing hyper-local to start.

Which may sound contradictory to what I told you before about working with all sorts of folks to find commonalities.

But in this sense, what you want to create is a small ecosystem as a BETA run.

College towns are wonderful for accomplishing this.

Because students are often early adopters…

And if you think about it, a college campus is really like a mini-town.

My first business was launched from a college town and it really allowed us to keep our costs low plus run controlled testing with a motivated audience.

Now, students are totally broke so keep that in mind.

But if it’s something they care about enough it’s funny how fast mommy and daddy’s credit card will make an appearance.


Making your concept work in a smaller ecosystem gives you a case study.

It also means it’s more likely for you to knock down doors to get started.

I just interviewed the Founder of Axon, Rick Smith.

They are the largest provider in the country (possibly the world) of advanced Law Enforcement Equipment like Body Cams and Tasers.

He told me they started out of a garage and focused first on giving free demos to police stations in small towns.

Like I said, it’s much easier to get a foot in the door but it also gives you a controlled, not chaotic, BETA opportunity that you can use to take to larger ecosystems once you’ve grown.

All businesses start small, or at least they should.

Facebook started for just Harvard Students, then Ivy League Schools, then all colleges and eventually half the population on earth.

Your concept should be no different.

Take affordable steps and manage your growth while also starting with your low-hanging fruit.





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