Growth & Strategy
Personas
SaaS & Startup
Time to ROI
Long-term (6+ months)
OK, so last year I had a potential client approach me with what looked like a dream project on paper - build a massive multivendor marketplace platform. The budget was substantial, the technical challenge was interesting, and it would have been one of my biggest projects to date.
I said no.
Now, before you think I'm crazy for turning down good money, let me tell you why this decision taught me more about real marketplace validation than any case study I'd ever read. And more importantly, what I recommended instead that actually worked.
Here's what you'll learn from my experience:
Why most multivendor marketplace projects fail before they launch
The hidden complexity trap that kills marketplace dreams
My step-by-step validation process before building anything
The manual approach that proves demand first
How to build marketplace features that suppliers actually want
Whether you're considering building an AI-powered MVP or thinking about marketplace distribution strategies, this experience will save you months of wasted development.
Market Reality
Why most marketplace projects are doomed from day one
The startup world is obsessed with marketplace success stories. Everyone's heard about Airbnb, Uber, and Amazon's third-party seller program. What they don't tell you is the graveyard of failed marketplaces that never found their footing.
Here's the conventional wisdom every business school and startup accelerator preaches:
Build a beautiful platform first - Create the perfect user experience with all the bells and whistles
The chicken-and-egg problem - Launch with both suppliers and buyers simultaneously
Technology solves everything - Better features will naturally attract users
Scale fast or die - Get to market quickly and figure out monetization later
Network effects are automatic - Once you hit critical mass, growth becomes self-sustaining
This advice sounds logical because it's based on the success stories we hear about. The problem? It completely ignores the underlying mechanics that actually make marketplaces work.
Most entrepreneurs approach multivendor platforms like they're building a regular website. They think: "If I create the right features and make it user-friendly, people will come." But marketplaces aren't products - they're ecosystems. You're not just building software; you're orchestrating relationships between strangers who have never worked together.
The real challenge isn't technical. It's proving that your specific market actually wants to transact through your platform instead of their existing methods. And that's where most projects die - not in development, but in the harsh reality of user adoption.
Consider me as your business complice.
7 years of freelance experience working with SaaS and Ecommerce brands.
When this client approached me, they had everything startups are supposed to have: enthusiasm, budget, and a "revolutionary" idea for their industry. They wanted to create a multivendor marketplace for B2B services, connecting small agencies with larger enterprises.
The red flags started showing up immediately. Their pitch was built entirely around features: "We'll have advanced filtering, real-time messaging, integrated payments, automated invoicing, and AI-powered matching." Classic feature-first thinking.
When I asked about their target market, they gave me generic responses: "There are thousands of agencies looking for work, and enterprises always need more suppliers." Sure, but why would they use your platform instead of their current methods?
Here's what really concerned me: they had no existing audience, no validated customer base, and no proof that their target market was actually dissatisfied with current solutions. They just assumed that building a better platform would automatically create demand.
I've seen this movie before. In my years building websites and working with startups, the pattern is always the same. Entrepreneurs fall in love with their solution before they understand the problem. They confuse "this would be useful" with "people will actually use this."
But here's what made this situation different - I had recently read about how successful marketplaces actually start. They don't begin with technology. They begin with relationships and manual processes.
So instead of saying "this won't work," I proposed something that initially shocked them: test your marketplace concept without building anything.
Here's my playbook
What I ended up doing and the results.
Instead of accepting their project, I walked them through what I call the "Manual Marketplace Method." This approach tests marketplace viability before writing a single line of code.
Week 1: Market Research Reality Check
First, we mapped out how their target customers currently solve this problem. Turns out, most enterprises have established vendor networks and procurement processes. Agencies primarily get clients through referrals and direct sales. The "pain point" they wanted to solve wasn't actually that painful.
Week 2-4: Manual Matchmaking Experiment
Instead of building a platform, I suggested they start manually. Create a simple landing page explaining their value proposition, then personally reach out to 50 agencies and 20 enterprises. The goal: facilitate actual transactions by hand.
This is where it got interesting. Within the first week of outreach, the fundamental assumptions started cracking. Agencies were interested in leads, but not in paying platform fees. Enterprises wanted vetted suppliers, but weren't willing to change their procurement processes for an unproven platform.
The WhatsApp MVP Approach
Rather than giving up, we pivoted the experiment. What if the "platform" was just a WhatsApp group where I personally introduced agencies to relevant enterprise contacts? No technology, no complex features - just old-fashioned relationship building.
This manual approach revealed the real value proposition. It wasn't about creating a marketplace - it was about being a trusted curator who understood both sides of the market. The enterprises didn't need another vendor directory; they needed someone who could pre-vet suppliers and make warm introductions.
The Validation Framework
Through this process, we developed a validation framework that any marketplace founder can use:
Manual proof of concept with 10 transactions
Document exactly where value is created
Identify which parts actually need technology
Build only the automation that saves significant time
Network Effects
Understanding the true chicken-and-egg dynamics
Validation Process
Manual testing before building anything
Value Creation
Where platforms actually add value
Technology Timing
When to automate and when to stay manual
The results of this approach were eye-opening. After 30 days of manual testing, we had facilitated 3 legitimate business conversations and closed 1 small project. Not exactly unicorn-level traction, but here's what mattered: we learned exactly where the value was created.
The successful transaction happened because I personally vouched for the agency's quality and understood the enterprise's specific needs. The platform features they originally wanted - automated matching, ratings systems, integrated payments - would have added zero value to this process.
More importantly, we discovered that the real opportunity wasn't a general marketplace. It was a curated network for a very specific niche: agencies specializing in technical integrations for enterprise software companies. The market was smaller but much more targeted.
By month two, the client had shifted their entire business model. Instead of building a massive multivendor platform, they started a boutique consultancy that manually connects vetted agencies with their specific client needs. Revenue started flowing immediately, and they could scale the relationship side before investing in technology.
What I've learned and the mistakes I've made.
Sharing so you don't make them.
This experience reinforced several critical lessons about marketplace development:
Distribution beats features every time - Having access to one side of the market is worth more than having perfect platform features
Manual validation is non-negotiable - If you can't facilitate transactions by hand, technology won't save you
Start narrow, then expand - Successful marketplaces dominate small niches before going broad
Trust is the real product - Marketplaces succeed because they reduce risk, not because they have cool features
Technology amplifies, it doesn't create - Build automation only after you understand the value creation process
Your first MVP should be your sales process - Prove demand manually before building anything
The best marketplace founders are matchmakers first - Deep market knowledge beats technical skills
If I had to do this again, I'd spend even more time understanding the existing relationships and processes. The biggest mistake most marketplace builders make is assuming their market wants to change. In reality, successful platforms enhance existing behaviors rather than replacing them entirely.
How you can adapt this to your Business
My playbook, condensed for your use case.
For your SaaS / Startup
For SaaS startups considering marketplace features:
Start with manual curation before building automated matching
Focus on solving a specific workflow problem, not creating a general platform
Build trust systems and verification before complex features
Consider marketplace features as part of your core product, not a separate platform
For your Ecommerce store
For ecommerce businesses looking at multivendor setups:
Test with 5-10 carefully selected vendors before opening the floodgates
Focus on vendor support and success metrics, not just buyer experience
Ensure quality control processes are established before scaling
Start with vendors that complement rather than compete with your core products