Image credit: rawpixel / 123RF Stock Photo

Hiring the right person for your business used to take weeks. It’s a process that involves effort and circumventing red tape. But online recruitment platforms like Upwork, which helps freelancers earn US$1 billion a year, are bringing it down to an average of three days or even a few hours. But online marketplaces deal with a new set of problems.

When everything is made fast and easy for the sake of convenience, the initial step of trust-building is often sacrificed, and that could leave a marketplace more vulnerable to bad actors. Worse, the bigger a marketplace grows, the more likely it is going to be a target for scams and fraudulent activities.

Bonnie Sherman, Upwork’s vice president of mobile, enterprise, and workplace products, gave Arcadier some practical advice on key factors that impact the marketplace experience, and on how to grow your marketplace sustainably.

Stock the pond

When oDesk (now Upwork) first started, the team reached out to their personal and professional networks to build an initial base of freelancers. The key to solving the chicken-and-egg problem is to identify which side the marketplace absolutely cannot function without. Bonnie has a humorous way of describing the balance between customers and suppliers: “It’s like siblings arguing over who mommy likes best.”

One side is usually easier to nurture than the other. It’s never completely balanced. Build up your inventory before spending on SEO and driving clients to your website. Reach out to blogs and forums to identify your potential users, and make the registration process simple for them.

Understand your buyers and sellers

Simple ecommerce marketplaces aim to drive transactions and have everything completed in a single session. But at Upwork, transactions involve multiple sessions. As such, Upwork’s efforts in figuring out what affects the user experience is much more extensive, as is the team’s considerations of the metrics to measure.

“A marketplace has two sides: buyers and sellers. When creating a framework for client retention and user satisfaction, the first thing you need to understand is what the buyers and sellers care about. What are they incentivized by, and what are they optimizing for?”