The keys to a successful marketplace: a real-world case with Studiotime

Modern marketplaces

E-commerce is more than our future — it has been our present for quite some time now. The sector continues to grow and niche markets emerge every day. Standing out in a digital world that is simultaneously so vast and so full of promise is no easy task.

To better understand the possibilities this sector offers, we have translated an interview with Mike Williams. The founder of Studiotime achieved success at an extraordinary pace with his idea — and he encourages marketplace owners to share a simple message with their customers.

Mike Williams had been thinking about the concept of Studiotime for a long time. "There must be a better way to book a recording studio session." One day, he decided to skip dinner and build a minimum viable platform instead.

After a little research, Williams came across Sharetribe. To his great surprise, creating his "Airbnb for recording studios" took only a matter of hours. He describes the process in a blog post about the launch of Studiotime:

"To my great surprise, I finished the site in a few hours. I even had the call-to-action integrated that I was going to use to convince artists and studios to sign up. I tested everything and marked the project as done at around 1am."

That same week, he bought the domain name studiotime.io and submitted his site to Product Hunt. Within a few hours, more than 1,000 users signed up to his site. What had started as a passion became a genuine business.

Using social media to grow step by step

Much like Storefront, Studiotime decided to expand its business city by city. Since each city has a defined number of recording studios, the conversion rate relative to those studios is simple to calculate. Once the majority of studios in a city have joined Studiotime, they consider themselves to have achieved a more than satisfactory conversion rate, as more artists will then be able to find a studio for their needs.

"If people keep asking us 'why isn't such-and-such studio listed on your site?', we know we haven't reached our goal yet. On the other hand, we don't need to have absolutely every studio in Los Angeles. That would be an excessive supply."

Studiotime has recently conquered Los Angeles and New York. Williams hopes to take on more cities in the months ahead. Ensuring that each studio receives enough bookings through the site is more complicated — but Williams says they will get there.

"Artists come in steadily, and the biggest studios are already making five-figure sums every month from bookings made through our site."

Attracting demand is harder than securing supply. That is why Studiotime had to get creative.

"We use social media a lot. Instagram works really well for us — we get 10–15 direct messages from artists every day."

Studiotime has also successfully attracted media attention, gaining coverage in the most important trade publications. Williams explains that every marketplace owner should know the key players in their sector well.

"Get to know your potential users, possible partners, industry media, competitors, influencers, and more. That's how information spreads. Then, when you do something new, tag the influencers and they'll pass the word around."

Like many other marketplaces, Studiotime also turned to Craigslist to reach its target audience.

"We post ads there to sell instruments. Because we know the target audience is musicians who, more often than not, are also looking for a place to record their album. It's a good way to connect with them."

Doing one thing well

Many e-commerce businesses and startups try to expand their reach via social media. But few succeed. Studiotime did. Williams believes this comes down to their clear message.

"We have a really specific group of users who want something really specific. That means we can meet their needs, and they love that. We can also do things that only interest this particular audience, like taking them inside recording studios via Instagram. That's not something you can find on YouTube."

In the early days of Studiotime, Williams had plenty of ideas about the directions the team could take. They could build a community for artists, brand pages, and much more. After some trial and error, he realised it was better to focus on one thing — one single mission — and do it really well: helping artists book recording studio sessions.

"I think spreading yourself too thin is a very common mistake for e-commerce businesses in the early days of a marketplace. You have all these ideas and see all this potential in so many different directions. There's always someone saying 'Hey, you rent bikes — why not rent skateboards too?' But the fact is you can't do everything. Instead, pick one thing and focus on it to get really good at it. You can always expand later."

"I think focusing on a very precise offering is the key to success for modern e-commerce businesses."

Adding a personal touch

Williams noticed that offering users a more personal touch helps greatly, especially in the early days of a marketplace.

"I think Instagram works really well because it lets you talk to people directly and get to know them a little. You build a connection with your users."

As a marketplace grows, offering everyone a personal touch becomes difficult. Studiotime recently tried to maintain a personal approach through Facebook's new automated messaging platform, launching "Studiotime concierge" in September 2016.

"It only took a few hours to create. And I think it provides a personal and genuinely enjoyable user experience. You can simply ask the bot your questions and it responds. At the moment you can use the bot to find studios that suit you. But in the future, hopefully you'll be able to book directly through it too."

From self-funding to profitability

Investors look for businesses and sectors that are already generating substantial revenue. Williams and his team decided to self-fund the project rather than turn to investors quickly.

Thanks to Sharetribe, they did not need in-house developers, which allowed them to keep costs down. They were also able to get started quickly, and therefore put their project to the test straight away. This proved essential, given that they soon discovered the business model they had envisioned did not really work.

"Initially, we thought our revenue would come from commissions taken on bookings. However, we quickly discovered that getting studios to adapt their billing systems to our booking platform would be tricky."

They then switched to a simple subscription model: studios pay monthly for access to the platform. This strategy was a success. Today, Studiotime is profitable, with five-figure monthly revenues. They are in a sound financial position but have no plans to accumulate more money in future. Instead, they want to focus on their core business.

"We're going to expand into new cities, offer more tools for studios, and help them grow. It really is as simple as that."

In short, Studiotime's success lies in an original offering responding to a specific demand, combined with a clear message, a personal online presence, and gradual geographical growth.
All of these are interesting points to bear in mind when launching an e-commerce venture or looking to optimise an existing marketplace.

(Translated from Marketplace Academy)