Silke Mayr Starting an online marketplace—a platform that connects buyers and sellers—offers numerous advantages for entrepreneurs, including low overhead costs, scalability, and global reach. However, realizing these benefits requires a solid understanding of how to operate and market your marketplace effectively to both customers and businesses.
To share best practices for marketplace success, we spoke with Michael Wolf, an experienced entrepreneur who has significantly impacted various brands. Wolf has been instrumental in building ClassPass, Supernatural, Lululemon, and FreshDirect, and he became the CEO of ResortPass two years ago. ResortPass allows users to access hotel and resort amenities for a day without needing an overnight stay. Hilton has praised the partnership, stating it provides a convenient way for people to enjoy travel’s top draw: relaxation.
Under Wolf’s leadership, ResortPass has seen a fivefold increase in growth. Here’s his expert advice for aspiring marketplace entrepreneurs.
How to Pitch Your Marketplace to Businesses
Wolf emphasizes the importance of inspiring businesses about the potential benefits your marketplace can offer. For instance, ResortPass highlights the growing trend of day guests as a new revenue stream. Many hotels aim to increase ancillary revenue but often overlook the opportunity to attract day guests.
When engaging with hotels, Wolf asks about their goals—usually, they seek new revenue sources. He explains how ResortPass can connect them with local customers who return frequently for daycations and refer out-of-town visitors. Entrepreneurs should identify their own “local” customers—those who would benefit from their product but currently lack easy access.
This principle can be applied across various industries. Entrepreneurs should ask themselves: “What additional revenue streams could be transformed into standard practices in my sector?”
Understanding the Marketplace Structure
There’s a common misunderstanding about “two-sided marketplaces”; in reality, there are three sides: the buyers, the sellers, and your company. Wolf describes this relationship as an equilateral triangle where all parties must perceive equal value. While the balance may shift during different phases of growth, maintaining this equilibrium is crucial for long-term success.
The Role of “Front-Channeling”
To create a transparent and efficient organization, Wolf advocates for “front-channeling.” Instead of waiting until the end of a process—such as a marketing campaign or hiring decision—to address concerns, he suggests engaging with colleagues and trusted external resources early on. This approach gathers valuable insights and data from the outset, leading to more informed decisions.
The Startup Leader’s Top Priority
For startup leaders, hiring is the most critical focus. Wolf recommends dedicating up to 80% of your time to attracting the right talent, particularly in a growing business. The right hires can set the tone for success.
During the hiring process, it’s essential to evaluate candidates’ instincts and to trust your own instincts as well. Genuine enthusiasm for your business is a powerful asset. Wolf shares his excitement about ResortPass at every opportunity, often receiving feedback from candidates about how contagious that enthusiasm can be.