Building trust and safety in p2p market places - Beriln Startup Camp 2013

www.kinderfee.de - www.facebook.com/kinderfee - @daan-kinderfee

Community building for marketplaces - How to build a safe marketplace – in fifteen minutes


Evolution - The nature of online market places has undergone a transformation

Online Classifieds

Auction / Reverse Auction Marketplaces

Community Marketplaces

Prevalent from 1990+ Prevalent from 2000+ Prevalent from 2010+

Much higher CLTV

Particularly good for marketplaces that require a large element of trust

Slightly higher CLTV

More trust & services than online classifieds

Low CLTV

Monetisation either through Ads or Subscription

Known counterparty

Handling of payment

Transactional knowledge

Additional services

Transaction made on platform

Enables user ratings

Searchable list of available offers

Low trust & low convenience

The future


BCG – product life cycle matrix

Online Classifieds

Auction / Reverse Auction Marketplaces

Market share %

Gro

wth

%

Community Marketplaces

Low investment requirements High margins / cash flows Slowing growth (imminent)

In early growth phase Rising stars & questions marks Showing huge growth


Everyone seems to be building market places these days


The problem we all face:

You both want the last can of beans? So who was here first?


The outcome we all want to avoid:

OMG. What did we do?

It was your idea to play with the kids


We sell trust


So do these guys:

Trust is a key enabler for P2P market places


1

3

Community & culture

Information & selection 2 Known counterparty

4 Accountability 5 Other stuff / trust hacks

Key learnings from 2 years of Kinderfee


1 Community

Rule 1: A market place is made up of its users

Rule 2: As a P2P market place, if you have shitty users it means that you are a shitty company

(yes, even if your design is awesome)


People enjoy being with likeminded people

At Kinderfee we call this process user self-replication

Time

1 Community


But how can I choose the right kind of customers?

1 Community


Start with your friends

1 Community


Continue to your friends‘ friends

1 Community


But typically that doesn‘t scale very well

1 Community


At scale - employ signalling & self selection

1 Signalling


Some other place

1 Signalling


1 Signalling


1 Signalling


1 Signalling


1 Signalling


Our competitor‘s adwords add

Our adwords add

1 Signalling



Our adwords add

Winner for CTR & conversion

1 Signalling



Our adwords add Winner for minimum quality of applicants

1 Signalling


1 Community


1 Community


Known counterparty improves all you trust metrics

vs.

2 Known counterparty


My favorite methods for establishing known counterparty

2 Known counterparty


Information creates transparency

Transparency gives you the ability to react to behavior in your marketplace

3 Information & selection



Manual curation is an excellent way to improve the quality of users on your site –

especially while the site is small


vs.

Traditional online marketplaces introduced user ratings to solve this problem

User ratings are a powerful tool, but they have several issues: On avg. only about 10-15% of purchasers post a rating The people that end up giving a rating tend to be the people that have extreme feelings. They either had a great or an awful experience, but rarely inbetween. In marketplaces where two way ratings are possible, people are skewed to give good ratings If accounts are anonymous it is really easy to create several accounts and hence influence your own ratings



The solution for this one is that you handle the payment between the parties

Watch what people do and not what they say

It means you know exactly who is buying from whom It means that instead of relying on user ratings we use the customer’s actual behavior to judge his happiness It means you catch 85% of extra signal



1

2

3

We use 27 feedback signals from parents to rank our caregivers



So you now we have all this highly relevant information that we collect about our caregivers performance

And we decided to make all performance metrics that we collect available to our caregivers

4 Accountability


Tactics to overcome trust weak spots


- Is the babysitter safe?

- Will the guest trash my place?

- Will the cleaner steal my stuff?

- Am I being ripped off?

5 Other stuff – trust hacks


- Is the babysitter safe?


Meet Manami for a personal interview

Make it personal and keep barriers low


- Will the host trash my place?


Throw money at the problem / insurance


- Am I being ripped off?


Education & fixed price guarantee





- Will the cleaner steal my stuff?


Thank you!

Technology

Building trust and safety in p2p market places - Beriln Startup Camp 2013