Elaborating a business model and a launch plan for PassPass – a web platform that helps providers of leisure activities to find more clients and users to plan individual activities in the region. By applying the current knowledge on how to launch, grow and monetize multi-sided web platforms.
The startup idea: Providing the go-to website for leisure activities in the region
The idea of PassPass was presented by Pierre at the Startup Weekend Nice-Sophia Antipolis 2016. The idea was born out of personal experience that there does not exist “the” website to find and plan individual leisure activities. It also taps into the trend that an increasing number of people of the creative class wants to pursue a variety of individual leisure activities in their spare time.
The teamwork: Developing a website MVP, the business model and launch plan for the leisure activities platform
Pierre was supported by Tristan, Fancis, Pierre, Gianni, Melanie and me. With three IT developers in the team, we were able to deliver a website backend with frontend mockup. From the business side, with backgrounds in business development and operations, we worked on the business model, particularly which providers and consumers to match as well as the scope of the platform, and the launch plan for the multi-sided platform.
We verified the problem and the solution with providers and consumers of leisure activities. Then we settled on hosting professionally offered leisure activities for active sport users, families and tourists. The web platform shall offer SaaS services to providers of leisure activities including search and matchmaking, provider profiles with recommendations, a booking system and analysis. Regarding launch, free signup for both providers and consumers as well as actively acquiring an initial provider base shall start the platform.
Nicole’s contribution: How to launch, grow and monetize a multi-sided platform
I offered advice and mentoring to the founder and team on all aspects of the business model and launch plan. Pierre’s idea was an occasion to reflect on and apply the the current knowledge on how to build a successful platform, particularly how to launch, grow and monetize it.
To launch a platform, you need to overcome the chicken-and-egg problem. Without a base of producers and value units offered, you won’t acquire consumers. And without a consumer base, your platform is not interesting for producers or advertisers. So, either you plan in a suitable marketing budget or you find growth hacking strategies to acquire an initial base of providers or consumers. There are several strategies to do that; Pierre has decided to use the micro-market strategy by hosting a variety of leisure activities but only in the Côte d’Azur/Provence region. The goal is that the platform users naturally interact with each other right from the start.
Concerning platform growth there seems to be a huge misconception: in lack of a marketing budget, many startups plan to “grow virally”. But viral growth does not happen out of nothing. The purpose of a platform is to facilitate interactions between users. The main question is what you can do to ensure the satisfaction of both sides by curating the quality on the platform and that users have a great experience. Pierre wants to aggregate the market of professionally offered leisure activities to ensure quality. Only when you manage to satisfy your existing provider and consumer base on your website will your platform grow organically (network effects). Based on that you can facilitate that your user base attracts new users to the platform (viral loop).
The success of your platform depends on monetizing it without friction on the adoption of the platform. Do you charge for access, for transactions, …? Whom do you charge – the producers, the consumers, or advertisers? For PassPass, Pierre has opted for a freemium model, offering free access for both providers and consumers of leisure activities, and charging the providers for premium features and transaction fees. The goal is to capture some of the value you are creating with the platform for yourself without hindering new user signup and activation, platform usage or transaction volume.
The result: A verified business model and a launch plan to start their leisure activities platform
Now Pierre has a developed website to serve as a low-fidelity minimum viable product, a business model and a launch plan for his startup idea to match providers and consumers of individual leisure activities. He can launch his platform within a region like Côte-d’Azur/Provence and then expand to France and beyond to tap into the huge markets of sports and tourism.