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 %
Growth%
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 & selection2 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

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

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!

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

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