How to solve the cold start problem for two-sided marketplace?

You need to cheat to kickstart one side

1) Incentivize people on one side to join without the other side. For example Uber paid early drivers money just for signing up even though they had no riders.

2) You provide one side of the marketplace to kickstart the other side. This would be like Uber hiring drivers in the beginning.

This is why starting a two sided marketplace often requires significant capital. They're very hard to start organically.

Another thing I'd suggest is to focus on a niche. Don't try to solve the global problem just yet. Maybe you know a lot of people want to transport books between London and Madrid. Just focus on that to get that market healthy, then add another product or location. This helps you focus your marketing. Also if you go global to start you might have 1000 users on both sides but no matches because everyone is too spread out.

Most common advice is that you have to be at least one of the sides somehow. Reddit famously did this with lots of sock puppet accounts to foster discussions and create pseudo activity.

In your case, I'd probably start by reaching out to businesses in mid-size metro markets, ones where bike couriers don't already exist, and offer to save them on shipping small packages. Build up a list of clientele and encourage them to contact you for jobs when they need to ship small ad-hoc stuff. That should give you an idea of demand. Then start posting on craigslist and facebook looking for delivery drivers, then start match-making. From there encourage the drivers you find to sign up on your platform for future work.

How is this different from Uship? I've used that service and it's pretty good and reasonably priced. They do exactly what you talk about which is allow people to ship things between cities for a pretty reasonable price. You can either specify a price or have shipper bid on it, along with flexibility as to when it gets shipped. People end up being small-time shippers and will buy vans and then just deliver in between cities for as many parcels as they can ship.

My bigger question is how you would validate this isn't drugs because this seems like the perfect low effort way to send high value drugs.

A recent episode of [David Senra's podcast with Tony Xu](https://www.davidsenra.com/episode/tony-xu), founder of DoorDash has some interesting points on this topic. Essentially there, they restricted the service to one locality, and he and his co-founders were the first drivers. Once demand was proven and slowly scaled, there was an incentive for other drivers to join, and with more drivers it opened up a wider geography.

You need to be one side of the marketplace first. Uber started by the founders being the drivers.

That means either being the traveler and carrying things for others. Or be the demand and start shipping things this way and get some other people to carry packages for you.

Volunteered, perhaps uselessly, without experience making a P2P market (so skip if you only want experience from actual doers):

Same as always, you need market-making: you do it or get someone else to do it. i.e. place resting orders that others will do. e.g. in your case, maybe there is a demand for one specific kind of item: let me say GPUs. Then you be customer number one of your thing, you buy GPUs in one place and have people move them to the other place in their checked bags or whatever. Alternatively, you make the other side of the market that is highly heterogeneous (say, Indian sweets) and you or your family fly between the two locations yourself. It might teach you about the time preference of your clientele etc.

Anyway, it would seem that ultimately all markets need market-makers to bootstrap.

Simply put, start with a niche market concept that helps solve very specific problems that people may have (such as delivering pet medicine to old or handicap people who live in villages or the countryside), and then to actually get started make an offer to those providing the solutions (the drivers) that is too good for them to refuse.

In this case I think you'd basically have to pay the drivers to make deliveries for yourself, and then work to show the value of this service to those whom need this service and are in a position to take over paying for it.

As someone who has worked on multiple marketplace startups, I highly highly recommend this resource: https://www.nfx.com/post/network-effects-bible

Failed to build one but my advice would be to focus very narrow. In your case start with literally between two cities. Also, fake supply by either paying people to do the trip (in addition to the normal payment on the platform) or literally do it yourself once per week. Focus on supply. It will be way harder to get.

Marketplaces are famously difficult to start - even Uber just started with black car service in a handful of cities and expanded from that. Find a trusted network of mules as your supply-side and expect to lose some money as you bootstrap.

You should already know what your largest city-to-city routes might be at this point, so why not focus on economy of scale there? If you need to rent a cube van to make it happen, do that.

Don't waste your time. I've been down this road and unless you've got business connections or a LOT of marketing money, it is not worth attempting.

yeah. I have the same pain. But for your case, don’t start as a marketplace. Start as a concierge service on one route, one parcel category, and one trust model. If you can’t force the first 20 successful matches manually, the market is still too under-specified. my 2cents

In this day and age, I would never carry something for someone this way. It's such a bad idea. You could land in prison. Even if you're taking books, the spines might contain fentanyl. And I have no idea how you get past that.

That being said, there is a long-established business for this kind of thing for companies, not individuals, that goes back decades. Here are two examples:

1. 30+ years ago companies would give discounted tickets to people with the condition that they couldn't take any luggage. Why? Because the company would use their luggage allowance to send stuff. I believe it was mostly documents. Discounting an airfare by $500-1000 to send 50-80lb of documents was actually a good deal. I don't know how the logistics worked of baggage drop off and pick up but I believe it was relatively understood that the passenger wasn't responsible for the luggage. I assume the shippers had some kind of commercial relationship with the airline and handled all the customs declarations, import duties, etc;

2. There are times when businesses need to get certain parts or materials in a very time-sensitive manner. For example, I knew someone who worked in oil and gas. An oil platform had shut down production and needed a replacement drill part or something, I forget, and it was over Christmas. They could've ordered it. It would get sent and then sit in a customs warehouse until it gets cleared. That could take days or even a week or more. Not having it was costing half a million dollars a day. So what did they do? They flew someone across the Atlantic to the US to get the parts, pay exorbitant extra baggage fees (it was large) and come back with it. Why? Because passenger baggage would immediately pass through customs at the airport. This would likely save 5-10 days.

So there are some obvious questions to be asked here like:

- How do you make this safe and legal?

- Why isn't this just being Fedexed? Fedex is your cap on fees too;

- How does someone pick this up and drop it off?

- What if they get charged customs fees? How is that recouped?

- Who fills out customs forms?

- What about transiting countries? You may run into issues where something is legal in the source and destination countries but you transit somewhere where it isn't.

I don't know how you bootstrap this because you're going to be dealing with people who have way more experience than you at shiping thing sinternationally. More importantly, they'll have much more volume. That means they can send things via courier at rates you can't dream of getting. So how do you compete with that?

Even in the example mentioned above, the company used an employee to go pick it up. It was an expensive part so an employee could be trusted more than some random could.

read andrew chen's book Cold Start Problem.. tackles this on all possible angles.

A few thoughts from instant gut reaction:

- you're on HN, so you have an opportunity to tell us the name of the thing - marketing

- perhaps consider your marketing budget to be the area you need to invest in now, and indirectly how that budget can actually generate a little revenue and exercise the engine - e.g. do you have packages you can ship through your service to announce it to others? Use your marketing budget to do it and collect your marketplace fees - marketing again. Nothing says I believe in my product like using it for real (IMHO).

- a bold and risky move (?) - most would say fake it till you make it - but I for one tire of this tactic. How about approaching this with honesty and reward the first adopters? "We're brand new but you can be the first to help us prove out this model?".

- your marketplace is a network. Search for an opening that has viral properties. Try to tap into something that has a network effect, go to where your customer is and see how you can target/advertise strategically and respectfully - become a trusted partner to one or more communities (e.g. thinking out loud, eBay sellers maybe?). This could include finding the right partner(s) who have a problem and are willing to give you a shot in an existing network.

On the last point - as an example of the viral thing - I worked on a real estate tool a while back. We found a viral hook - there were for sure properties that needed to be processed and worked through the tool - we email invited the parties involved in the transaction to invite them to work on the property in the secure tool, and we gave them the ability to invite others working the same transaction to the tool, and we focused everything on polishing that workflow and experience.

This way, as soon as one person used the tool they could invite others to use it legitimately to work in the tool and that was the viral aspect.

This points to, replace real estate tool and house with "package" and invite... and can you achieve something viral that spreads itself... like, when someone ships with your tool, it emails the recipient with the link to your site for status tracking and a call to action to make them want to ship using your platform.

This to me is a lot of marketing and product strategy around incentivizing the network effect.

Disclaimer: I never made millions of dollars off a marketplace. But I did help stand up the real estate mechanism I mentioned and that business reliably brought in 5-10 grand a month with no marketing effort and just that one mechanism, and it also helped us find a few key network partners. That's what drives my feedback.

you should read the cold start problem (book). it talks a bunch about how uber, airbnb, zoom, github, dropbox solved the cold start problem in different ways. super interesting and well explained.

in two words, two sided networks usually have a "hard part". in the case of uber, the drivers. in your case, i'd probably "do things that don't scale" like brian chesky did with airbnb, start with a super small location (probably where you live) and drive yourself / your cofounders / friends all the packages until people know the product works.

usually, with cold start products, you have to solve it many times in many locations. you can't do it worldwide day one.

Beware of drug and cash traffickers. Unlike ride sharing, where the end user, the passenger, is responsible for everything.

Man, I feel this. I'm literally grinding to get the first 30 active members for my own project right now and the chicken-and-egg phase is brutal.

Honestly, just be the courier. Pick one route, find the senders manually, and drive the packages yourself.

Do it yourself, beg your friends, subsidize. You'll learn a lot by being the supply side yourself since you'll be talking to customers every single transaction. You'll also learn a lot about the actual unit economics, which I think are really hard for this problem in practice.

For advice let me use my current product. https://fontofweb.com is essentially Pinterest for web design. It does semantic search against a database of UI screenshots and recordings.

The problem with products like this is that for search to be useful, you need, well... data. And when your data is crowdsourced, you need, well... a crowd. That was the chicken-and-egg situation I found myself in.

So the way I solved it was by painstakingly clipping and recording ~8500 websites myself.

But the great thing about that arduous process is that it forces you to put yourself in the shoes of your typical user. And really, the only way to make good products is to have a deep level of empathy for that user. In my case, that meant streamlining the data creation process itself, the act of pinning a screenshot or recording, because I had to do it over and over again. Making it easier for myself ended up making it better for everyone else too.

Of course, all that data-seeding effort goes to waste if search engines and potential users cannot discover it. So you have to go all in on SEO, especially sitemaps, and on programmatic socials where possible. This is especially true for a product like mine.

A lot of these marketplaces also have relatively homogenous data, which is actually useful, because it means you can present it through templates and publish pages at scale automatically.

My buyers and sellers were heterogenous, so I could not acquire one user and get both personas; I purchased supply which had publicly-measurable demand and resold it below cost (in line with my target CAC) to bring the demand on platform. Once I had aggregated enough demand and developed the demand-side marketing and trust, I brought in the suppliers directly.

Every platform has this problem. Ycombinator even asked explicit to come up for ideas for this problem.

This being said, your idea is not new https://www.traveltechnation.com/companies/piggybee

I always thought of this idea in the city, there are lots of driving schools and perhaps taxi drivers that can drop packages off if the packages are not in a rush. That might be a start.

Well it's easy you fabricate complete horseshit business case, fudge all the numbers, create a nifty slide deck and raise enough VC money to pay your early users in order to bootstrap your business.

Fake it until you make it baby!

Start with a small local market (one town). FB started from Harvard only.

Free drinks for the ladies on Tuesdays.

Take a page out of the YC playbook.

Ditch this idea and instead build a Sales Enablement B2B Saas targeted at other YC B2B Saas companies, fuel the pyramid scheme with contracts from other VC funded B2B Saas companies and exit before the hype around you dies down.

Bootstrapping a two sided marketplace in 2026 is virtually impossible, especially one as esoteric and low value as what you’ve described.

I'm the cofounder of Infura.io and we were building a 2-sided marketplace of API providers for blockchain infra. We bootstrapped it by doing exactly what you said: focus on one-side first. We focused on the provider side but we had that luxury. We had demand on the customer side already with our existing SaaS product. What we wanted to do was evolve our product to serve our existing customer base with a marketplace instead of solely by our product team. This is because of the evolution in the blockchain space of people interacting with dozens of APIs instead of 8 years ago when it was just our main Ethereum API. Serving the existing customers with a marketplace of providers made a ton of sense and so that is the direction we took the product. Over 2 years we grew it to a network of over 40 providers serving several dozen blockchain APIs.

For your idea I’d start narrower. One route or type of sender/package. Pick a high volume popular route and see if you can bootstrap the 2 sides just on that route alone and then expand. Then manually match people for the first 50-100 transactions. It takes some manual work to get that flywheel going

Partner as overflow, or undesirable route coverage, for a specific niche market of couriers in your existing location.

Practical examples from a US perspective, where the existing customer has a strong anchor for timely delivery:

1. McMaster-Carr couriers tons of stuff to industrial and commercial facilities. Partner with one of their exist carriers.

2. Local automotive repair shops need parts delivered.

3. Durable medical equipment delivery.

4. Overflow capacity on your local contract FedEx routes.

5. Emergency runs for event or wedding planners.

6. Fresh produce, greens, and fish for restaurants.

7. Airport to hotel lost luggage courier.

There is probably no other way than to seed it. You can do this with outright bots or contractors from fiverr, but people who grew up with the internet are very good at spotting inorganic growth.

I'd start with a slow rollout to friends, family, colleagues and even LinkedIn acquittances. You'd be surprised how many people are super eager to be the first to test your apps, even with a generic cold message like "hey, remember me? I built this cool app, wanna try it out if you have a minutes? I'll send you money to cover the fees."

As a personal nit, I really dislike the term "two sided marketplace"

It should just be "marketplace". The term implies the existence of a "one sided marketplace". But isn't that just a business? If I have a bunch of product on my shelves and I'm trying to sell it, I don't call that a one sided marketplace?

The doordash story is very relevant here - they started with a menu and a Google voice number and did the orders and deliveries themselves.

The side that is most patient (e.g. the one likely to make money) is the one to start with. Once you build up enough on that side you can start being useful to the other side. The key is going to be whether or not this business model makes sense on unit economics too.

A key term is ‘single player value’. One type of user needs to get benefits out of this marketplace as a tool so that you can use that engagement to solve the chicken and egg problem.

"Focus on one side first" means get in your car and start fulfilling orders.

> basically BlaBlaCar but for packages instead of passengers

Roadie. https://www.roadie.com/

I’ll add another piece of feedback.

It’s easier to narrow the domain of your market as specific as possible so as to maximize transactions and matching early on.

For instance, Uber launched in one city. This is so that all the growth efforts on both sides go to helping the markets meet. Twitch had to win with gamers before it could win in other categories. Pick a narrow domain for your business, perfect that user experience, then, as other have stated, prop up one side of the market yourself (probably the one least likely to churn forever) until the market can support itself organically.