Every marketplace has the same chicken-and-egg problem in the early days: no buyers without sellers, and no sellers without buyers.
It’s what’s known as the “cold start problem” — and if you don’t plan for it, your marketplace can stall before it starts.
Here’s how to get out of the trap — and build momentum, even when you’re just getting started.
1. Pick a narrow starting point
One of the biggest mistakes? Launching too broadly.
Instead:
- Focus on a single niche or geography
- Limit categories to one vertical
- Choose one side of the marketplace to prioritise
You don’t need thousands of users. You need a handful of engaged users, doing real transactions. Start there.
2. Seed supply (or demand) manually
At the start, you may need to do things that don’t scale. And that’s okay.
You can:
- Reach out personally to early vendors
- Offer to help set up their listings
- Pre-fill your marketplace with curated supply
- Act as a concierge to match buyers and sellers
Fake the network effect before you make it.
3. Use subsidies or incentives — strategically
Money moves people. But use it wisely:
- Offer early discounts or reduced fees
- Incentivise early transactions (e.g. first 3 bookings free)
- Reward referrals or early reviews
Make sure the incentives are temporary and tied to real activity — not just signups.
4. Create social proof fast
No one wants to be the first to use a new platform. So show them they’re not.
You can:
- Highlight your first successful transactions
- Use testimonials from beta users
- Share screenshots of real listings
- Post behind-the-scenes content of vendors onboarding
Even a little activity makes a big difference in early perception.
5. Be hands-on until it clicks
Founders of early marketplaces often are the first customer service reps, growth marketers, and account managers.
Don’t resist that. Embrace it:
- Jump into conversations
- Help users one-on-one
- Collect every piece of feedback
Once the flywheel starts turning, you can scale yourself out. But not before.
Final thoughts
The cold start problem isn’t a sign that something’s wrong — it’s a stage to be designed for and worked through.
At Markko, we’ve helped marketplace founders launch from zero by focusing on the right levers at the right time.
Need help getting out of the cold start trap? Get in touch. We’re happy to help.