As the founder of an on-demand delivery marketplace startup, I was struggling to get off the ground, spin up the number of daily orders.
The business-to-consumer marketplace startup usually makes revenue only after successfully matching the demand side with the supply and completing the transaction.
For the marketplace to be functional as a founder you need to solve the chicken and egg problem and another big problem is solving the safety & trust problem.
My startup was 2 side marketplace, like Uber for movers. First, we started to onboard local truck owners, or how we called- “on-demand delivery helpers”.
After started tossing a lot of money on Facebook, google ads and very getting a month around 2–3 transactions and were completing only one.
My startup unit economics did not work out.
- CAC=$75-$120,
- Customers spent on average $150 and were earning on average $30.
- The average LTV was around $80.
Basically we were spending more than earning
I was collecting customer feedbacks and tried to learn what was wrong with my marketplace startup, why it is failing.
After 3 month talking and collecting feedback i finally understood why i was so close to fail and shutdown my startup.
I was asking 50 customers those questions and answers:
How did you hear about my on-demand delivery app?
60% told that saw stickers on cars and remember the name & message of the company. 30% told that was searching in google and click on our website. 10% told that saw ads on Facebook.How long did it take you to put an order?
60% told that it took them around 3 days to put an order because they needed to make some due diligence. 35% told that it took around 20 minutes to put a request after talking to support via the phone. 5% told that it took them 10 minutes to put request and because no credit card needed.What was stopping you from using my app?
90% told that were not sure that the app is not a scam. They had a huge issue with trust and safety. 10% told that UX was complex and did not feel comfortable to put a request and use it but risked.Did our service surprise you?
100% told that was super surprise with such delightful service.Will you use it again?
100% told that will use the app again, again and again.
Will you refer the app to your friends?
100% told that will definitely refer the app to friends and family members.
Time to analyze answers.
After i started to analyze those answer and started to ask my self what is wrong with facebook ads and how can i solve safety and trust issue.
I was very surprised than 60% of people used app after seeing stickers on cars.
I found that those 60% have in common: The faster order request, the fastes match time, the faster time to enter credit card and confirm booking.
After analyzing and having this picture I decided to ask that 60% of people why they decided to put the service request as soon as possible, and have trust in-app.
Answers were shocking !
They told me that they saw sticker on cars right on time when they were planning to move, they stasted to platform because since they saw cars with stickers they knew that company is legit and has operations in the city.
In addition 10 of customers told us that we need to advertise on billboards, because more people will see it, and will use app and believe that company is legit.
Everyone know that billboards are super expensive and if company can afford it then it means that business is legit.
Later on i decided to proof that responses about billboards are valid and reasonable by interviewing 1000 strangers.
I was asking them, will you be safe and comfortable to app to request the service from app if you will see ads on billboards?
Almost all people answered that will download the app, and be safe to use the service because the company is legit and worth trying because of advertising on billboards.
To questions “ Why you think so”, they were answering that billboards are expensive and if the company does it then it is legit and service should be super delightful.
In addition they told that everyone can afford ads on google or facebook, but not many companies can afford ads on billboards.
I was shocked by answers and after i knew that i need to put ads on billboards.
Later on, my company ads were on digital car-top billboards and everyone in the city saw my ads company times per day.
After 2 months of advertising on billboards, we saw a lift in the number of daily orders, referrals, and brand mentions.
In were continued to run ads on billboards and after 6 months were started to generate enough and be able to expand in 15 cities and completely forget about Google or Facebook ads.
By the time i understood that outdoor advertising is really underestimated because it does not give any data reporting or abilities to run retargeting ads.
And this gave me the motivation to build my next start called Murmur, a customer data platform that helps delivery apps to explore their audiences on street, connect & engage with audiences in real-time by showing dynamic ads content through digital smart displays which we put on top of doordash, uber, lyft cars.
