Chicken and egg issue for marketplaces

Published on February 28, 2025 by Rasmus.

The chicken and egg issue is (usually) one of the biggest problems when launching an online marketplace. Because without sellers, there are no buyers. And without buyers, there are no sellers. But how do you solve it? 🤔 (Read on!)

Whether you're launching a new marketplace or trying to grow an existing one, these insights will help with breaking out of the "chicken and the egg" loop.

Watch the video below for a detailed guide.

What's this chicken and egg issue thing all about?

Here's the deal: You can't have 🐔's without 🥚's (and the other way around too!)

Picture this: You're trying to launch a marketplace, but you're stuck in this weird loop where you need both buyers and sellers to make things work. Pretty frustrating, right?

Think about it - if your marketplace is a ghost town with no products or services listed, buyers are going to take one look and bounce. And sellers? Well, they're not going to waste their time listing stuff if there's nobody around to buy it.

It's like trying to throw an awesome party where nobody wants to be the first one to show up(also called a catch-22 situationYou're stuck because you need A to get B, but you also need B to get A. Talk about a headache!) - super awkward, right?

But don't worry! Getting out of this mess isn't impossible - you just need to get creative and usually focus on getting one side of the marketplace rolling first (spoiler alert: it's usually the sellers you want to start with 😉).

15 proven strategies to overcome the chicken and egg issue

Now that we understand the challenge, let's dive into some battle-tested solutions. I've collected 15 strategies that successful marketplaces have used to break out of this frustrating cycle. Some are straightforward, others are a bit sneaky - but they all work when applied correctly.

• Focus on one side first: Uber got drivers first and Airbnb got hosts first. Decide which side to focus on first (in 99% of cases, it's the supply side). Think about it - it's way easier to convince sellers to list their stuff when you can tell them "Hey, we're building up inventory before our big launch to buyers!" than trying to get buyers excited about an empty marketplace.
• Go niche and dominate a small market: Start small by targeting a niche market, then expand as you establish engagement. For example, Facebook started just at Harvard before taking over the world. Pick a tiny slice of the pie you can totally own - maybe "vintage sneakers in Brooklyn" instead of "all shoes everywhere."
• Fake it till you make it: Seed initial listings or create dummy data to make your marketplace appear active from the start. Just don't go overboard - we're talking about creating the start.
• Steal (be careful!): Ethically(!) "borrow" users from other platforms - find out where your potential users already exist and "invite"🙃 them over.
• Lie (be very careful about this!!): Claim future funding or support to entice early users, but be VERY cautious to maintain trust.
• Find the whale(s) - Treat them as kings 👑: Identify key influencers or power users and give them VIP treatment to boost your platform's credibility.
• Pay them to join: Offer monetary incentives or subsidies to attract early adopters and jumpstart your marketplace.
• Build a supplementary product: Create a valuable tool or product that naturally draws your target audience to your platform.
• The "WOOOW!" strategy (my favorite): Offer something radically unique or exciting that surprises users and gets them to join and spread the word.
• Create FOMO: Use invite-only access or exclusive offers to generate a fear of missing out among potential users.
• Launch on communities: Tap into existing communities where your target audience already gathers to give your marketplace an early boost. (Reddit, X, Hacker News, etc.)
• Leverage influencers: Partner with influencers who can promote your platform and help reach a larger audience.
• Offline meetups: Organize events or meetups to build a strong, engaged community offline that carries over online.
• Time your launch perfectly: Align your launch with market trends, seasonal events, or relevant conferences to maximize initial traction.
• A Market where the chicken is also the egg (🐔 === 🥚): Choose a market where users can be both buyers and sellers, fostering a self-sustaining ecosystem.

Want to see all these strategies explained in detail? Check out the video above.

Let's wrap this up

Look, - this chicken and egg issue thing is a real head-scratcher! But hopefully, with these strategies in your back pocket, you've got this!

Just remember to take it one step at a time - try to get some early wins, and keep iterating based on what works. Stay patient and persistent - success takes time - Rome wasn't built in a day, and neither are awesome marketplaces! Most marketplaces take 2-3 years to get off the ground. 🐢

Building a marketplace isn't exactly a walk in the park, but when it clicks? It's totally worth all the hustle!