Interview with Ned Dwyer about Building an Online Marketplace
Ned Dwyer is the CEO and Founder of Tweaky.com – a start-up that facilitates “small modifications” on people’s websites. The “tweaks” are purchased online where clients initially create a brief description of the modification required, followed by Tweaky’s team dissecting the situation and eventually offering a solution. Ned formally headed up NativeDigital which now primarily focuses on Facebook applications. The inspiration for Tweaky came through Ned’s agency experience where he saw how hard it was for small players to get their websites done the way they wanted. He is also a mentor for StartupSmart and runs his own blog mynameisned.com. When he’s not working on his projects, he enjoys activities such as running and hiking.
Here are my 5 questions with Ned and his answers:
1) Your company has seen amazing growth in a short period of time and you were able to reach profitability in less than two years. Along this journey did you identify anything that you believe is repeatable regarding your business blueprint that you would recommend to fledgling entrepreneurs?
Definitely, one, recognize a genuine problem. In our case the problem was/is that small to mid-size businesses need help with their online presence, and most of the time Agencies are simply not a viable solution for them, especially if all they need is a little assistance. We identified this problem and came up with the concept of a “tweak”.
Two, packaging works. We have bundled some of our best services based on our ability to deliver on the identified needs of our customers and it’s helped with some of our growth.
Lastly, never underestimate the value of your email list. I know this one is a bit cliché now but sometimes it is the simple stuff that you forget about. We had a solid list of about 1500 customers but we weren’t doing much with it at the beginning of Tweaky. We would send offers and see revenue spikes but there was not an initial methodology. When we began to test and measure campaigns through this channel it became a significant engine for our growth. Early entrepreneurs can benefit from working on a qualified list early, and then see to what extent they can work their list without fatiguing their core base.
2) I really enjoyed your post How to Build an Influencer Outreach Campaign that Converts, it complements the often sited post 1000 True Fans. Did you employ this strategy to foster Tweaky’s early growth?
I’ve used this strategy more as a music marketer than I have building Tweaky. To be honest, currently we aren’t using these concepts enough. This strategy is labor intensive but it works, especially if you are authentic. Using this type of strategy I was able to secure an early win with James Farmer from WPMU. He introduced Tweaky to his entire list asking only that we provide them (WPMU’s customers) with an exclusive offer. He wasn’t looking for any sort of compensation; he just wanted to make sure that the end result was a win/win. He benefited by providing value to his list, and we benefited from reaching an untapped market. The key to this strategy is you cannot take shortcuts. It truly requires authenticity to work. If you try to automate processes you’ll burn bridges and likely have to ultimately abandon the strategy for something else. However, if you work on building genuine connections, think about the other party first before thinking about yourself, and focus on reciprocity, it is an extremely effective strategy.
3) You have successfully created an online market. Along with Tweaky there are other major players in the online market space that have had some success creating marketplaces as well, a popular example is airbnb. In your opinion, what is the biggest challenge to ensuring an online market place becomes profitable?
I call it “the grind”. There is no secret formula, or if there is it is this: keep your head down for 6 months and create a great product… that’s the challenge. This requires a particular mindset, one of focus and vision. If you believe you have a great product or service and you are able to turn out great content you’re half way there. You just have to keep pushing. I share the opinion with many others that in the SaaS business there are never “big” wins. A great post on this subject I recommend is How to Negotiate the Long, Slow, SaaS Ramp of Death by Gail Goodman.
You must have confidence and have the tenacity to go a significant amount of time with little revenue. Architect your “10X” goal and then get to work. I’m not suggesting you do not build in “kill switches”, i.e. indicators that you’ve miscalculated and you should pivot. You should never run yourself, others, and/or your business into the ground. However, you also have to have the guts to know that even though things look bleak, and are uncomfortable, you will persevere to reach your goal, 10X or otherwise.
4) From my vantage point it appears that you’re consistently testing things on Tweaky such as layout, pricing, and content. What are your favorite tools and methodology for refining your approach for the betterment of your business, as well as site usability?
Ha. I’m glad it looks that way. I would say it is a combination of mixing data with fineness. When we initially tested our pricing, in a sense we were using data because we were gauging how people reacted to the price changes, but the pricing numbers were our call based on institutional knowledge and instinct. Regarding the way we formulate our products… it is a bit more fineness. Something like, “I believe my customers will want this so let’s build against this presumed desire.” However, we will still make product choices by asking questions such as, “where is the data on that?” We have definitely done a lot of testing regarding our email list. As I alluded in your previous question, the adage “the money is in the list” is true for a reason. We have done a lot of segmentation and experimentation with our list through special offers to particular segments, as well as testing offer elements before a mass mailing. For instance, we wanted to get advocate exposure by asking our clients to provide a link to our website in their website’s footer. We tested four different offers to see which one would garner the most desired response. When we identified the offer that received the most positive response we went wide with that particular offer and got favorable results.
5) As a successful digital entrepreneur what are some of your favorite tools and/or products that might not be widely known yet?
For CRM I’m currently a big fan of Intercom. It’s a robust integrated solution that does a good job of tracking user activity. It allows me to do some really cool segmentation based on a wide variety of attributes. Using the features of Intercom I can quickly identify customers and prospects through specific behaviors and traits.
Another service I’m currently fond of is Full Contact. I use it to get social attributes on incoming leads. This affords me the ability to quickly know the social influence of anyone interested in Tweaky. Knowing this information means I can segment prospects that might be influencers and potentially target them with specific offers.