When we first launched Melltoo in 2014, we saw ourselves as classifieds on mobile. Everything was moving to mobile, except classifieds. Online classifieds were still just electronic notice boards. We saw the opportunity to bring classifieds into the post-smartphone era and to take advantage of hardware capabilities like geolocalization, instant messaging, and push notifications. The rise of social networks also brought about a paradigm-shift, every product became social, so why not social classifieds?
To be clear, we didn’t pick classifieds from a long list of industries needing disruption after, classifieds has always been in the blood of the founders. Morrad Irsane, co-founder and CEO of Melltoo grew up around buying and selling second-hand. While raising a family of 13 children in France, Morrad’s mother regularly re-used clothes and hand-me-downs were standard. During their annual summer break in Algeria, she had a thriving side business reselling clothing she collected from France.When Morrad invested his savings to launch Melltoo in 2014, he was reviving an old family tradition. Morrad envisioned a mobile app he could take with him anywhere, with a built-in chat so he would never miss a deal.
As with all first-time founders, we thought that we would build it and they would come. Launch an app and everyone would use it. We were wrong.
While we grew in our first year, it was a struggle. We had to get creative. We experimented with many different user acquisition models, content marketing, social media, app store optimization, SEO, spamming, even offline events. Name it, we’ve probably done it. In fact, our downloads were healthy with over 500 new users daily with almost no marketing spend.
But, there was no WOW moment. Users came, they tried, they left. Meh. “The app is cool, but…”
While our first iteration was not a huge success, it gave us plenty of opportunity to talk to our users and this is what we discovered.
User Objection 1: “I would like to use your app, but I don’t have anything to sell.”
When someone says this, it isn’t because he doesn’t have something to sell, it’s because he doesn’t want to sell his stuff. Search a bit more and you’ll discover that what he’s really saying is: “I don’t need the money so I don’t want the hassle of selling my stuff.” Yes, selling via traditional classifieds is a hassle. In some cases, it’s downright torture. The main problem is meetups. List something for sale, get a bunch of phone calls from strangers at all times of the day and night, get lowball offers and then take time out to meet with multiple buyers before one finally buys (or not). If you don’t need to, why would you?
User Objection 2: “I don’t trust buying second hand, there are too many scammers.”
Web classifieds are no-man’s land. Anything goes. List something for sale and get an offer from the wife of the ex-president of some unknown country on a continent halfway around the world. People ask you to ship them stuff cash on delivery. You get spammed. Who do you trust, who can you trust?
User Objection 3: “Your app is cool, but nobody is talking to me to buy my stuff.”
Lesson 1: Peruse the startup literature and it is littered with the idea that founders must be “obsessed with the product.” There is no doubt that a great product is important, but a great product that nobody uses is still a flop. It is much more useful to be obsessed with the customer.
Lesson 2: 2-sided marketplaces are among the most difficult businesses to build. You need buyers and sellers, but buyers don’t go where there are no sellers and sellers won’t go where there are no buyers. What do you do?
Armed with this knowledge, we began to realize that classifieds didn’t simply need to be moved from web to mobile and the problem wasn’t one of technology and UI/UX. The problem was that classifieds was broken. People have stopped trusting classifieds and hate the hassle involved. They use it only when necessary, which meant when selling a used car or home and large items that needed to be disposed of, such as furniture. Anything less was simply not worth it. And just like that, we saw an opportunity to re-imagine classifieds, no-meetup classifieds.