Start-up Lessons Part 1: What Launching ArtFire.com has Taught us
Posted by ArtfireMarketing on 03/29/2010 at 12:33:47
Running a marketplace has many parallels to running an artisan business. Many of the challenges, pitfalls, and life lessons are the same. Since a large part of our mission is helping each of our artisans to maximize their business, it seems only fitting that we share some of the lessons we have learned (sometimes expensive lessons) in launching and building ArtFire.com.
Since I intend for this to be an ongoing series, I’ll keep it to just a few lessons for each post. These are in no particular order as they will be of differing values to you depending on where you are at in your business.
Lesson # 1 – No amount of money can rush organic growth.
You can seed organic growth, you can fertilize it, and you can even nurture it. But the truly sustainable organic business growth takes consistent effort over a sustained period of time. Our team is not full of patient people. We have assembled over-achievers, workaholics and driven type-A personalities. All of them want to win and they want to win right now. At times, it seems like everything is moving too slowly. “What do you mean ArtFire isn’t already dominating the entire internet?”
When I start thinking this way, I pull out last year’s numbers. I look at sales and traffic, items listed and Google shoppers visiting. When the rest of the business world is struggling for 5-6% growth the sales for artisans here are up 500-700%. That is fantastic growth. Yet, it never seems fast enough.
I once read from another entrepreneur about the last 3 start-ups he created (all of which became huge successful companies),
“It’s going to take 3-5 years to start seeing any real traction. If you’re starting in your garage, 3-5 years. If you’re backed by Microsoft, 3-5 years. If you invent the cure for cancer it will still take 3-5 years.”
The reason is that things have to build organically. You have to make those connections between people over time. Every day you have to work at it and work at it hard. But, that will still take 3-5 years of hard work. Then, and only then, with smart strategy and a little luck can you bring that little spark into a full-fledged fire.
Lesson # 2- Someone else has hit this hurdle (whatever it is) before you. Learn from their mistakes (or successes).
Despite how often we end up coding our own solutions for ArtFire.com, we research and benchmark best practices on literally hundreds of sites online. We look at everything from video game sites and online communities to major e-tailers and news aggregators. There are a lot of crossover ideas that can improve the shopper and artisan experience here.
Certainly there are other marketplaces and even handmade marketplaces with their own communities and sellers who have ideas for how to improve the product. We spend a lot of time reading, studying and testing to try to find the best concepts, tools and features from people and companies who have faced similar challenges or built successful communities and websites.
So often, even our bug hunting can be started with a simple Google search for the error message or trouble description plus the code language. News articles, books, magazines, and even TV shows provide surprising insights into this business and the market in general.
In order to take advantage of all of this information, you have to do a few things:
1) Realize that it is out there in millions of places.
2) Go looking for it first (before reinventing the wheel).
3) Always be thinking about how whatever you are currently observing can impact your business (even if it seems unrelated).
Lesson # 3 – Data trumps instinct.
There are so many times I was sure something would work or would not work. We are taught to believe in ourselves and, “follow our gut instinct.” Sometimes that works. But so often, the data can be found to support or disprove whatever it is we are considering. That data (if reasonably acquired and interpreted) will trump a “hunch” almost every time.
We do a lot of testing here. We test conversion rates, SEO methods, marketing, advertising, and even the best email times of day. We gather data on as much as we possibly can. Google analytics, stats packages and even view counters are all sources of data that both the artisan and the marketplace have access to. We combine that information with studies, surveys and research done by others in our field to try to find data trends and patterns that we would never guess if we just, “went with our gut”.
Let me give you two data points recently that surprised me:
• The average shopper waits 33 HOURS between putting an item in their cart and completing the checkout process.
• Since January of 2010, organic Google search traffic has far surpassed direct “artfire.com” traffic by nearly 2 to 1.
What does the above tell us? The first suggests that cancelling an order in 24 hours if no payment is received may well be reducing the actual sales an artisan can make. The second tells us that the SEO work we have been focused on in 2009-2010 is now driving more new people to Artfire every day than if we spent $6-10 million USD on adwords per year. The impact of SEO was suspected, and the research told us it would be very valuable. But my instinct was never that it would drive so many new shoppers consistently.
As to the wait time to buy, I am someone who pays right away – I can’t imagine letting product sit in a cart for nearly a full day and half before completing checkout – yet that is the average time after surveying many hundreds of thousands of transactions.
I will continue to add more of these Start-Up Lessons as we grow. For now, I’ll leave you with some advice from my Dad:
“Learning from your own mistakes is powerful; learning from someone else’s is a heck of a lot cheaper.”
Hopefully, we can teach each other here. Just like pooling resources and promotion to create a more vibrant marketplace, pooling experience and viewpoints creates a much stronger vision for the future path of this site.