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PIVOT: REINVENTION CENTRAL

A Talent Matchmaker Struggles to Balance Supply and Demand

Customer demand inspired the business, but it turns out good customers are hard to find.
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This case study is part of Inc.'s Reinvention Central Special Report. 

The Dilemma: Supply and demand don't match

Company: Matchist

Founded: 2012

Location: Chicago

Co-Founders: Stella Fayman and Tim Jahn

Back in 2010, Stella Fayman and Tim Jahn repeatedly met business owners who said, "I can't find a developer to help me build my idea!" At the same time, the two knew many talented developers who couldn't find work building sites and apps.

That's how Matchist was born. In 2012, Fayman and Jahn launched an online network designed to link Web and mobile developers to clients who need their skills. As with more established networks such as Elance, Matchist's model is to take a cut from every transaction its site enables. It got crucial promotion through the website Hacker News, and more than 300 developers from across the country signed up the first week. Since that time, the network has matched nearly 1,000 projects to developers.

Very quickly, however, Matchist encountered what Fayman calls "a chicken-and-egg problem": It had trouble finding the right kind of clients, and without the right clients, the developers began to drift away. "The clients weren't sophisticated," she says. "They didn't know what they wanted or how much a project should cost." The co-founders have pursued a number of strategies to land viable clients, spending money on Google Ads, Facebook ads, content marketing, and SEO. For the past few months, the company has been considering a pivot: Should it become, for example, a recruitment service for full-time developers? To date, Matchist hasn't found the right new strategy. 

The Experts:


Rick Desai, Co-founder of Dashfire; board member of R3 Resources; adviser to Internet startups.

"The company could invest more time and effort in educating clients so that they understand what their technology projects really entail."

 

 


Dharmesh Shah, Co-founder and CTO of HubSpot, which provides an inbound marketing and sales platform and related services.

"There may be a lucrative opportunity in recruitment, because companies spend a lot of money to hire awesome developers."

 

 

The Advice:

Matchist's fundamental problem comes down to "a huge disconnect between early-stage entrepreneur and experienced technologist," says Rick Desai, co-founder of Dashfire and a startup adviser. The paths toward reinvention, then, are mostly about trying to close that gap.

HubSpot co-founder and CTO Dharmesh Shah recommends that Matchist "dig much, much deeper into customer development on the demand side." The company must think more carefully about its potential customers, says Shah: "What issues do they have? What would compel them to use Matchist versus whatever they're doing now?" Even though Matchist has worked hard to provide a convenient digital interface between clients and developers, landing the best customers might be better done through in-person networking.

Another option is to educate clients about what development work entails and how much it costs. Desai suggests that Matchist could even offer an inexpensive consultation service in this vein.

Matchist has assembled a large network of developers it trusts. That could create a different opportunity. "Everyone says they can develop," says Desai. "But if Matchist can say, 'We know these people. We've auditioned them; we've validated them,' that's really useful." This could allow Matchist to reorient itself as a provider of full-time talent who clients can try out by hiring them for a project first.

 

 

How to Launch an Online Marketplace From Scratch

Stella Fayman explains her epiphany when she launched Matchist, her site that matches developers and startups.

IMAGES: Courtesy Subject, Adam Detour
From the June 2014 issue of Inc. magazine

JAMES LEDBETTER | Editor of Inc.

James Ledbetter, before joining Inc., was the Opinion Editor of Reuters. He was the founding editor of Slate's financial site The Big Money, deputy managing editor of CNN Money, and has published five books.




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