Suppliers

How do you get them on board?

I've spent most of my career dealing with the airline side of the flight sales business. Because of this, I naturally assumed that the supply side is the starting point of a marketplace or distribution business. To a certain extent, this is true. In a standard, healthy business model, suppliers pay to participate in your marketplace—and therefore pay your bills. The content they provide makes your marketplace attractive to your customers, whether those are end-consumers or other businesses. Moreover, the supply side offers a path for you and your team to gain industry expertise, ultimately maximizing the value of your venture in the long run.

How do you onboard suppliers when your product is still in development? Well, the supplier game closely resembles the fundraising game. If your suppliers are large, established businesses—like airlines—you need to pitch them a vision and product so compelling that they'll want to be first in. Essentially, you want to create a fear of missing out.

Easier said than done. The key is demonstrating that your marketplace will outperform others or open doors to untapped markets for your supply partners. In a consumer-facing environment, a well-thought-out prototype showing how users can purchase products more efficiently can do the trick. If your platform targets other businesses, it's trickier. You're making a promise they must believe you can deliver. Having signed-up pilot customers already will make your job significantly easier.

At flyiin, we actually did a good job of bringing airlines on board with our Air Travel Marketplace concept. There were several reasons for this success. First, I had a strong network within airline organizations, bolstered by the presence of a former airline CEO in our venture as our early angel investor. His association with flyiin opened doors and gave us instant credibility with many airlines. Second, some of the largest European and US airlines had made significant investments in building sales and distribution APIs, and they were eagerly seeking partners to use them. Finally, our product concept was refreshing, relevant, and incredibly appealing (I might be a bit biased here).

In about two years, we had secured the participation of more than ten airlines in our Air Travel Marketplace, with numerous ongoing discussions with others. At that time, airlines viewed us as an exciting newcomer and the ideal platform to test their sales and distribution APIs as soon as they were ready to expose them to third-party sales channels. We were on a roll.

In 2018, when we pivoted, it was a whole different game. Our traction with airlines slowed down. Sure, those already on board stayed on. Our strategy to serve channels outside the traditional travel agencies space was still appealing and sensible to them. However, we didn't have any platform customers yet to demonstrate the validity of our strategy. The signatures of two pilot customers didn't really change this—as they weren't representative of our claimed strategy.

Our story would have been completely different if we had secured either Airbnb or Capital One (both companies we were in discussions with). However, two major obstacles stood in our way. First, the Covid pandemic hit. Second, even without such crisis, these players wouldn't have partnered with such an early-stage company as flyiin.

Key Takeaway #31

Onboarding suppliers is essential for the success of a marketplace venture and resembles the fundraising process. It requires a compelling vision to create a fear of missing out among your target suppliers. Success hinges on demonstrating your marketplace's potential—through prototypes for consumer-facing marketplace or pilot customers for B2B platforms.