5 pitfalls to avoid when launching your own platform

From the temporary employment market to the taxi business and from healthcare to the construction industry; numerous markets are dominated by online platforms. This makes sense, because by matching supply and demand without intermediate steps, you save money and you are fast, agile and efficient for your customers. Do you have plans to start your own online recruitment business? Ruud Schippers of recruitment platform JAMwerkt did just that, and tells us about the 5 biggest pitfalls you should avoid when launching your own platform.

Online platform JAMwerkt matches talented young workers with local businesses. The JAMwerkt offices are located close to their target audience, in the business park at Eindhoven Airport. Ruud Schippers, 26 years old, his brother Martijn, and their sister Miranda launched their business back in 2012, while they were still in college. They spotted opportunities in the market for young people. Services could, and should be faster and more efficient. 7 years on, the company employs 17 people and posts revenue of around €4 million.
If you too would like to successfully launch an online platform, you should avoid the perils below.

1. Wait to go live until your website is perfect

The siblings had a single purpose in mind when they started their business: linking the supply and demand of labour. They had 2 groups of users in mind in launching their business: young people looking to make some extra cash on the side, and regional businesses in need of temporary labour. Creating a fully functioning platform can easily take months, or even years, but the 3 young entrepreneurs were not willing to wait that long.  “The website was far from perfect, but we wanted to get it up and running as soon as possible; there was money to be made, after all!  Since we were so young, we got a lot of goodwill from local businesses; they wanted to see us succeed. Even though we had a bit of a messy start, we ended up getting away with it. Also because we did not pretend to have all the answers and were always looking to make improvements,” Schippers explains.
In creating the first version of their website, the siblings drew on their network. “We hired a student from Eindhoven University of Technology to work on the site. We had come up with a pretty sweet deal for him. The student received a percentage of our quarterly revenue, which was paid out to him 1 month following the end of the quarter. This arrangement motivated him to keep improving the platform and making it more user-friendly, which also meant we had revenues coming in before we had to pay him.”

2. Going into business with the very first developer

Business was going well, and when the company branched out into other areas, the website no longer met the needs of the business or its users. After 3 years it was time for the next step: hiring a professional agency. “Our business was growing, and the website became increasingly complex. After parting ways with our student, we hired a part-time developer through a specialised agency, who worked regular hours. To safeguard the knowledge, we work with 2 developers. If one fails, there is always someone who knows exactly what it is.”

They opted for this agency because they had experience with similar platforms. “We thought very carefully about who we wanted to do business with. It was not just about presenting a slick-looking homepage; the back of the website also had to be well designed, as we have been spending years creating our own recruitment software.”

3. Underestimating the costs of creating and maintaining a platform

You might think that creating an online platform need not cost a lot of money. The reality is that it is expensive. Schippers makes a rough estimate: “It is hard to say, but think about €100,000. And per week you will certainly spend another €1,000 on maintenance and optimisation.”

The siblings started small and launched their business without any external funding. “We managed to do this by reinvesting a large share of the profit into our business and not using too much to cover our own personal expenses. That was a strategic decision. We wanted to keep control of the business ourselves and not need to rely on the involvement of a financier.”

4. Neglecting to ask your target audience for feedback

Schippers has observed that launching a platform is quite a different story from actually running a platform: “Setting up the perfect website is no guarantee for success. Many businesses spend as much as 1 year preparing the launch of their website. And then they discover that the website does not pass muster. You can avoid that by involving your customers in the development and test stage.”

Schippers is sorry to have to say their business experienced this very thing: “We failed to put into practice the first lesson you learn in business class: listen to your customers. But in developing subsequent versions of the site, we did ask users for input. You always need to be prepared to let go of some things. Kill your darlings, as they say.” He explains: “One of the first services we provided to users was something called Dagjeswerk (daywork). This feature allowed the people working for us to indicate their availability. In some cases, they would do this weeks or months in advance. Our customer would then count on the kid in question to show up, but they had made other plans in the meantime. And had forgotten to change their availability status on the website. We ended up getting a lot of phone calls, which required us to make a lot of last-minute changes. Being student entrepreneurs, we really had no time for any of that. We concluded that, while the service we provided met the needs of these businesses, it did not suit the lifestyles of the young people who worked for us. We then made some changes to our platform and began to focus more on regular part-time jobs for students, seasonal work, and full-time positions.”

5. Adapting to change too late

Schippers makes changes and improvements every week based on feedback received from users. He uses a smart digital application to work closely with his team of developers. “Make sure you can implement any changes quickly and that you keep optimising based on user experiences. The world is changing at such a rapid pace, and you need to be able to adapt to those changes. In our line of business, you often have to deal with regulatory changes as well. Every new law also creates new opportunities. And although you cannot control the legislative process, you can find out how to navigate it as effectively as possible.
The driven young entrepreneur also wants to be flexible in terms of managing employees. He proudly shows us the quarterly schedule, a simple A4 page containing focus points and key objectives. “All employees have this same piece of paper in their workspace. The quarterly plan is part of the annual plan, which is the dot on the horizon. We draft this plan at the end of each quarter, so we can factor in external influences and take advantage of whatever opportunities are out there.”

JAMwerkt’s future plans

So what is in store for JAMwerkt (in Dutch) for the foreseeable future? “Our platform currently covers more than half of North Brabant province. The plan is to expand across the entire province and then move into the surrounding provinces as well. We made a point of not launching nationwide right away. We aim to provide comprehensive and effective services in the geographic areas where we currently operate. Our ultimate objective is to operate nationwide.”

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