It's kinda funny how strategy and tactics can cross over between totally unrelated businesses.
We've taken a pretty similar approach to keeping companies honest. What we realized was that in niche markets, trust drives transactions and people are often aware that burning relationships for short-term gain has a drastic impact on lifetime value, especially if there are strong network effects.
Fortunately, we've only had to threaten to use the contractual stick a handful of times, and in each case, the mere appearance of the stick in the conversation served to recalibrate things, bringing the dialogue back to the fair center.
The cold start problem is real and one that really took us a lot of time and effort. The time spent to understand the mechanics of our marketplace manually paid itself back later on, when we realized that it helped us understand churn, and specifically how to mitigate it.
We've taken a pretty similar approach to keeping companies honest. What we realized was that in niche markets, trust drives transactions and people are often aware that burning relationships for short-term gain has a drastic impact on lifetime value, especially if there are strong network effects.
Fortunately, we've only had to threaten to use the contractual stick a handful of times, and in each case, the mere appearance of the stick in the conversation served to recalibrate things, bringing the dialogue back to the fair center.
The cold start problem is real and one that really took us a lot of time and effort. The time spent to understand the mechanics of our marketplace manually paid itself back later on, when we realized that it helped us understand churn, and specifically how to mitigate it.
Enjoy the read!