The founders of ShareGrid, a peer-to-peer marketplace for professional cameras, solved their trust challenges by introducing an innovative insurance solution.
Professional cameras are a great example of a market with a ton of untapped value. The cameras are in use only a fraction of the time, meaning it would be possible to create new value by helping people share their underutilized assets. This type of equipment can easily cost tens of thousands of dollars—quite an expensive investment for an independent creative. For a quick project, the ability to rent instead of buy means huge cost savings. Meanwhile, if you are an independent creative and have already made such an investment, it only makes sense to finance it partly by renting the equipment out to others.
Arash Shiva and Marius Ciocirlan saw this opportunity and decided to build a peer-to-peer marketplace for local creatives to rent equipment to each other.
– I’ve been a photographer for a long time and Marius went to film school, so we knew our target market well and saw the tremendous opportunity, Shiva says.
However, being non-technical early-stage startup founders with no outside funding, they ran into a common problem: how to validate the idea and get to market quickly? They were both working as product designers and didn’t want to make the leap to working on their idea full-time before validating it. Their core value proposition to the creatives included several aspects like insurance, user verification, and an excellent user experience, and they needed to test how the market would respond to it. At this point, they found Sharetribe.
– Thanks to Sharetribe’s software, we were able to bootstrap our platform and go to market quickly with a minimal budget.
By proving the concept and showing initial traction, Shiva and Ciocirlan were able to attract investors. In June 2016, they announced their $1M funding round. Today, ShareGrid has a team of 14 people, including three developers. Their platform is running on Sharetribe’s open source version which has allowed them to customize it to match the needs of their target audience.
– We currently have over $200M+ worth of inventory listed on our platform. We’re growing 15-20% month over month and are on track to become profitable without additional funding rounds.
Solving the chicken and egg problem with manual labor
– We ran several Facebook ads to landing pages pitching the concept and asking for an email address. To our surprise, over 2000 people signed up in a matter of weeks. Brent, our 3rd co-founder, actually found us through an early Facebook test, so we decided to join forces! It was a great way to build confidence in our idea.
This initial test proved there clearly was demand for their idea. The next step was to solve the chicken and egg problem. Shiva and Ciocirlan opted for a typical marketplace strategy: they initially focused on seeding the supply.
– We would onboard everyone manually. It took a lot of work to build up that initial inventory and community. It definitely wasn’t easy, but it was a necessary step to get the ball rolling in the early days of a community.
They also followed the strategy of conquering one city at a time and focused only on Los Angeles.
– With the initial manual approach, we were able to get enough early users to help us refine the product to a point where we could do a public launch. That first community had its “tipping point” about one year in.
Currently, ShareGrid is available in five US cities: Los Angeles, New York, Seattle, Atlanta, and San Francisco. They still add new markets city by city.
– New communities ramp up faster now thanks to the reputation we’ve built within the industry. We base our decision on where to go next on data: how many members sign up for the wait list in each city, and how much resources we have lined up for a launch. We’re definitely picking up in efficiency with launches and plan to expand to new markets quickly.
Figuring out the right problems to solve
When looking back at what they would do differently if they started today, Shiva mentions a theme that is often repeated in interviews of successful marketplace founders. The exact same thing was mentioned by Tristan Pollock, Mike Williams and Boris Wertz. You guessed it: focus.
– The biggest mistake we made was getting distracted by new ideas. We constantly come up with new exciting ideas and sometimes it’s been a struggle to say no. Once you’ve found your product-market fit, it’s incredibly important to stay focused and consistently improve and deliver on the core strength of your product. This can get repetitive and tedious, but in the long run it will pay off.
By focusing on the needs of their initial community, the ShareGrid team was able to pinpoint the key areas where they could provide value: excellent customer service and insurance.
– We’ve put a lot of effort into customer service. Because of that, our main driver of growth is still word of mouth.
Insurance was a big challenge for the team in their early days. As some cameras can even cost north of $100,000, it was not possible for them to cover possible damage or theft themselves., They needed an insurance company to partner with.
– When we started, no insurance company really understood our space or was willing to work with us. After a long search, we found Athos Insurance, formed an exclusive partnership, and together we built the first ever instant online production insurance system for creative rentals. We can now insure up to $750k of gear instantly, something no other site has been able to reproduce.
Now that the basic concept has been proven to work, the team has big plans for the future.
– Our current challenges revolve around efficiently scaling the business as we expand our member base and build new communities. We’re going to try to open communities within the top 10 US markets, and after that we may go international. Besides that, we think we can provide a lot of value beyond rentals in creative production verticals and we’ll focus on that soon enough.