Building a Successful Platform Business
Rome was not built in a day—learn how taking the time to fall in love with the food industry's problems helped us build a successful platform business.
In this article, Alessandro Petrucciani, one of foodcircle's Co-Founders, sheds light on his personal journey over the past years of getting to know every inch of the market and developing a highly benefit-driven service portfolio. Today, he’s excited to introduce you to the new foodcircle and share the five key steps we followed to build our successful platform business.
Building a sustainable startup requires that you solve real challenges in your industry while also navigating your business toward a profitable future and continually maintaining the ethical standards that you set for your enterprise.
If my experience of founding foodcircle.com has taught me one thing, it’s that you need to fall in love with the problem, not the solution. That’s how we successfully developed our end-to-end procurement platform for the food and beverage industry.
Every startup ebook tells you to "talk to your customer". But that’s easier said than done. The tendency for founders is to strike up a conversation, but as soon as they have the brilliant idea, boom, you go straight back into the trap of falling in love with your products. It’s easy to forget that your user sample was probably not statistically significant for the sizable market you are trying to address. I have made that mistake myself in the past, but not this time!
One of the best decisions I made as a Co-CEO was to intern with one of our customers in Hamburg in foodcircle’s first year. Unusual? Certainly. Eye-opening? Absolutely! Being right there on the ground delving into day-to-day procurement work really helped us gain a competitive edge from the start.
Rather than pre-defining which products or services to bring to the market, we asked the market what was not working, what was causing frustrations and what experiences could significantly boost workstream efficiency. By positioning ourselves alongside players at multiple points in the supply chain, we were able to substantiate our market findings through first-hand experiences. We were shocked to learn that everyone in the industry was facing such severe and similar issues, but nobody was doing anything to solve them.
Over the past two years, we applied five simple steps to our business model design. This gradual but well-calculated approach allowed us to build a successful platform business that solves a whole string of food industry problems. From the beginning, it was clear that we weren’t just going for the lone bird — we wanted to tackle the entire flock. Now, we are well-equipped to start scaling up. Here’s how we did it:
1. Learning the problem
At foodcircle, we spent two full years (!) analyzing the food industry’s inefficiencies from every perspective, continuously developing our service portfolio further based on our learnings. We meticulously interviewed +50 F&B companies and stakeholders and asked WHY a hundred more. We iterated countless concepts and prototypes based on their feedback. Some of our key findings included the following:
Moving into the key developmental phase, we faced the food industry’s real dragons; first as a supplier, then as customer.
2. Developing the demand side and building trust
Going in, I knew from previous entrepreneurial endeavours that, when you start a new marketplace, you are faced with the age-old chicken and egg problem — to build a customer base, you have to offer products, but you also have to convince sellers of your potential, without having the customer.
In this stage, we focused on growing the demand side of the platform. We built a pilot platform for placing orders. We handled our own logistics. We handled our own payments. We sourced our own ingredients.
By experiencing the industry the same way our customers do, we were able to get to the root of a number of problems. Meanwhile, my co-founders spent months iterating pitches via cold calls, emails and face-to-face meetings.
Once we had collected a certain amount of data and learnings, our comprehensive understanding allowed us to start developing concrete solutions. Once we successfully established a group of trusted customers, we had the leverage we needed to turn around and expand our supplier network further.
3. Developing the supply side and building trust
In the next phase, we used our learnings from the demand side as the basis for collecting information and learnings from our suppliers. Taking a similar approach, we assessed pain points, devised solutions, tested prototypes and fine-tuned our tools with their support.
In doing so, we were able to devise a comprehensive Enquiry System as well as game-changing Buyer and Supplier Dashboards, always ensuring that any solutions we developed simplify communication between stakeholders and promote significantly more efficient workstreams.
4. Connecting the dots via value-added services
Only after we had collected extensive learnings from all sides and built up both networks, did we truly understand how the food supply chain works, both for buyers and sellers. Having connected the dots, we can proudly state that the industry’s problems are part of our DNA and we finally have a product that serves all parties and provides additional value: foodcircle Order System, foodcircle Logistics, foodcircle Payments, and foodcircle Sourcing!
Thus, our procurement platform is the solution.
5. Scaling the business and transforming the industry
For the past few months our platform has been in private beta. During this time, we’ve already seen a 10-fold improvement in our main KPIs. Since officially launching our new site, we’ve already seen an exponential uptick in requests and look forward to watching these numbers continue to rise.
In upcoming months, at foodcircle, we’re primarily focusing on rapidly expanding our highly skilled team of food tech professionals, growing our customer base exponentially hitting our new revenue targets and developing our service portfolio further.