Advantages of Scaling an Operational Marketplace Out of Turkey

Glocal is a podcast on locally incubated global startup success stories.

Cleanzy (featured in Ep.5) is a home services marketplace that started in Turkey and later expanded internationally. At its peak, the company cleaned more than a 1,000 houses in 1 day! This article highlights the advantages of starting an operational marketplace in Turkey, from our conversation with Tayga on Episode 5.

Endless iterations until the right market and model

Cleanzy started as a ride-sharing business, moved to home services and then decided to focus only on cleaning. The company had to overcome regulation hurdles while at fast experimentation phase to reach early product-market-fit. Tayga had the luxury to consider different verticals and models thanks to less competitive local market and iterate fast as it was not hard to create initial liquidity even without a product.

Easy to overcome the chicken and egg problem

Marketplace businesses often cannot reach the critical mass required to bring liquidity. Starting in a large but very concentrated market with mediocre disposible income and young job seekers, Cleanzy initially onboarded cleaning businesses on its supply side which also enabled it to ensure quality and manage supply availability.. The company then generated some demand but needed more to satisfy its supply and have a better cash flow. Levaraging on Tayga's enterprise connections, Cleanzy launched its b2b offering and grew exponentially.

Cheap to fail and endless learnings

Low costs mean more experimentation on every part of the business including technology, business model, demand/supply acquisition, mechanisms to increase marketplace liquidity etc. Fortunate to start in Turkey, Cleanzy shifted its model a couple times, developed different b2b partnerships, tested various commission rates and incentivization schemes to increase retention on both sides. Cleanzy is not the most funded or the biggest company in the space, but it is the one that has tested, failed and learned the most. The ability to have an organization wide agile experimentation mindset is Cleanzy's competitive advantage as it enters different regions.

Growth mindset and expansion playbook

Istanbul is a good initiation point, but Tayga knew the constraints of the local markets and had bigger dreams from the start. Analyzing Istanbul's strengths and weaknesses, Cleanzy considered 12 different markets with the following parameters necessary for their success:

• Unemployment rate should be preferebly medium to high, so that it is easier to find high quality supply from the start.
• Population should be 1M+ to generate enough demand and make the business profitable fast
• Transportation easiness increases liquidity of the marketplace and makes it easier to match supply and demand.
• Minimum hourly wage should be low to generate more demand at a lower price point.

Onboard high quality supply, generate demand to ensure supply satisfaction and work on B2B relations to take the marketplace to the next level.

Product and model maturity

Apart from maturing the business model thanks to learnings and fast iteration cycles, cheap but high quality talent also played a big role in developing better technology. Through advanced matching algorithms that factor in the job type and distance, incentivization and gamification mechanisms to manage supply, and fraud detection to identify disintermediation, Cleanzy definitely outplays its competition.

Customer funded business, thanks to limited capital available

Turkey's fundraising landscape is tough and it pushes companies to generate positive cash flow as they grow. What's more important is the problem-solving mindset that sits in the core of the company culture.

"I'm really sick and tired of the Homejoy example. They just threw money at the problems..." - Tayga, Cleanzy

Solid vision and culture

Cleanzy's goal is to enable more cleaning professionals earn more money while living a balanced lifestyle. Solving the problems for the supply side means better quality of service and reliability for the demand as well.

Glocal Podcast is available on Anchor, Spotify, Apple Podcasts, Google Podcasts, Pocket Cast and RadioPublic.

Follow us on Instagram or follow Enis on Twitter.