The Peerby effect

‘The Peerby effect’: a phrase my colleague uses to refer to an overabundance of media attention. Peerby has become the darling of the startup scene, offering a service that feeds directly into the sharing economy. (Founder Daan Weddepohl: “Peerby is a website and app that enables people to borrow what they need from people in their neighborhood in thirty minutes or less.”)

Press release leaked

‘The Peerby effect’ comes mostly with advantages. Says founder Daan Weddepohl:  “I've had people with big companies say to me ‘I hope one day we’ll be where you guys are.’ It brings credibility, opens doors and helps to connect to partners, they know you and your reputation. And not bad either: I can fund part of my salary by doing presentations.” The media attention especially helps in creating a bigger following and more users. There is a disadvantage to this popularity, however: “It’s impossible to do any covert experiment. When we tried to test our delivery concept, the Telegraaf (national newspaper) wrote that we released Peerby on demand.” Daan laughs, “I guess it’s a luxury problem. Apparently now we’re hot enough to get our press release leaked. ”

NL, BE, GB, DE, US

With over 150.000 users, Peerby now has user communities in the Netherlands, Belgium, in London and Berlin and is running pilots in ten US cities. Peerby was not an instant hit: after disappointing results on a student campus it only really took off once released in Amsterdam.  As Launchpad Amsterdam is a friendly place says Daan. “In other places like San Franciso, London and New York, people are fighting for attention: Amsterdam is compact enough for a buzz to propagate quickly. People like to say Amsterdam is Europe for beginners, and I guess it works the other way around as well: our country is like America for Europeans.” With the Netherlands being the perfect testbed to coordinate an international release, most of the Peerby team is based in the Netherlands, with four people in Gent and San Francisco. Daan makes it clear that Peerby still has a ways to go despite an admirable 60% fulfillment on the supply side in the US. “We have scaled the supply side of our business plan, but need to figure out important aspects like the demand and the revenue.” So why scale anyway? “Because by doing it we discovered where you need to be in order to scale. We are not ready, yet.”

Too soon, too quick?

It is one of the lessons learned: having a repeatable, scalable model from the onset is not always desirable. “We started way too scalable. The great thing about being a startup is that you can experiment with doing stuff for just one customer, stuff you can’t do when you have a million.” Peerby automated its system from the start, but is now trying a different approach for growth.  The team is experimenting with a new value proposition in which users rent items and have them delivered to their doorstep. It is the perfect example of learning by doing on a small scale: the team finds the renters, talks to them and delivers items themselves. “Getting hands-on learning experience helps you to truly understand what your customer wants and needs.”

Being lean like a Buddhist monk

“Ideas only become valuable once you start validating or invalidating them, it’s worth knowing an idea doesn’t work. Too many people think they need to build an app or website before they can start. If there’s demand for your idea, you should be able to start selling it today, without an app. When we tried to follow the Lean Startup methodology, we learned that being lean is not something you do on the side; you should do it like a Buddhist monk is Buddhist. You need to maximize your learning experience in the shortest time span. The Lean method is counter-intuitive to many people, counter-cultural even. We try to build perfection: in our attempt to get things right we don’t follow up on our assumptions and as a result get things terribly wrong. We need to do things in steps that are small and measurable – validated learning. There is no known outcome in a startup.”

Ecosystem: building trust networks

Where Daan started as a participant in the Rockstart accelerator program, he is now a mentor there. “Being a mentor should not be about voicing opinions, but about sharing knowledge on a very specific topic; my mentorship is valuable to people who are looking for advice specific to what I have experience in. If you need information on p2p hyperlocal marketplaces, for instance, I’m happy to help.” Daan’s views on mentorship extend to what he feels makes up a healthy startup ecosystem: “You need to establish trust networks where there’s mutual respect between people doing great stuff in the startup scene. They can then start recommending people to each other. Help each other find the right person for the right question, so that when you get a request to connect, you know you are able to exchange value.”