Transforming from a network to a marketplace with James McAulay (Encore)

Please note: the transcription is automated and will contain mistakes.

[00:00:00] James McAulay: So we didn't show any of our suppliers to customers. Like you couldn't go to a search page and say, I want to see all the mariachi bands and Manchester, because if you did that, you would have seen that we had none is fed, went through an inquiry form that said, you know, I want a mariachi band in Manchester.

And, and we said, cool, you'll receive some quotes within the next few hours. And then we'd hurry off to Facebook and say, someone, someone needs a mariachi band.

Welcome to two-sided the marketplace podcast brought to you by Sharetribe.

[00:00:39] Sjoerd Handgraaf: Hi, I'm Sjoerd, CMO at Sharetribe, and I am your host. For this episode. I spoke to James McAulay CEO and co-founder of Encore a marketplace for booking musicians. Just for the record to explain a little bit, we recorded this interview already in August, 2021. So some dates in the interview might not entirely make sense, but it doesn't make the interview any less relevant.

I think the most important lessons in here are truly. For example, how Encore got started, what niece, what features they started with and also what features they didn't start with how they fake supply for awhile. How day two get demand actually broke into a wedding fair and got busted. How they combat a disintermediation or platform leakage by just adding so much more value to both sides beyond only the transaction, but also how they got hit by covet and thankfully recovered.

And then. I really enjoyed this one, so I won't hold it from you any longer. Please enjoy my conversation with James McAulay of Encore.

Hi, James welcome to the

[00:01:57] James McAulay: podcast. Hey Sjoerd thanks for having

[00:01:59] Sjoerd Handgraaf: me. Yeah. Thanks for agreeing to come on. We've been in touch for a while now, and I've heard some of the stories about Encore, but I'd love to learn more about Encore and the history, but before we dive really deep into Encore, could you tell us a little bit about who is James and what did he do before he started Encore?

[00:02:15] James McAulay: Who is James? There's a question I ask myself every day. I, um, so yeah, who was I before I started Encore as well? Good question. I. Uh, I went to a specialist music school when I was a teenager. So I studied cello and piano and I sang in choirs and all sorts barbershop groups. Then I went to university and I studied computer science with a music scholarship.

So I was really fascinated by the web and building things for the web and solving problems, but also just making music. And so I probably spent more time at university making music than I actually did studying for my degree. That meant. I knew when he got kicked out by, I got through and managed to sort of get a decent mark at the end.

And I started a couple of very small businesses at university. One was like an events comparison website, and the other was just doing it wasn't really a business. It was just doing like freelance design work. And both of those things confirmed to me when I was like 19, 20 years old, that. I would love to start my own thing and I'd love to, yeah.

Sort of be an entrepreneur and sort of do my own thing. Then I graduated and joined the program called entrepreneur first, which is a little bit like Y Combinator, but they take people before they even have an idea or a company and they take lots of individuals. Throw them all together and hope that some good companies come out at the end.

And thankfully Encore came out at the end of that like six months accelerator program. And yeah, I've been building Encore since summer of 2014. So the first, the first users joined. 21st birthday. I'm about to turn 28. So I've basically spent my twenties building this business and outside of work, I do triathlon and I still make music.

And sometimes I used to sing on clubhouse at the start of this year, before club hosts died a death.

[00:04:05] Sjoerd Handgraaf: Yeah. And okay, so that's a really interesting combination, like music, computer science, and entrepreneurial to get our, so how the dose, you know, at what point did those ingredients let's say come together and you really got the idea of long.

[00:04:18] James McAulay: So I was playing in a lot of different groups at university. I played in orchestras, I played for operas. I had my own band. I sang in a barbershop group. I was just very sort of versatile and throughout university, there was a great music scene where I studied at Cambridge. And you were just constantly getting emails saying, you know, are you free for this project?

Are you free for this project? And if you weren't free, then someone would sort of baggy for the list of musicians that might be free. So. Even then I was thinking, you know, this feels a little bit inefficient and maybe if we just had a big database of musicians, this would be easier for everyone. And also in my band as well, we'd sort of play at parties and we'd get paid to, you know, do some gigs here and there.

But again, I just thought it was quite inefficient. And like those people who were looking for us, I tried to find the band for a party. You had to sort of go around the houses and just trust that we were as good as we said we were. And so this idea was sort of bubbling up throughout. Actually I did a hackathon, I think towards the end of uni where I sort of like mocked up what this might look like.

And it was, yeah. It was sort of bouncing around in my head for about a year, my final year of university. And as soon as I graduated, I joined entrepreneur first within about a week of my graduation ceremony. Yeah. I did very briefly work on a cycling startup for maybe three weeks. I'd just moved to London and I kept almost dying whenever I was cycling in London, I kept nearly getting hit off my bike by cars.

So I was going to build a sort of. Uh, that would help you find the safest route, but I just, I couldn't quite see the business model there. And so I came back to this idea of Encore that had been in the back of my head. And I said to the CEO of entrepreneurial first, like, I think I want to build this, this marketplace.

I've had this idea for a while. And I remember just having a sit down conversation with him where he just said, like, go for it, but you're the best person to do this. Absolutely. Go and build it. Yeah. So yeah, that's how, that's how I got started.

[00:06:18] Sjoerd Handgraaf: Yeah. And then he says, go and build it. And what did that entail?

The first.

[00:06:23] James McAulay: So I think Encore, the vision has always been a marketplace for became musicians. And I always described it as Airbnb for live music when I was sort of starting out. And because I studied computer science, I could sort of build the MVP myself and start to sort of mock things up. And I met my co-founder called James.

He's also called James, uh, through entrepreneurial. Um, we decided that I think we started working together sort of, I mean, it might've been like September-ish and universities were starting up in October, so we decided let's just, let's build like a networking tool for musicians first of all, and let's solve the supply side.

And so actually for the first sort of 12 to 18 months, we were pitching it as LinkedIn for musicians. And we were saying, you know, There's no professional network for musicians like LinkedIn doesn't work. If you're a musician come and make a profile here, find people to sort of network with, you know, if you want to start a band, you can find out a musicians.

If you want to join an orchestra, you can find an orchestra. And so we really, really focused on the supply side for the first 18 months. And once we'd raised our first round of funding, Hired a couple more people, we then said, okay, it's time to it's time to bring in demand and not seeking. It was the moment that we changed our pitch from musicians, come and join a network to musicians, come and get paid gigs that the growth really took off.

And like that just really resonated with. Yeah. Yeah.

[00:07:53] Sjoerd Handgraaf: I mean, like not so hard to imagine. I tell you that's probably a lot more attractive, like there's we all know the stories of struggling musicians trying to make ends meet. So yeah, a hundred percent, if you can provide them with a great new source of income in a broader inefficient thing, that makes, that makes a lot of sense.

So some of the very first sort of marketplace MVP, let's say so. So when you progress from the networking tool to the marketplace, that you already take transactions there, for example,

[00:08:18] James McAulay: So I think, yeah, good question. We weren't, we weren't processing the money ourselves for the first few hundred transactions.

I think we, if I remember correctly, we were adding transaction fees on top of whatever the musician quoted. And then we were just asking the customer to pay that to us. And then we were saying, you know, the musician will ask you for. On the day or whatever. So for example, a musician says, yeah, I can do the gig and it's, you know, 300 pounds.

And I think we started out with, um, a commission of about 10%. So we'd actually say to the customer, okay, this costs three 30 to confirm the booking pay like a 30 pound booking fee. And so we weren't processing the whole transaction. And that model, like adding commission on top and sort of asking the customer to pay a booking fee and just asking them to pay the booking fee and then telling them to go and pay the musicians directly.

It was really inefficient. Unlike it was not a nice experience for the customer, for the musician or for us. It was very simple to build and it did mean that we could sort of learn very quickly. And so I think it was the marketplace properly started like 2015. I think it was early 2017 that we were like, we launched Encore pay.

We were using Stripe connect and we were saying to a customer here's like one number we're not mentioning booking fees or anything like that, pay this. And we will pay the musician easily. Okay. Yeah, that makes

[00:09:49] Sjoerd Handgraaf: a lot of sense. Stripe connect. Also, I just spoke to someone else for the podcast and record another episode who had a similar progression where initially they did something like that.

And then once they started chopping, connecting really started taking off because you can see it. Of course, obviously it adds a lot of value to both sides in sense of like security. Removes the friction. So we discussed a little bit actually, before we move further down the transaction road, but we discussed a little bit how you initially gathered the supply side, but you, you did this, let's say like, um, build a tool to make people come in and stick around for the marketplace kind of approach.

If, if we're really generalizing, how did you get the initial demands?

[00:10:26] James McAulay: So the interesting thing of by musicians and the sort of musicians we started with was the musicians themselves were often all sorts of demand. So we started focusing on like orchestras and choirs. We came from classical backgrounds.

So originally we approached it from the classical niche before broadening out to every channel. And within the classical world of musician, who's a violinist could also be looking for a violinist to join their orchestra next week. So quite a lot of the demand actually came from my suppliers, which was really interesting, but we realized that that segment we approached, it was quite, it was quite niche.

The amounts of money, changing hands were quite small. So people were typically spending maybe 130 or 140 pounds. You know, it's a bit one violinist to join an orchestra, whereas no, we have people spending two or 3000 pounds to book, you know, a large wedding bands. So we knew that we wanted to move beyond that in the early days.

I remember to try and get wedding planners using Encore. We sort of broke into a wedding fair. You know, we, I think we're allowed to, we were allowed to go for free if we were, you know, just attending like as a couple. So we didn't pretend to be a couple, but like we kind of said, we were just going to like look around, but we had all these brochures, like hidden in our bags and in our jackets.

And. You know, when no one was looking, we'd sort of give out these brochures for Encore. We got rumbled and the security guys saw us and said like, get out. You're not, you know, you haven't paid for a supplier tickets. Um, and one of the funniest stories from like Encore is I was about, yeah, 21. I was really naive and stupid.

Um, I got rumbled, but my co-founder was like, you know, away from me. And so when the security guy came over to me, Oh, right. Okay. Let me just go and tell my friend that I'm being like I'm having to leave. And so to get security guy goes over to James and he's like, yeah, you need to leave as well. It was really, really stupid of me and I was young and young and foolish.

So to be honest, because we were musicians ourselves, like getting other musicians to sign up, we find really easy and getting, getting demand was very different. I'd say demands properly started when we switched on ad words. Um, you know, with ad words, you can basically define, define keywords and, you know, immediately have traffic to landing pages.

I would say we became quite reliant on ad words for the first few years, and now we've, you know, diversified and we get in a lot of demand from SEO, but yeah, for the first couple of years, like a lot of our demand came from Google ad.

[00:13:04] Sjoerd Handgraaf: Yeah. And was that immediately profitable? Because sometimes the problem is

[00:13:07] James McAulay: no, no it wasn't.

Yeah. One of the hard parts about our marketplace is that the lead time between someone making an inquiry and actually booking can be 10 days, or it could be like two months, sometimes where someone spends a long time thinking about it. And so actually tracking the ROI of a certain campaign. It takes a while, but it's not as if with an e-commerce site, you know, someone comes to the website, goes to checkout and just pays immediately.

It's also different because our musicians are all giving different quotes. And so the pricing's very flexible and we can't just say, you know, this campaign for this product, we expect this much revenue. So. We didn't, I'd say like we didn't have a perfect understanding of Edwards for the first couple of years.

And then we built our own sort of estimated revenue model where we, for every single supplier type in the marketplace, we said, here's the conversion rate of string quartets. Here's the average revenue of a string quartet booking. Therefore, every lead is worth this much. The CPA shouldn't be more than that.

And finally, we started to get a handle on profitability, and now we have a really good ROI on Edwards of a boat. I think it's three or four times, which is really good, but in the first couple of years, we were sort of flying blind. Like we knew that the numbers, you know, the inquiry numbers were going up, but we didn't actually know at the time whether it was profitable or not.

[00:14:34] Sjoerd Handgraaf: I can tell you started in 2014 because he's still colored Edwards. The last nowadays I have the same for Sierra drive as well. I often started reporting like, oh wait, no longer. Wanted to call.

[00:14:44] James McAulay: Yeah. You made me feel

[00:14:45] Sjoerd Handgraaf: old. Yeah. Sorry. While you already gave away your age or. Yeah. So in your previous answer, you touched already a little bit upon my favorite topic, always in these discussions, like you started with the particular like classic classical music background, lot of string quartets, then you, now you do wedding bands, et cetera.

And I think like last time when I checked the sides, you do typically at any, anything,

[00:15:06] James McAulay: anything like mariachi bands, days, barbershop groups, Yeah, we can provide it.

[00:15:13] Sjoerd Handgraaf: So I always like to discuss the constraint question with, with marketplace founders, because that is such a, for many, especially as Sherita, also trying to so challenging to make the marketplace a smallest they can.

So, so we already discussed a little bit like your, you did a, let's say we call it a category constraint, right? Like a particular type of music. Did you also have a geographical constraint? I mean like a musician can really travel all over the country. Like if you have a violinist in Edinburgh, like, or they can suddenly come to London for one.

[00:15:41] James McAulay: Yeah, to be honest. In the first year we followed the sort of Facebook style campus by campus launch. So we ha we were in a kind of closed beta. And one by one, we would go to the music colleges around the UK and say, for example, Encore is not alive at the Royal college of music in London. If your email address ends in@rcm.ac.uk, you can join.

Otherwise you have to wait. And so we went round these music colleges, there's quite a few in London. One in Cardiff, there's one in Manchester, one in Glasgow. And then 12 months after that, and once we started getting like angry emails from musicians who were saying, you know, I didn't go to music college, but I'm very good.

And you should let me in. Yeah, we just opened it up to anyone and we actually just said, okay, you can be anywhere in the UK. And you can join this platform. And the thing with musicians is that they can travel, you know, a hundred miles for a gig. So you get quite good geographical coverage quite quickly.

But one thing I, I do regret is that we didn't focus city by city. We, we just sort of. We just opened up to the whole of the whole, of the UK. And we did that for supply and then for demand as well, we didn't target specific geographies. We didn't say let's, you know, switch on Edwards from London. We just switched on words.

So I do think that was a mistake. And you know, when Encore launches in new markets in the future, we will be taking a farm. Like a considered approach to geography, because I do think we were too broad, too early geographically, but yeah, the category constraint constraint definitely helps. Like we were specialists in classical music to begin with, and then we were specialists in sort of wedding music.

And now no we've opened up to all categories.

[00:17:28] Sjoerd Handgraaf: Yeah. How did that go? Like, how did you, uh, how do you, how do you make a decision on what to add next? For example, like how did you make, what was the second one that you added to the next to let's say classes.

[00:17:38] James McAulay: We did everything just based on the demand that was coming in.

And we had quite an interesting strategy where there are massive Facebook groups in the UK and probably all over the world full of musicians. The biggest one that I'm aware of has about 35,000 members and these groups are specifically for musicians to find other musicians for gigs or to join, join a band or something.

And so whenever a client came in asking for something we didn't have, we would go to one of these groups and say, we have a customer looking for a mariachi band in Manchester. If you're available, you know, here's the budget, here's the date, like pretty much everything that needs to know if you're available, click this link and you'll be taken through a quick sign-up forum so that you can get in touch with that.

And the way Encore works as well. It's a bit different now, but in the early days it was a total reverse auction. So we didn't show any of our suppliers to customers. Like you couldn't go to a search page and say, I want to see all the mariachi bands and Manchester, because if you did that, you would have seen that we had none.

Is that went through an inquiry form that said, you know, I want a mariachi band in Manchester. And we said, cool, you'll receive some quotes within the next few hours. And then we'd hurry off to Facebook and say, someone, someone needs a mariachi band, the mariachi band would sign up and then we'd sort of make the match and make the booking.

So we were able to sort of tell customers, we can give you whatever you want, because we were running away to these Facebook groups and sort of recruiting musicians on demand. Yeah.

[00:19:10] Sjoerd Handgraaf: So that's really interesting. So you start like busy. I didn't know that. So you started out as a, let's say like a LinkedIn for musicians, then you become this marketplace and suddenly you're like a reverse marketplace and you're hot.

You hide the whole network part, basically like.

[00:19:24] James McAulay: Yeah, like Thumbtack or there's a few platforms where you fill out a form and then you're matched with an act. And we didn't show the suppliers because a lot of them were great musicians, but it didn't have very complete profiles. We had very patchy coverage of the UK and we thought we'd rather someone made an inquiry with Encore and then we found what they wanted.

Then someone did a search and just got an empty, you know, zero results page and bones and left the website. Yeah, it makes total

[00:19:53] Sjoerd Handgraaf: sense, especially for your model. So that actually brings me to the next question. So some incomplete profiles, how do you maintain the quality of the supply side? Because like, I can imagine, especially with wedding, like, like bending bands, you only have one chance where I'd like to, yeah, you can give a money back guarantee, but you really want that thing to really work.

[00:20:11] James McAulay: Yeah, exactly. So, like I said, we started with music colleges and we were targeting like very talented musicians. Then we opened up to like all musicians and we've had very, very few sort of bad performances. Like it's extremely rare that we get a customer coming back and say, The performance was bad, but there was one incident that sort of made us take supply quality very seriously, which was someone came to the website on like a Tuesday afternoon and said, I want a violinist tonight to come and play for my, I think it was a wedding proposal, or I think maybe, you know, my fiance's birthday or something and this, uh, this very young.

Inexperienced violinist came forward and said, I can do it and sort of got the booking. And then the violinist just went underground and disappeared for like an hour or something. The client couldn't get in touch with them. You know, their phone was off or whatever, and the customer is freaking out because he's got this fancy dinner planned.

And so we had to cancel that booking, Booker, uh, you know, an experienced professional and send them at the last minute to sort of save the day. And the problem there was that that musician. Was, it was just very inexperienced. Um, you can be an incredibly talented artist, but if you've got no experience dealing with customers and sort of offering a good level of service, you can stress people out.

And so we realized, okay, we do need to sort of restrict who can sign up to Encore, who can actually get bookings. So we now have like a rating system where any musician who joins is vetted by. And their video has given a score from one to five and that score sort of influences their position in the algorithm.

So five is someone who's gone to a studio or how to very professionally shot video. And they sound incredible. A four as a musician who is obviously good, but the video is not quite sort of high-end and then anyone who's been all three, actually isn't shown in search. Isn't hard to get booked and we tell them you need better video.

You need to care better because you're not up to the standards that we require. So yeah, we now take vetting extremely seriously, because as you say with people's weddings, you cannot take any chances. And we only provide amazing musicians night in the early days, we didn't do that. And thankfully there were very few sort of bad performances, but that one in particular made me realize we need to take this more serious.

Yeah, no,

[00:22:37] Sjoerd Handgraaf: exactly. I especially like the kind of musicians that sign up for these probably are maybe a little bit more professional in that, you know, like we've all seen like tablets that certain positions can behave at parties. So you really don't want to end up with some kind of like Shane McGowan kind of person that's seeing at your wedding.

So, no. Are you still in a reverse marketplace or is it now more search book and

[00:22:57] James McAulay: trends? We are a hybrid at the moment. So the majority of our customers do still come through the reverse auction sort of process where they tell us what they want and then musicians get notified and come back if they're available.

But we have a growing number of customers who find, you know, a search page or. Uh, category page through search on Google and they'll make an inquiry with one or two acts and then bit one of them. So we offer both at the moment and it's very interesting. They both have different conversion rates at different points in the funnel.

So we're trying to sort of take the best of both and, and find a hybrid model.

[00:23:34] Sjoerd Handgraaf: Are you still asking commission from one side only, or are, you know, a double-sided commission model at the

[00:23:39] James McAulay: moment? It's only one side, but it's the musicians who pay that. So I think I mentioned earlier at first we were adding a fee on top and saying to the customer, you need to pay like a, an admin fee or a booking fee.

And customers do not like being told there's like an extra fee or a hidden fee or whatever. Anywhere on the internet, nobody likes kind of extra fees. Um, and we realized that actually the real value we're providing is to musicians. We're giving them a free work, uh, profile or website. We're sending them all these leads.

We're getting them all these bookings, we're handling the payments. We're handling customer support. If there was any sort of dispute afterwards. And so what we did was we flipped the commission, Ryan. So now the musician gives a quote. And when they provide that quote, we show a breakdown. So our commission is now 20%.

It started at 10 and we've noticed up to 20 over the years. And so if a musician says, you know, the quilt is 300 pounds for the customer, they will see. I have that they receive 240 and there's a 60 pound like commission that they're paying to Encore for the bouquet. The customer only sees that 300 pound price point.

And we can say to the customer, you know, there's no hidden fees. What the price you see is the price you'll pay. And customers aren't really aware that, you know, I'm sure a lot of them understand that there's some sort of service fee behind the scenes, but we keep it very simple and say, you know, this 300 pounds, that's the total price you'll pay.

Yeah.

[00:25:03] Sjoerd Handgraaf: Yeah. And I guess this is also a tool to sort of help the crease like disintermediation or platform leak tried. Like I'd imagine that from the supply side, there's maybe less of an incentive to go off the platform because they would like to continue doing business on your platform. But I could also imagine that, especially with a little bit hefty fee for, let's say a wedding band or a full day function band that on the customer side who was owning on, then maybe purchase this one time.

There might be some intense. So do you have that trouble or how you combat. So

[00:25:33] James McAulay: I think as a result of coronavirus, people are now extremely anxious about, you know, having to postpone their event or, you know, booking someone who has to self isolate and they need to find another act at the last minute. So actually I think the value we provide to both parties now is even higher because we do a lot of, we have like an amazing customer support team who will help with any of those problems.

And from a musician's point of view, if you know, the customer says, lik actually. The wedding's off or like, we need to push it back a year, whatever, it's actually the Encore team that are going to go through all of this sort of admin work for that. And we'll sort of make sure that musician gets any money they're entitled to.

I do. Disintermediation is a problem, and I think it's a problem for me. Or suppliers generally on a marketplace who haven't had many bookings so far. So I think the people who are unlikely to descend to mediate are the people who have sent a few quotes and just haven't been booked yet. And they don't quite see the value in the marketplace.

They don't quite feel the loyalty. Whereas we have musicians who've done over a hundred bookings with us of her errands, tens of thousands of pounds. And even if a customer says to them, oh, Do you have a website or an email or whatever, where I could, you know, sort of a bit key direct, they'll bring them back to Encore and say, it's better for both of us if we do this through the marketplace.

So yeah, it's an interesting problem to solve. We do have mechanisms in place to S you know, sort of, if, if someone sends a phone number or sends an email address, the system sort of blanks that I, and we have, we have a whole load of like technical solutions to the problem, but ultimately. The solution is to help your suppliers understand the value and help them sort of feel loyal to your marketplace because if they don't like you or they don't think you're providing value, they probably will try and take things off the platform.

Yeah,

[00:27:22] Sjoerd Handgraaf: no, absolutely. Precisely. Yeah. Yeah. And you mentioned now coviates or Corona a little bit already. I know that because we've been in touch for a long time, that Encore went through quite a, quite a wild right there. Could you tell us a little bit about what, like, how it went down for you once the whole

[00:27:37] James McAulay: thing.

Yeah. So how it went down is all our charts went down almost immediately. The first week of March was our best week on record for booking volume for a GMV, for revenue, everything was looking very good. And I remember in the first week of March, Like there's a storm coming, but people are still picking musicians.

I don't quite understand what's going on here. And I remember, I think it was the day that Boris Johnson said in the UK, you're not allowed to go to the pub anymore. I think there was a day where he said, okay, you can't go to the pub. Is that everyone started freaking out. And, um, yeah. All of, all of our sort of bookings completely fell off a cliff and revenue felt to almost.

For the end of March and the whole of 2020, was I a real struggle, just trying to, first of all, deal with a huge wave of cancellations and postponements, and we have some customers who've had to postpone their wedding, you know, three or four times nine because they, you know, they had it in June, 2020, and they've tried to move it to August and then they had to move it to 2021.

So 2020 was, was not good. And our strategy was. Let's just try a few different revenue, business models, a few different products, and just see if anything sticks, because we know that people aren't going to be became musicians for, for events for a while. So we launched the personalized music messages, which were like sort of musical postcards that people could send to friends around the world.

Um, we did virtual Christmas parties and sort of virtual team-building towards the end of the year. We did a couple of massive surveys. One about, um, how musicians were sort of responding to coronavirus and one about how musicians were responding to Brexit and all those things. So, I mean, obviously the surveys didn't make any money, but the, the other products didn't really generate that much revenue, but they generated more press and sort of more press coverage in 2020 than we've ever had in like the first six years of the company's life.

So. I think Encore is brand sort of presence grew dramatically. And our SEO position increased a lot last year because of all the backlinks and all of the press. Um, and thankfully in February this year, Boris Johnson went on TV and started sort of laying out the roadmap to knock down easing and sort of setting out these dates.

And since February, we've just seen our inquiry volume in our bookings climb and climb and climb and no. We are doing about double the number of bookings that we were doing before Corona virus. So the business is doing extremely well as the team has grown from like nine people last year to 20 people now.

And there are so many people trying to pick wedding bands and singers and DJs and genuinely, we have too much demand at the moment. And you know, the problem now is trying to keep up with the demand, which is a very nice problem.

[00:30:42] Sjoerd Handgraaf: Yeah, no, I, yeah. Wow. That's amazing. Well, I, I, because I remember like you indeed, when you started with the music messages and I think that most, I was just very impressed with your men and your entire team's like tenacity and ability to switch.

And so, yeah, super, very impressed. And then really nice to actually know. Now, here, here, more of the full. Thank you. So what, so now, like we're in a great situation. Demand is stronger than ever. Um, what's next for Encore? So you have, now, if I'm correct, like, I mean, feel free to add things. So you now are really like booking live music for anything, and I believe you also still have the virtual part in there right in

[00:31:21] James McAulay: the mix we do offer it.

But the demand for that has dropped significantly. I think everyone's sort of tired of. Social events. And if they can focus on real life things, they will. So, yeah. What's next for Encore? It's a good question. I think we, so I might, I might be wrong here, but I do think no in the UK, we are. The second largest provider of musicians by booking volume.

I think we're very close to becoming like the biggest provider of musicians in the UK. So that's like a, that's a position we've, we've been sort of hunting down for a while and that's, that's very exciting. I mean, naturally we're all saying. No looking at other geographies as well. Personally, I've always wanted to sort of take Encore international.

And I look at a lot of markets and I see like a huge opportunity for Encore and just like platforms like Encore either don't exist or are extremely early stage in other countries. And so I think the opportunity for Encore and other countries is massive and. Yeah. Ultimately, I think we do want to be as, as cheesy as it sounds, we do want to be the biggest provider of live musicians in the world.

So that's really, that's the big strategic focus at the moment is, you know, where, where do we go next? Once we have sort of secured our position as the market leader in the UK?

[00:32:44] Sjoerd Handgraaf: Yeah. Yeah. No, it doesn't. That makes sense. Even though other countries might be early stage, of course you, you have this like problem or like your marketplace model has the issue that you need actual to have supply on there.

Uh, so you basically start from scratch in any, any location that you, you open up. I'd imagine.

[00:33:03] James McAulay: Yeah, we would start from scratch, but we we've sort of come up with some pretty efficient recruitment strategies for finding musicians. And I think the pitch to a musician is quite compelling when we can show what we've done in the UK already, we can show that we've done, you know, over 15,000 bookings that the average score, the average review score is about 4.95.

Five, you know, customers and all of the service and, you know, if we can do it in the UK, we're confident that we can do it in the next country. So yeah, we would, we would have to start from scratch. That is definitely that, you know, that sort of chicken and egg problem again and again, is, is. Part of doing like a localized marketplace.

If you were, if you were providing an online service, then it would be completely different. But I think we know so much more now than we did, you know, when we launched in the UK. And when I look back at, you know, the early days of Encore sort of shadow because we made so many mistakes and I think we know what to do now.

And I do think. Every subsequent country, it should be a bit like learning new languages. I imagine that, you know, learning your second language is quite hard, but then learning the third one gets a bit easier. And the fourth one is probably even faster after that. And I, I would like to think that we could develop a playbook for launching in countries that would sort of get better and better each time.

[00:34:24] Sjoerd Handgraaf: Yeah, no, I'm I'm sure. Okay. Then last question you ever sort of already touched upon this a little bit. You shudder, when you look back at certain things that you've done, is there anything you would've done differently or anything you'd like to pack in sort of lesson two, the audience for the podcast who are mostly very early stage or at least way earlier stage than you are that will help them move forward or not make the same

[00:34:46] James McAulay: mistake.

Well, yeah, when I shot there, I sort of mean there were just so many, I just looked back and I sort of feel like we were so inefficient and we were doing, I guess we were sort of subscribing to Paul Graham's advice of doing things that don't scale. And there was a lot of manual work and that's necessary in the early days, but, um, yeah, like trying, trying to, trying to automate as much as possible as quickly as possible provided, you know, you have to, the product resource, I think is like a great investment personally as well.

I just wish we'd thought about SEO from day one, because like I said, we were so reliant. Google ads. And we didn't do anything on SEO for the first, honestly, for the first two or three years. And we started working, I think it was about four years and we started working with an agency for about a year or two.

And we've been working on SEO every single quarter now for the last three or four years. And it's no, our biggest source of inquiry volume. It basically helped us get through. 2020, because we switched off all our marketing channels and SEO was the one sort of free source of traffic that kept on going.

And I just look back and I think if we, if we'd started that even a year, like a year earlier, we'd probably be in an even stronger position right now. So yeah, that. That would be my biggest piece of advice actually is SEO takes a long time to see results. And in the early days where you need, you know, quick results immediately, um, it's very easy to neglect SEO because you write an article or you write some content.

Yeah. Nothing happens for a few weeks, but it does combined and it does just require patience and it can become an extremely, extremely beneficial channel. It brings all your, you know, blended acquisition costs down. It looks very attractive to investors. It makes your business more sustainable.

[00:36:46] Sjoerd Handgraaf: Yeah, no, that's great advice.

Yeah. I mean, it's a, of course like the Paul Graham there, there's definitely some value in that, in that quote, like do things that don't scale, because I've also seen people trying to over-optimize for things where I feel like, well then, like the investment you would make an automation sort of equals the time you would save.

So it's not always great. But, um, yeah, no, I, I, I always feel the same thing also about brand, right? Like people never really think about brand building. On deal. It's like about like two years too late. It can't, it's hard to quantify now. That's great

[00:37:16] James McAulay: advice. Yeah. The example of doing things that don't scale, as we built a tool where a musician could just give us their website and we would create an Encore profile for them.

And that was quite a lot of manual work, you know, downloading their photos, like copying their biography, whatever. And it felt like a great feature at the time, but it didn't really help us actually address the problem, which is how do we motivate musicians to fill out their own profiles. And so what happened was we had all these great looking profiles, but musicians who weren't active and like didn't really understand what Encore was because they hadn't invested the time and understanding it themselves.

So that's an example of, yeah. Something. May do differently if I was going to start again.

[00:37:58] Sjoerd Handgraaf: Yeah. I think that's also a difficult balance to strike anyway, between like you need making, making it as easy as possible for supplies have to onboard then making it sort of hard enough that they are somewhat invested in it.

So, yeah, that's also a really good point to raise. Hey, thanks so much for your time. Thanks so much for sharing the story of Encore. I'm super happy also presently, because we know each other a little bit, that things are going yeah. Thank you. Maybe your last pitch for where people can find Encore is people with weddings in their future are listening and located in the UK.

[00:38:28] James McAulay: Yeah. So if you're it's actually anything though, so we're not, we're not focused on weddings. If you are having a bar mitzvah, if you're having a birthday, uh, you know, if you are proposing whatever. Um, and as you said, if you're in the UK, uh, you can find us at Encore, musicians.com.

[00:38:45] Sjoerd Handgraaf: All right. Thanks a lot, James.

Thanks to.

[00:38:50] James McAulay: Thank you for listening to two-sided the marketplace podcast. If you enjoyed today's show, don't forget to subscribe. If you listen on iTunes, we'd also love for you to rate and give us a review. If you got inspired to build your own marketplace, go visit www.sharedrive.com. It's the fastest way to build a successful online marketplace business until next time.