How platform companies attracted their first 1,000 customers: Successful platform companies such as Uber, Airbnb, and Etsy had to understand and tackle a “chicken-and-egg” problem early on, Michael Blanding writes for Harvard Business School’s Working Knowledge. To connect people on both the demand and supply side, they had to acquire both, Professor Thales Teixeira explains, giving three lessons. In the platforms’ case, the egg comes first; the companies had to get the service side of the equation first.

Lesson one: Think like a customer: You need to think like customers and where would they go to find service suppliers. Take Airbnb, they found some listings on Craigslist, “created software to hack Craigslist to extract the contact info of property owners, then sent them a pitch to list on Airbnb as well,” but it doesn’t stop there as you’ve got to give customers “something better than they had before.”

Lesson two: Create a better experience: You must be able to show that your service is better than competition. Uber, rather “than starting out with Uber Pool or Uber X, in which drivers use their own cars, the company started with black cars driven by professional drivers. That way, they could ensure that customers would have a great experience virtually every time they used the service.” Airbnb hired professional photographers to take more attractive pictures of their listings. Etsy attracted first-tier artisans by scouting craft fairs offline across the US. Next, is how to target growth strategies.

Lesson three: Sequencing is everything: You need to know when and where to expand to maximise success. “Since Uber’s main competition was taxi cab companies, the startup researched which cities had the biggest discrepancy between supply and demand for taxis. They then launched during times when that demand was likely to be the highest, for example during the holidays when people tend to stay out late partying.” In addition to capturing markets, this strategy also meant the startup wasn’t flagged as a threat as it only ate up excess demand. “By the time you have a foothold in the marketplace, it’s already too late for them to do anything about it.”

From there, the challenge becomes how to grow from 1,000 to 100,000,000 customers. Word of mouth might work for the first 1k customers, but the next level of growth could be propelled by targeted digital marketing. “Only after passing the millionth customer can you go into advertising on traditional media,” Teixeira says.