0:00
You build a company that is worth $20 billion.
Search this video
0:02
But just put that in perspective.
0:03
That is more than if you add up the entire market cap of Wendy's, Under Armour, Herz rental car, Harley-Davidson, American Airlines.
0:14
Also, isn't that bananas when you hear that? >> Yeah.
0:18
I think it's absolutely nuts.
0:26
What I find interesting about you is that you went from a guy who's a kid who was working in a deli, almost failed out of high school to now you've you built a company that is worth $20 billion.
0:35
In all in all honesty, I try not to focus on the number cuz I just like if you focus on it sort of scene zip scene and then you're like, well, I've, you know, done a lot already, I'll pat myself on the back.
0:48
But I think we're pretty early in what we're doing.
0:50
And so I just try not to think about it and just sort of look at like the problem ahead and put one step one foot in front of the other.
0:56
And yeah, we started this thing six and a half years ago.
0:58
There's still a lot of work to do.
1:00
>> Yeah, I remember because uh you may not remember this, but we were on a phone call and I was like, hey, this is a great idea. I'd love to invest.
1:04
And you were like, I don't know, we got like kind of it's already full and I was like, oh, but I'm such a great guy.
1:09
And then you were like, we'll see. And I didn't follow up.
1:14
And uh that not following up cost me cost me dearly.
1:15
I I actually do remember. >> Say more.
1:21
>> I wrote it down in my diary that day.
1:23
>> Grant, what happened from your perspective? >> Yeah.
1:25
Yeah, you tell the story. >> Yeah. So, um what happened?
1:26
I mean, when whenever you're like one of the like we've we've had rounds where we've been a hot company and we've had rounds where we've not been a hot company.
1:34
Sort of like seeing this the full spectrum of things.
1:37
And once the rounds closed, all we really want to do is go back to work.
1:42
So, I remember talking uh to Sean and um you know, I'm like, "Oh, I should probably follow up with him."
1:46
And then I just got busy with work and didn't.
1:48
And I think I I like in my head I sort of felt bad cuz I think I should have done something, but I don't know.
1:56
>> Well, listen, I've been a fan. I was a fan before. I'm still a fan now.
1:58
Now I'm just a bitter fan.
2:00
Uh which is is a unique place to be in.
2:02
And we should explain what the company is, right?
2:03
You you're the founder of whatnot.
2:04
What's amazing is you've built a large company in a space that I think most people would have found very small and unusual unusual.
2:13
It's almost like a stack of unusual behaviors.
2:15
We'll just give a kind of quick summary which is if you open up what not today the app you will see people selling all kinds of things.
2:24
It started off with collectibles and you know like these little Funko Funko dolls and then opening up packs of cards and stuff like that.
2:31
But now you could buy anything.
2:33
I Sam I don't know if you know this.
2:34
you could buy crazy on whatnot.
2:36
I bought a crab this morning.
2:38
It was like a fisherman fishing and he's like, I got these crabs.
2:41
And he's like, you can buy this crab right now. I bought a crab. He's like, great.
2:46
It's going to be sent in the mail to you. Congratulations, Sean.
2:49
And there's a crab coming my way now.
2:51
And that's I don't know what just happened, but I have a crab coming in the mail.
2:56
>> The seafood's incredibly good, to be honest. Like, I actually eat it.
2:58
I eat it like very regularly. It's my favorite.
3:01
Uh, >> it better be because I'm telling my wife I bought internet crab and uh I don't know if she wants that to be in the house, but I I got internet crabs coming my way.
3:09
>> You saw where it came from.
3:09
You don't know what you're getting if you go to the supermarket. >> That's true.
3:13
>> That bad thing came off the boat.
3:14
>> The person who was doing it, their profile shows like how many they've sold and it says 3,300.
3:18
Her her username, shout out to I Love Crabs. Um, so I love crabs. She sold 3,300.
3:26
Yeah, this crab pack I bought when it was $34.
3:28
She's made over 100 grand selling crabs on the internet.
3:30
Like, this is unbelievable. >> Yeah.
3:33
Last week I had a full crab boil um brought to you by whatnot.
3:38
>> I can't tell if Tim is dumbfounded or his internet connection has dropped.
3:41
He's made the same face for the last 30 seconds.
3:43
>> I want crab, but I I don't understand how on earth you could start something like this because a marketplace like this seems like probably the hardest business to start.
3:51
I think marketplaces are probably the most durable and also the most challenging.
3:54
And when Sean originally told me this idea, it might have been 4 years ago.
4:00
You might have been 2 years in, I'm like, "Yeah, that sounds cool, but these are impossible."
4:06
How did you get your first, let's say, 1,000 sellers to even use the thing?
4:09
Cuz I'd imagine that's harder. Sellers, not buyers. >> Yeah.
4:15
I mean, in the early days, it was all sort of hard.
4:17
I think for us, the reason we did it is because me and Logan who started it, we'd only ever spent our careers in consumer internet and working on two-sided platforms and marketplaces.
4:30
So, and the idea of starting a B2B business sounded way more painful than starting like a consumer marketplace to us just because of what we knew.
4:36
When we when we first got started, we didn't even have the the live component.
4:39
And so, we had to get like immensely creative.
4:43
And so initially we had a value prop of we'd authenticate whatever was sold.
4:49
>> Can you do it like a movie scene?
4:49
So you and Logan, you're sitting somewhere, you have an idea. Who says the idea? Where are you? What what happened?
4:55
And then how long from there did the first go live?
4:59
>> So there's there's sort of like two founding stories depending on if you talk to Logan or you talk to me.
5:02
They're both both technically true.
5:03
So, I'll go back to the first one because Logan will be annoyed if I don't tell it, which is Logan and I are in Japan uh over like the holidays and we were both sort of fed up with our jobs and we both we both built companies before so we we we prefer to sort of like focus on building things and we're drinking in a bar in Tokyo.
5:23
We're like let's start a business and we bought like 50 domains and we knew we're going to we're like let's start marketplace business and we bought all these like random domains.
5:30
>> Did you have an idea or just straight to the domain?
5:32
you know, it's you're drinking at a bar.
5:34
And so it's like one of our initial ideas, which we did actually sort of do for a couple weeks, was we'll build like a better full service Craigslist, which is horrific business idea, by the way.
5:45
Um, but that's what we we initially started with.
5:48
>> That's like in the uh in like the starter pack of entrepreneurs, >> like Craigslist is so ugly. I could do better. >> Yeah.
5:54
The the unit economics just don't make any sense, right?
5:56
And so you're selling all these used goods that are basically worth nothing, but you need to be able to, you know, spend a bunch of money in order to make the user experience of Craigslist better.
6:06
Like be able to do so, so sort of like I'll give you an example.
6:10
I've talked to hundreds of entrepreneurs on this podcast and I've got a bunch of takeaways, but one of the big ones, one of them that shocks a lot of the people out there who are product nerds, which frankly I am myself, is that often times in order to turn something that's going kind of good into something that's absolutely amazing, is to fix the marketing, not the product.
6:29
And in particular, fix how many people know about the product.
6:33
That's like the big thing. It's called attention.
6:35
Say it with me, attention.
6:37
And so this team at Starter Story, they put together a free guide.
6:39
They call it the $1 million attention guide.
6:41
It's this pretty amazing 39page document that's filled with 15 tactics to get eyeballs on what you are building.
6:48
And so there's a even a 30 minute recording from Pat who's the founder of Starter Store.
6:54
He has interviewed hundreds and hundreds of entrepreneurs.
6:55
So he's able to put this together, do a bunch of research and experience.
6:58
And so if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here.
7:09
You know, we're in Tokyo. We buy these domains.
7:11
Some of the domains are like random domains we're going to use to like SEO hack like used Pelaton and I, you know, you you name it.
7:17
Like we had like 50 domains.
7:19
We were sort of growth hacking our way into the the business even that at that stage.
7:22
So anyways, then it comes to sort of like fall of uh 2019 and we we're sort of like all right, we're going to make the plunge.
7:31
Logan Logan left his job, started to work on on what became whatnot.
7:33
And the the early division of labor was sort of like Logan's going to build it and then I'm going to like do everything else.
7:41
And so like all right, we're on the full service Craigslist.
7:42
And one of the bits of full service Craigslist was going to be like we're going to be able to do deliveries.
7:47
And so I'm like, "All right, let's go figure out I I did like the envelope on, you know, on an app and be like, "Yeah, yeah, maybe there there."
7:54
And then I start calling all the delivery companies.
7:55
So I go on LinkedIn and I LinkedIn all these people who um run delivery businesses, like the guy who runs delivery at Bob's Discount Furniture, the guy who runs delivery at like all these other companies and I they take calls with me.
8:07
I'm like, "How much does a delivery cost at scale?"
8:08
And so like, "How much is each leg and how efficient is it?"
8:13
And they were nice enough.
8:14
enough. they they sort of told me and with after doing two of those calls like this this just doesn't work like the cost per delivery relative to the value added on the used item is just there's no margin there for the business then like oh need to find something else to do and at that point in time it was Logan we brought on um an engineer
8:34
already and then we had half a designer so the team list was sort of like three and a half people can >> can you give a little perspective to your financial situation because we have a lot of entrepreneurs who listen but we have a lot of people want to start so like how you're talking about hiring uh people already. Did you have funding or
8:46
Did you have funding or did you just have like $100,000 saved up?
8:50
What was your financial situation to do that?
8:53
>> Yeah, probably I don't know 100 $200,000 in the bank. >> Okay.
8:56
>> Um not including my 401k.
8:59
>> Did you wire that over to the company and you're like, "All right, now we have $200,000.
9:02
That's what we could hire with."
9:04
>> Check by check, you know, you just sort of go like, "I the the the implicit agreement was I'd be willing to spend up to that amount of money doing the business uh before we raise money."
9:11
And so like what we did early on, so our first engineer was actually based in Brazil.
9:17
It was a guy that Logan used to work with and had known really well who was who's like super talented, but you know, he's in Brazil and so it's it's it's much more cost-effective there.
9:29
He's kind of difficult to work with.
9:29
So he's, you know, he's like really talented, but really challenging to work with.
9:34
So you can get him on the cheap and then you give him some good equity.
9:37
And then the designer, we just gave him equity.
9:38
We were like, "Do the branding, do all of our designs, we'll give you equity in the business," which obviously has has turned out well for for both of those folks.
9:46
And so, yeah, we're we're sort of doing that 24 hours into like doing diligence on delivery costs.
9:53
Like, oh we have to change this business.
9:57
And by the way, they're building it.
9:58
So, we we have um even to this day, we we try and have an immense bias to action because you just learn things by doing things.
10:05
So even if you're wrong, as long as you're willing to admit you're wrong and then change direction, it's totally fine.
10:09
So Logan and Gustavo were building the back end like the order system and some of the front end and uh go everyone, hey everyone, I don't think this idea is going to work.
10:20
I'm going to try and find something else. We're like, it's okay.
10:23
We can we got to build a payment system anyway, so as long as we're doing a marketplace, we'll keep building.
10:26
She like, all right, yeah, we'll still do that.
10:29
And then I was just going around the internet looking for other marketplaces that I thought were really broken.
10:33
And I kept coming back to uh eBay, which is, you know, back in the day I used to sell on Yahoo auctions in eBay.
10:39
It was like prepayment processing online. It was Pokemon cards.
10:41
And um >> you recognize this bad boy.
10:46
>> I don't know if you can see it. >> Is that the Ch?
10:47
Is that the holographic chy? >> Holographic chansy.
10:51
>> This is your >> You guys did your diligence.
10:53
>> I bought this off 20 years ago. Our paths crossed.
10:57
>> I bought this for $10.
10:59
>> Yeah, I I remember that $10 money order.
11:02
Um definitely one of those like uh making money as a first time when you're a kid and like something special about that. Yeah.
11:09
>> So I kept on you know going through marketplaces and what going back to eBay and then like everything that was trending on eBay was collectibles and I could see all my friends were getting back into collectibles and then me and Logan start making trips to all of the comic book shops in LA and they're like packed.
11:25
They're full of Funko Pops.
11:25
And so I go, "Everyone, I got this amazing idea.
11:31
We're going to go and change and build a collectibles marketplace and let's focus on Funko Pops."
11:36
And here's all of the reasons.
11:38
Well, what what were the reasons?
11:40
Because the way that you're describing this is very unsophisticated.
11:44
And maybe it was at that unsophisticated because like if a normal person, they'd be like, "Well, eBay seems like they're doing collectibles pretty good."
11:51
Uh like a marketplace is, I would imagine, all about liquidity, meaning the perfect amount of buyers and sellers.
11:57
amount of buyers and sellers. and there's stuff there and so like what was the metric or the signal where you said this is actually attainable or was it just I want to build a business this might work let's just see what happens it was probably a little bit of both um the initial sort of data or research we
12:17
used to inform it was at that point in time you could pull the sales by every single category on eBay there was a tool I think it was called Terrapake and uh we we went across every single collectibles category and plotted the sales and collectibles through time and how it was growing and and every one of these categories was like going gang busters. So there's clearly a a broader
12:36
So there's clearly a a broader trend happening in the market and when you looked at it then there were more Funkos being sold on eBay than comic books which is one of the reasons we ended up choosing comics or sorry Funkos over you know say comics or a bunch of the other categories.
12:51
It was between Funko and Pokemon were the first two categories. There's demand.
12:53
People want to buy used Funkos.
12:57
>> Yeah, there's there's huge demand.
12:57
And then the the the sort of taste element of it was we just felt like the product hadn't changed in 20 years materially and it felt like it should.
13:09
And when we thought there was something around social, we didn't really know what it was, but we just sort of felt there was a with a with sort of this broader trend in collectibles, which which was really driven by people our age who had money getting back into things that were nostalgic from childhood, and the fact that there just hadn't been a lot of innovation in the space that probably should have had more innovation.
13:31
And we could we could sort of squint and imagine there's a much better social experience around this where you discover new things where you chat with people that who are into the same things as you.
13:41
And then yeah, we just took a a leap of faith.
13:43
When we started the company, one of the things we always said is we're not a sort of vision driven company.
13:49
We're a userdriven company.
13:50
So we were never beholdened to like our idea needing to be like the idea.
13:54
We were always going to try the thing, make sure um we were building a great user experience, and if users didn't love it, we were always willing to just change.
14:04
>> Why do you think that's important?
14:05
Because I think, you know, the media, movies, TV, magazines, they they love the visionary founder, the one who saw it before anybody else.
14:11
And it's sexy as the founder.
14:13
You also want to be the visionary founder.
14:14
And the most iconic founders, you know, Steve Jobs was, you know, I would say that was like the attribute that was associated with him was this sort of like taste.
14:22
You know, people don't know what they want, but I will see what they want. I I know what I'll do.
14:27
I'll put a thousand songs in their pocket. That sort of thing.
14:29
Why do you think it's important to kind of highlight the other way?
14:32
the when we said we were sort of a customer-driven versus vision driven company, it didn't mean that we we didn't think there was wasn't any value in having an idea for how you want to build the future.
14:44
You have to know which direction you're heading in.
14:46
It was more of this idea though that no matter what it starts and begins with the customer.
14:51
If you have this amazing idea for something and customers do not want that, you're dead to rights.
14:57
And so if you're thinking about um you know stack ranking these things in terms of like what what matters and what is of greater importance of course it's the customer no matter how great your your vision is.
15:10
And I think as a you know one one of my lessons that's been even more solidified from one running whatnot is stories are sort of BS.
15:19
You know, a lot of stories in terms of like business are are really a mechanism to convince people to follow you versus something of like real substance.
15:31
Like the things that matter actually have much much much more depth to them.
15:35
And so I think the you know the visionary founder just sounds good.
15:38
>> What would be an example of a kind of popular myth but the the actual substance is something different.
15:42
What would be an example?
15:45
I'll give you some in the context of what not were things that just like in the early days sort of feel better but actually if you you dissect these things um they sort of work in a different way.
15:56
So one of the things like really early on with whatnot was investors were very nervous to invest in a Funko Pop company.
16:03
company. So there was a point in time when we launched our first live auctions product and you know we're growing like 100% month overmonth and we talked to a lot of the you know the well-known investors and they're like Funkos I don't know about that that's a small market you know investors want to invest in these big giant markets and look at
16:23
how big Apple is and Google is but the reality is when you dissect history all of those companies started in an incredibly small area and almost Every great company starts an incredibly niche or small area and then takes that and and catapults it forward because if you're a four-person company like we were in the early days, you can't compete in a mass market. It's it's
16:43
It's it's almost impossible to drive um a ton of consumer value in a mass market.
16:48
So in instead what you have to do is you have to compete in a small market, build a really great user experience for a smaller subset of people and then expand out.
16:55
>> Isn't that how eBay also started?
16:55
>> Isn't that how eBay also started? like wasn't the first thing like a PEZ to sensor but then wasn't it like weren't they also very niche at the beginning >> they were they were incredibly niche I think that the real story from what I've gathered from folks so there's two there's two founding stories there too one at one is is allegedly made up for PR which was the Pez dispenser one the
17:14
real one was like the first item sold on eBay was a broken laser pointer sold to a broken laser pointer collector and and the PR just didn't want eBay to be known for like broken junk um and and so you know told the PEZ dispenser story, but yeah, if you sort of like there's a lot of these things that like at for surface value a thing sounds good, but actually there's a lot of specificity to doing it right. So, don't go after big markets.
17:37
So, don't go after big markets.
17:40
Don't hire big fancy executives.
17:40
Don't necessarily hire people because they've worked at big fancy companies.
17:44
There's all these things that sort of at surface level sound good, which which are actually largely incorrect.
17:52
>> Uh the PayPal story is kind of like this, right?
17:54
So, you have Elon has this vision for X.
17:56
And he's like, "It's going to do everything a bank does on the internet.
18:00
It's going to be uh, you know, uh, lending.
18:02
It's going to be mortgages.
18:04
It's going to be checking accounts, savings accounts."
18:05
And that's what the vision was for that.
18:06
And then here was PayPal, this little tool for eBay sellers, you know, it's like this kind of the niche within the niche.
18:13
And he kind of resisted it actually for a little while.
18:17
And then they finally kind of gave in was like, well, that's what the users that's where the demand is.
18:21
That's what the users want this for.
18:21
And like of course now PayPal can do a lot more than it did when it started, but it went after that very small market initially and finally rejected the founder vision idea uh going in.
18:31
Um there's always exceptions to the rule.
18:36
So I I never say, you know, definitively that's the way to do it.
18:39
But I can tell you in that every consumer success case that I'm aware of, um the the pathway looked like that.
18:46
>> I'm looking at the uh March 2020 web archive.
18:49
I think how how into the company are you in March 2020?
18:55
>> Uh it's like four months in. >> Okay.
18:57
I'm looking at the website on web archive. Looks pretty good.
18:59
It says uh browse fandoms.
19:01
So I guess that means like different niches of Funkos.
19:04
So you can look at sports Star Wars Star Wars Rick and Morty.
19:09
And if you click on it, uh I'm not sure if it will show you, but it looks like you have sellers on there.
19:15
You're only four or five months in, but it looks like a lot of sellers sellers are on there actually.
19:19
And it even has staff picks.
19:20
Like you guys are curating some cool ones.
19:22
How many sellers were actually on there and how did you convince them?
19:26
And also feel free to admit if there's any black hat tactics there.
19:32
There's a statue of limitations. >> Yeah. >> Yeah. Yeah.
19:36
>> There's uh yeah, there's some um unique tactics at play.
19:39
Um I think by by March 2020, we probably did have in the hundreds or maybe maybe a thousand sellers at that point.
19:45
So the way we got things going is so classically with a marketplace you have a chicken and egg problem.
19:52
How do you get sellers if you don't have buyers?
19:53
How do you get buyers if you don't have sellers?
19:54
So the way you solve that is you solve for one side of the equation.
19:57
And so we were initially the the the seller on whatnot.
20:04
And so all of the early inventory was was us.
20:07
Now obviously we can't own 28,000 Funkos.
20:11
So what we did is we would go and authenticate them and by doing that that gave us additional value to add to the customer and then we would when someone would purchase them we'd go and buy it from a number like a hundred different stores online.
20:25
I had like a team of people in Brazil who would help me hunt down the right Funko Pops. >> Oh.
20:31
So you they they didn't exist then.
20:34
It was just photos of them and you're like but I'll I'll go out and find them and uh I'll I'll buy them. >> Yeah.
20:39
I mean, it was it was a little more, you know, there's a little bit more to it than that.
20:42
So, one of the things that we did, I don't know, there's like 100,000 Funko Pops out there.
20:48
There's like an obscene number of Funko Pops.
20:49
And so, you do have to be able to secure them and secure them at a reasonable price and be able to price them at a reasonable price.
20:54
And so, we ended up having to build like a pricing algorithm.
20:59
basically scraped all of the sites that had various Funko Pops and then looked at the amount of liquidity in each version of the Funko Pop and based upon like we'd sort of set a liquidity floor because if that thing had like one liquidity, you know, one sold over a 90-day period, you're never going to be able to secure it.
21:16
I forget what the liquidity floor was now, but let's just say you had to sell 10 over a a 30-day period.
21:22
We'd use the past 10 sales plus the amount of liquidity per item to then be able to price it at a reasonable price such that we could then go and resell it authenticated and then make sure we could actually secure it um from one of the sites.
21:41
>> And then did you buy Google ads for the buyer?
21:44
Were you buying Google ads or posting on Reddit or something to get the the buyers?
21:49
>> There there was two two tactics um that we initially used.
21:51
So tactic number one was we partnered with a bunch of the Funko Pop influencers on YouTube.
21:56
So you know I can remember in December calling up every Funko Pop influencer and they're like, "Who is this company? I don't trust you."
22:04
I found someone that I knew from prior world to to work with.
22:09
And that was sort of the starting place.
22:12
So that was tactic number one.
22:12
Then tactic number two was we built this sort of um viral Funko Pop giveaway mechanic in the app.
22:20
So, if you're into collecting anything, the thing that you most want to collect are like the Grails or the Chases.
22:25
So, if you're into sports card, maybe maybe that's um you know, rookie tops chrome, LeBron.
22:30
If you're into Funko, maybe that's like the Tony the Tiger flocked Funko Pop.
22:34
And what we would do is once a week we'd give away like a $500, $1,000 Funko Pop.
22:40
And in order to be able to enter, you would have to share.
22:47
and and we sort of built these mechanics where you could sort of have like unlimited sharing.
22:51
So someone could sign up with your referral link, someone could sign up with your code.
22:55
Um you could share it on Twitter, you could share it on Instagram, and each time someone used your link or your code, they would get an extra ticket in the raffle.
23:06
So it gave this like it sort of um encouraged everyone who wanted to win it to share it with everyone that they knew and keep on sharing it, >> right?
23:15
And so we basically took over all the Funko Pop subreddits, Facebook groups, uh, etc.
23:23
because every we were giving away the best stuff.
23:25
This is basically stuff like this is gritty internet entrepreneurship stuff that everyone Sean and me, everyone listening who's has an internet business, everyone has done something where it's like, uh, we're just going to like do this and do this.
23:40
And maybe I won't want to tell everyone like 10 years looking back.
23:41
So, it's really cool to see that.
23:43
That was only six years ago.
23:44
Now you're worth20 billion dollars. >> It even extends.
23:47
We had Mike Pner, the music artist who did I took a pill in a visa on and he's he, you know, I think a lot of people didn't even listen to the episode cuz it's like, oh, it's like a musical artist on our business show, but he had this amazing story that was just like any other entrepreneur where he was in college when he was trying to be an artist.
24:02
So, he realized he could post onto he wanted to be on on the top of the charts of iTunes, but that's where like, you know, Jay-Z and Rihanna, whoever were at the top.
24:10
He realized iTunes had a iTunes U section for like college lectures. So, but he's a student.
24:16
So, he called the guy, he hustled find the guy who like controls that board.
24:20
He's like, "I'm a student.
24:21
Can I upload audio to that?"
24:21
And he became the number one on iTunes U.
24:24
Then he emailed all these campuses being like, "I'm number one on iTunes."
24:28
You, you know, people didn't people didn't realize the distinction.
24:32
He got booked for for gigs.
24:34
And then he had all his friends at other colleges and in in fraternities. He was in a fraternity. He said, "Great.
24:39
Everyone in the this same fraternity in every college on this day change your profile picture to this picture just to create some myster like what is that?"
24:46
And then people went and hunted down that oh it's about this album release and that was the start of his music career.
24:51
He growth hacked his way to success there too.
24:53
And I love these stories as a founder like you know uh the front door is not the not always the only way in. Yeah.
25:00
My my theory has always been the same, which is if you try and copy the obvious pathways, you're basically going to get stonewalled because you don't have the resources.
25:11
In the early days, everyone wants to spend a ton of money on paid ads.
25:16
You know, we spent virtually no money on paid ads in the early days.
25:18
It was never going to be an effective acquisition channel for us.
25:21
We spend an obscene amount of money on paid ads today. >> Yeah.
25:26
>> But you have to get your way there and and each step of the way, you know, sort of unlocks new and interesting things.
25:30
But I do think in the early days you have to find unique advantages that um other people aren't going to be able to leverage.
25:37
>> Do you remember when you first started doing the Grails giveaway?
25:38
Cuz you know some part of you has got to be nervous.
25:42
You're giving away things that are worth thousands of dollars. Did it work right away?
25:45
Did it take uh you know a few tries?
25:47
I guess do you remember the math the first time it worked?
25:49
Were you like, "Holy we just this is like 10 cents a user or whatever."
25:52
You know, like could you take us back? >> Yeah, I do remember.
25:55
The first the first one was definitely a flop.
25:56
So, we give away this like $500 item and I think 104 people there were 104 entries total in the raffle, you know, maybe that's like 30 or 40 accounts or something like that and no one purchased anything. You're like, uhoh.
26:10
And we didn't we we had like, you know, no money for the business back then.
26:13
It was like all coming out of my bank account.
26:15
So, like, oh, this is painful. And I'm not working.
26:18
So, like, you know, the bank account's dwindling at that point. Yeah.
26:22
I think there's there's always just a sweet spot between when do you know a thing's actually when have you proven a thing wrong that it's not going to work and when have you given it enough legs to make it work.
26:32
And so for us it was like okay well now we have all those accounts who joined and we can send a push notification and when we do the next one and then the next one they're going to be encouraged to share out to more people and so if we can see that in the next one we can go from like 100 to 300 maybe there's a pathway there.
26:48
And so I think I I forget what the the the second one is.
26:53
250 sort of rings to mind.
26:56
So maybe it wasn't exactly 3x, but it was 2 and a halfx.
26:57
And so you started to get this like exponential on it.
26:59
And then you can sort of make the math work.
27:03
>> Was the number of sellers like the metric where you're like we need more sellers, more sellers, more sellers.
27:07
>> Well, back then um it was just us as the seller.
27:10
And what we were trying to do is we were trying to build the buyer base because we couldn't add any seller other than us because no one was going to purchase anything uh from any of the new sellers and they weren't going to stick around.
27:22
And so the early days were about was about getting enough demand on the platform such that we could open up selling.
27:30
And so I think we you know we we launched the platform I think December 2019 was when we launched our app.
27:36
And then we didn't open it up to our first seller until I think towards the end of February was when we started to have enough demand in the marketplace.
27:46
And even then we we did another hack which was anytime a seller would come on whatnot they'd get our audience and then we figured out a way to crosslist it across other marketplaces using our whatnot account. >> Gotcha. Yeah.
28:00
>> And so >> which is like another classic thing, right? That's what Airbnb did.
28:02
That's what a lot of people did.
28:04
That's what I did when I had a miniature marketplace. You post on Craigslist. >> Yeah.
28:08
And so between our demand plus the demand for other marketplaces, we got to a place where we were able to uh retain sellers and then slowly get that flywheel spinning.
28:17
>> And it probably didn't take a lot.
28:17
It's probably like if you just get a sale within the first x hours or days, you'll stick around.
28:23
Is it Did you find some metric like that?
28:26
>> I I think our data was too sparse and we were just like, I don't know.
28:29
Let's just try and get them as many sales as we can such that people stick around.
28:32
It took us a long time to get the precision around the metrics that mattered and retained and kept people coming back.
28:38
We definitely weren't that sophisticated back then.
28:42
>> How many transactions happened in the first 12 months?
28:44
Uh, and did that account for any meaningful revenue to you guys at all?
28:49
So sort of the the the journey for us was December 2019 we started it and I bet you we did 30 sales, you know, like pretty pretty grim numbers.
29:05
>> 30 in the first month. >> 30 30 sales. Yeah. 30.
29:07
>> That's pretty exciting. What a day. That's exciting. >> Yeah.
29:09
But mo so most so the way it actually went was the first first week of December which was the first time we were all full-time on what uh was like one sale and the second week of December was one sale and then I managed to like work with a Funko Pop influencer the third week of December and then we got like 30 sales something something like that and a bunch of them we priced incorrectly.
29:29
So there's like a bunch of the sales were people finding mispricings in our algorithm and taking us to cleaners. >> A bounty hunter. >> Yeah.
29:37
It was it was like selling a $500 Funko Pop for 150 bucks because the liquidity bit of the equation wasn't very good.
29:44
So that that was that was December.
29:46
And then we in July of 2020 is when we launched our first version of Alive and and that's when the business really started.
29:58
>> Where did that insight come from?
29:59
Because it sounds like the insight for Funko came from looking at data and trends on eBay.
30:03
Where did the the second big insight which was live selling? Where'd that come from?
30:08
>> So we when we first started the business uh in January went through Y cominator.
30:12
So we originally we were in LA and went up to San Francisco to go to Y cominator and we thought we were doing well.
30:19
The business was growing etc.
30:21
And then we went to fund raise in the middle of co as a Funko Pop marketplace and like everyone hated our business.
30:28
By the way, why did YC bet on you?
30:31
like god damn YC is good that they bet on you guys when nobody else would one month into a Funko Pop marketplace.
30:38
What the hell did they see?
30:40
They were they were very smart to be honest.
30:42
Um and they bet on us many times throughout our journey.
30:46
Like when the business started to take off, they were like tremendously helpful and helped put in more money into the business ahead of when many of the other investors who you would know their names um were passing.
30:56
The thing we were really good at and are are still pretty good at is we're we have pretty good taste and we know how to execute.
31:04
Um, and so if ever we said we were going to do a thing, we did the thing.
31:12
>> But that first YC interview is 15 minutes.
31:13
What could you have shown them in that first 15 minutes? >> I don't know. That is flip a coin.
31:16
You know, we we we we had pretty good backgrounds relative to like what we were doing. I see.
31:23
>> Wait, that's a funny line.
31:23
We had good back backgrounds relative meaning like there's no way someone this smart is working on something so silly. Surely that's a sign.
31:33
>> Uh well I guess like Logan um was like running or running engineering at like pretty large resale marketplaces.
31:40
Um I worked at Facebook, I worked at YouTube.
31:45
So like you know we I started a company before got aqua hired.
31:48
We weren't like hugely known commodities but clearly had a background for doing things.
31:53
We built our product for the YC interview in like a week.
31:58
Like we built it and launched it and pushed it live so that we had something and could like talk about real stuff that we had done.
32:05
So yeah, we just went all in.
32:07
You want to hear read my uh hear my notes from that?
32:10
I I just found my my notes from when when I talked to Grant and I was looking at investing.
32:15
I by the way this is my this is my personal notes. No, no, no, no. Uh, no intent.
32:21
I go, looks like a soccer dad.
32:24
Quiet intensity, humble confidence.
32:24
He seems like a serious person who's actually doing this. I don't know.
32:28
Those were my those are my things that I wrote. I love the ending. I wrote winner energy. We should invest. >> Soccer dad, huh?
32:39
>> He only heard one thing.
32:39
I knew he would only hear the one thing. >> Get him, Grant.
32:42
Don't take that >> I I I like that.
32:44
But dude, here's what's the reason why I'm being kind of naggy about timelines is because you're describing being like, "My bank's dwindling.
32:55
I'm just trying to make this work.
32:57
We only got 30 transactions uh in the first month."
32:59
But what's insane is that I think it's something like 20 months later, you raised money at a billion dollar valuation. Is that right?
33:11
>> That's probably about right. Yeah.
33:11
So like the rate of the rate of growth is is astounding here.
33:17
Do you remember how much funding did you raise and how many employees did you have at the time?
33:22
>> So we came out of YC, we raised probably $250,000 out of YC.
33:25
Um maybe a little bit less.
33:28
It was a bunch of people who knew me and felt bad for me and like maybe they were like scout checks and some stuff like that.
33:35
So, uh, you know, I think we had a few hundred,000 in the bank and we were at that point, we we brought in one more engineer and then before our seed round, we probably got to like six and a half folks.
33:50
So March when we came out of YC, we did probably 20 to $25,000 in sales total total transaction volume.
33:58
Then we did our seed round in I want to say like August or September.
34:04
That was sort of like the business started to inflect when we we launched live like growth went to like 100 plus% month over month and probably in September we did 250 to 300,000 in sales >> gross gross volume.
34:20
>> Yeah, our take's probably like 10% of that.
34:22
Then you know continued to inflect up by December of 2020 we sort of ended the year at $2.
34:30
3 million in total sales.
34:35
And the number of employees in the business would have been I think about 17 or 18.
34:45
Then we closed the following year at um 168 million >> 2 million to 100 100 million plus >> 163 million and we would have closed that year at about 100 employees.
34:58
So 10x employees too and then so >> um the following year we did a billion in sales. >> What happened?
35:09
How did you go from 2 million to 163 163 to a billion? What happened?
35:15
>> The core live experience we built is really fun and it and on the seller side uh you know transformational for business building.
35:25
for business building. And so if you're a seller, what was happening to you was you were very quickly starting on whatnot and and again it's not for everyone but for you know a lot of the people who invested deeply and and and and tried to build a really large business um whatnot was a bigger
35:43
channel than anything else you had done and and that that was also a time like this is during co and so you'd have people like hey I had a comic book shop and people stopped coming in now I'm on whatnot and my comic book shop is doing more sales on whatnot than it ever did in a physical brick-andmortar shop. I'm closing down
35:58
I'm closing down my brick-andmortar shop.
36:00
You had the co forces everything online, but then you had the benefit of if I'm a if I'm selling a niche thing, I'm going to find more buyers when I use the the sea of the internet versus just whoever's in a 5 mile radius, 10 mile radius of wherever my shop is.
36:15
That helped for sure in that first year.
36:17
Yeah, I mean CO definitely helped, but you know, our business has continued to do, you know, incredibly well throughout CO.
36:25
So I think anyways, the core value was there and then I think we we had a really good team.
36:30
So like the first 30 people we hired at whatnot are lights out good and we knew we figured out how to like the big unlock was sort of how to how do you launch multiple categories and what is the mechanism for doing that fast?
36:47
And as you start to launch multiple categories on marketplace, people in each one of those categories start to cross-pollinate and everything that you had working in one category sort of compounds across all the categories.
36:57
>> What did you have to change about your personality to grow?
36:59
Because you went from being a very scrappy guy doing everything to being the CEO of a company that's worth a billion plus dollars.
37:11
what had to that you've just compressed a lot of personal growth in a very short amount of time.
37:16
amount of time. I'd imagine I >> I think probably people overemphasize the like um I need to change because I'm a leader of a large organization because I think they look at certain models of what su success looks like at really
37:32
large companies and those are sort of like stoic slightly stilted people who operate in a corporate manner and you know there there are definitely things that you have to learn and adjust as you go but I would say I actually just generally try and be me. And you know
37:45
And you know the nuances to that of course though are and by the way I had to learn this.
37:51
I I thought I would have to change more.
37:53
Like I think one of one of the mistakes we made early on in the business was just trying to be you know too corporate for lack of a better word which is like hire some executives from well-known companies, hire people from well-known companies.
38:06
And it's sort of like one of those things where the story sounds good, but the reality is is often um you know a lot different because you you'd sort of go like, oh, you ran such and such at this big company, you must know what you're doing.
38:18
And that's actually turns out to be like broadly incorrect.
38:23
Like no, someone needs to know and be able to sort of articulate in specific detail what what they're doing and how they're doing it.
38:29
So, one of one of the biggest lessons that I've learned through the the history of of whatnot is to just be really maniacally focused on what the problems and opportunities are and don't let anyone necessarily tell me what the right pathway is into those problems because running whatnot.
38:44
I I tend to have a much and my team has a much better grasp of what the nuance and context around those things is.
38:51
So be focused on what we're trying to achieve and then be really really nimble around how to achieve it as long as we know the details around it. Okay.
39:00
Now back to your question what do I have to learn and change?
39:03
So one was actually not to change too much because actually we're pretty good at what we do.
39:07
There's a re you know again we got really lucky but you know there's also a reason we were able to take advantage of the luck.
39:12
able to take advantage of the luck. Then the things that I had to personally adjust is you know the company's 1400 people today as an example and you do need really good systems and process to run a company at this scale and so you have to learn how to like you know one of the products you end up building is you I call it my operating system how do
39:30
I run the company to make sure that we're moving in the right direction we're making good decisions and we're executing at really fast pace so I had to learn how to like construct an operating rhythm across the business there were certain points in time in the business where the accountability wasn't high enough, growth drifted, people's focus drifted, and we had to like fix that. We're a pretty straightforward
39:49
We're a pretty straightforward group of people.
39:51
Um, we always have been like if you went into the early slack of whatnot, when someone did bad work, we like you did bad work, this is bad, let's fix it.
39:59
And a as you get bigger, the PE, you know, fortunate people whatnot, there's a bunch of people who sort of like know me as like the person on Zoom they've seen in like a a team meeting and like a a title that would scare people.
40:13
And so I've had to soften my approach to try and get the best out of people.
40:17
And again, because I we always want to get the best out of people.
40:20
You want to get the best work.
40:21
You know, what would have worked in the early days be like, "Yo, this sucks. We got to do better.
40:26
Someone might cry today if I do that."
40:28
we don't want anyone to cry.
40:29
Um, and so you just sort of have to like know how to flex a little.
40:33
Again, you don't want to be dishonest and you don't want to be like this fake person, but you have to know how to flex to get the best out of people.
40:39
I think those are probably my my biggest things is just like be maniacally focused on the problem.
40:43
Be be conscious of the context and around how other people are going to view things and and adjust that to make sure you're getting the best out of people in the company.
40:56
There's so much corporate gobbledygook from people.
41:01
I think most of it's It's all about like what's your problem?
41:02
How do you solve your problem?
41:04
How do you do it in the best way?
41:06
>> You you we we've kind of coined this term.
41:08
We call it like a shock success.
41:10
Like if you read Warren Buffett's book, you learn that uh even though he has this attitude that he uh this image that he's like, "Oh, I just, you know, I just hold forever and I just buy good companies."
41:22
And you're like, "Oh, anyone can do And then you read about them and you're like, "Oh, well, you were a math prodigy at a very young age and you've been like you're just super high IQ and patient.
41:30
You have this beautiful temperament."
41:32
With you, you have that same thing where you sort of are like you kind of have this Canadian Midwestern energy where you're like, you know, we're just I think we just made decent decisions and we got a little bit lucky and then but the reality is is that there's like personality traits or something underneath there that is like world class and it's very clear you have that.
41:52
What would you say your reports would say or investors would say this guy's world class at blank?
41:58
>> I think one of the coming back to like my distaste in stories.
41:59
One of the one of the faults in human behavior is people tend to follow stories and they tend to follow other human beings.
42:06
One of the things that I consider myself lucky with is I've I've obviously learned a trend man over six and a half years but I I was put in this situation and there would be plenty of other people if they were put in the right set of situations would be able to learn.
42:18
So that's you know the luck element.
42:19
the things that I I think we're we're pretty good at are getting to the root.
42:24
So when you like what is actually happening here and how do we know?
42:30
So seeking the truth maybe is a as a as a simple form.
42:32
And so one of the things that always breaks at what not is our discovery systems.
42:37
As the company grows and grows and grows, you get more and more supply and and you're balancing all sorts of like competing objectives.
42:44
You got to make comic books succeed and you got to make women's fashion succeed and you got to make fresh food succeed and you got to make the UK succeed.
42:50
And we have this feed that recommends people all these things.
42:54
And our discovery team is very studious.
42:58
They'll go really deep in the data.
43:00
They'll AB test a bunch of things.
43:02
I'll see something a metric go down the business and I'm like, "This looks like a discovery problem. I've seen this before." I'll talk to the team.
43:07
The team like, "No, we tested it.
43:08
We know exactly what's happening."
43:10
I'm like, "No, how do you know exactly what's happening?
43:12
Walk me through every little thing in the system.
43:15
So what's happening to this seller?
43:17
Have you gone and looked at every individual seller?
43:19
How impressions have changed for that seller?
43:21
How that's happened across category?
43:22
How it's happened across country?
43:24
How many lost this much in impressions?
43:26
How many gained this many?
43:28
Because just cuz the AB test as an example.
43:30
So AB tests are notoriously bad on network systems.
43:32
So if you like AB test a thing, you change the feed um which means you change what users see and then people will all of a sudden start to go into different streams.
43:43
Now as they start to go into different streams, the sellers will behave in different ways which means you pollute both sides of your AB test. as an example.
43:50
You know, there's a example where we start going through all this and you know, we we sort of get to the bottom.
43:57
We dissect every bit of bit of seller behavior and like, okay, well, you know, maybe these sellers, their discovery changed a little bit, but these ones increased and increased engagement.
44:06
I'm like, well, I'm looking at the metrics.
44:07
The metrics say everything went down at a macro level, even if it's not in your AB test.
44:10
How do you actually know that?
44:12
Then we plot the elasticity curves of those sellers.
44:14
We actually see that there are certain parts of the platform where if you um even if you improve buyer engagement, if you take away certain impressions from certain sellers, their businesses shrink more than the engagement draw increases it.
44:28
And so you have to look at these things on much larger time horizons and in different ways.
44:31
And so you know the a classic way someone would approach that problem particularly like a lot of the ranking companies are like social media companies that look at near-term engagement.
44:40
And you go okay of course you're right. You've done this before.
44:44
you've worked at Facebook and Google and wherever and I would go like I don't think how do you actually know that everything's a little bit different.
44:50
Let's go all the way to the bottom and then we unearth like an incredible insight that will shape our discovery systems for the future.
44:56
So that would be like the example of like just going immensely deep into the problem.
44:59
immensely deep into the problem. I love how like two minutes ago you were like business is not that complicated and then you're like so we had you know our sellers in our fresh food departments and we plotted the elasticities curve you know it's like yeah yeah yeah super simple me and you we do the same thing
45:14
yeah it's great >> you sort of answered the question in a way where your answer is probably true you are world class at that but the real answer is the way that you answered it you're just I think you are very smart and more so your rate of learning seems very very very high Yeah, look, you you do have to learn fast. But even even
45:31
But even even what I just described to you, if you whittle it down to simple components, all all elasticity curves is is like what happens to a seller when you increase their viewership and then you decrease their viewership.
45:43
How much does their business grow?
45:45
And that's like, you know, if you're if you're running a platform where you have a feed and you're sort of directing traffic around things, it's probably a thing you should know.
45:53
And it's it's it sounds more complicated because use elasticity, but actually like how much do businesses grow and shrink subject to the number of buyers that you throw in their put in their feed.
46:00
One of the things that tends to happen, you know, we hire all these smart people in tech there's all these like smart people.
46:05
They went to like all these fancy schools and what have you and they like to be smart.
46:10
They like to sound smart.
46:12
So they use big words and and the big words will just like obscure a bunch of things.
46:15
And so of my job often times is to try and get to like the simple sets of truth around things.
46:21
What is a simple sets of things? What do we know? and how do we know it?
46:22
And so if you start to use a bunch of fancy words, I'm going to make you explain it to you like I'm in, you know, uh, in middle school.
46:30
And if you can't explain it to me like I'm in middle school, you probably actually don't know what you're talking about.
46:34
And I just will keep going and going and going and going and going until it can be explained. >> Uh, I love that.
46:38
I when I So we got acquired by Twitch and I got to be at Twitch for a couple two years.
46:42
Twitch for a couple two years. And uh you know I didn't I I probably learned uh many things some things not to do in a company some things you know to do but one of the most important to-dos was EMTT was like this he would sit in these meetings and some you know a team would come in and they would say something and
46:57
he would ask them this exact well what do you mean how do we know that what does that mean so no what what exactly did we do why why do we think that that was the right thing to do very simple questions questions you know at a second grade reading level and then the answer would come back at a PhD Then he would bring them back down. No, no, hold on,
47:14
No, no, hold on, hold on, hold on.
47:15
Let's walk me through this.
47:18
And then by the, you know, within 15 minutes, they've sort of been undressed.
47:21
You could realize they don't know what they themselves don't know what the hell they're talking about.
47:24
They weren't trying to mislead.
47:24
They just didn't really themselves get to the root of it.
47:26
Um, and everybody was taking things at face value and it was leading to bad decisions. I loved it.
47:30
I was like, "This is amazing.
47:33
This is like this is finally like, you know, the the best work is happening in those sessions."
47:38
Most people in the company hated it and they used to give them feedback all the time that this sort of Socratic method of of sort of debating almost like semantics and getting down to like the the base level of things like talking in binary basically. >> Yeah. I do that with my wife.
47:52
I'm like were you thinking of me when you made this meal because you know I don't like zucchini.
47:59
>> No, I just want to know.
48:02
Uh, but I anyways I loved it and I it almost gave me I I like that you said it here because when I saw him doing that it in a way gave me permission that like I didn't really fully do before that.
48:14
Meaning a I didn't want to be a jerk but b I didn't want to be an idiot.
48:16
I hired all these smart people.
48:18
They're telling me things that sound smart.
48:20
Maybe I shouldn't get caught up trying to like get to you know base level understanding of this myself.
48:25
And what I realized was no, no, no, that was actually a very good value uh virtue to have inside of a company.
48:32
And when people knew that, they showed up very differently to every meeting after the first few times that it happens. Yeah.
48:39
I think um one of the one of the things that we've tried to do here is we try really hard for the culture to be about getting to the right answer.
48:46
And so if we find people sort of recoil from that, we'll give them feedback.
48:54
And when I hire executives, they I will let them know upfront they're not beyond reproach.
49:01
They're their methods are at best sort of neutral when they come in.
49:07
And so we've we've sort of built this team now who likes that way of working, who's given permission to work and seek the truth and go to the bottom.
49:15
and go to the bottom. And I think that's been I think if you don't have probably both of those it doesn't work well now that is a challenge of or we're hiring I don't know we have like 500 people this year or something you know keeping up with that but if you look at like my team of people my team I've been working
49:31
with most of my team for four plus years now and then most of their teams are pretty similar and so you get like a really nice no this is how we do things here this isn't meant to be mean this isn't meant to like understand the truth because it's quite unnatural to be challenged at that level of detail. >> Hey, can I ask you about that challenge?
49:48
>> Hey, can I ask you about that challenge?
49:50
Because a I there's two phrases and words that I really dislike.
49:53
One is first principles and two is contrarian because typically the people who talk about that stuff are either kind of dumb or they're smart but they're an when they deliver it.
50:03
You seem smart and you seem like a pretty kind, likable guy.
50:08
Was there a person or a book or something that inspired you to be disagreeable but not rude?
50:15
Because it's quite challenging.
50:20
>> I think for for me what I always try to do is imagine myself in someone else's shoes and imagine when I had certain stuff like this, you know, happen to me and what would enable me to do my best work.
50:34
And I'm not saying I'm perfect at this.
50:35
There are definitely times where I am not as nice and where I will, you know, you know, sort of be at the end of my my level of patience.
50:42
I I try to make it few and far between, but it happens.
50:47
One of the examples that sticks with me for along for a while is and it's actually one of the reasons I ended up leaving Facebook.
50:53
I was in uh this big product review with a bunch of very well-known and very senior people and there was the thing I was bringing to a product review was was a project that I unfortunately got stuck on.
51:08
I did not want to work on and it was one of the most politicized projects across the entire business.
51:18
And you know, I put together this thing and I spent boatloads of time because all these freaking VPs would never agree with anyone.
51:25
It was just me running in circles like this.
51:27
And you get to the review and the guy who's running the review basically just starts yelling at everyone.
51:34
And I'm like, you know what?
51:34
I've been up the past couple weeks till past midnight and I work like hell on this.
51:38
And no matter who you gave this thing to, it was going to be a absolute cluster.
51:42
you know, now running my own large organization, I see what he did wrong.
51:47
I know what I would do differently, but the way that was handled was never going to make me want to do more great work.
51:53
And so I basically at the end of that, I was like, I'm out of here.
51:55
I'm not dealing with this.
51:57
And and so I just think about ultimately what you want to do is you want to get good work out of your organization.
52:02
And being mean, nasty, or combative will almost never do it.
52:08
I know that you don't uh you kind of said you don't like talking about numbers because you're like there's still a lot to do but of all the people who have done business which is like billions of people there's probably only like three or four or 500 who are worth over a billion dollars below the age of 40 and you're one of them I think according to Forbes you're worth like two or three billion dollars.
52:31
Surely there's been a moment where you're like this is pretty awesome.
52:32
Have you had a moment like that?
52:37
>> From from from time to time, it's it's nice to to reap some of the rewards of what's been built.
52:42
You know, it's really nice to be able to take care of my family and take care of my family properly.
52:46
And yeah, look, I'm it's it's not lost on me that that like in six and a half years, we've been able to build something, you know, pretty massive.
52:56
Millions of people build businesses or, you know, hundreds of thousands of people build businesses on whatnot, making billions of dollars, you know, 1,400 people at whatnot.
53:02
a lot of people have been there for the entire journey.
53:05
Um, so yeah, I think, you know, it feels good, but also I think we still have a lot that we want to do and and again, I I sort of, you know, you get a little I I don't want to get complacent.
53:14
And so from time to time, I'll have a you know, I'll reflect for about 5 minutes and be like, "Wow, this is pretty insane."
53:20
But then, you know, I'm I'm in my 30s still.
53:25
There's 1,400 people who came to work at whatnot that I have high accountability for.
53:28
raised a billion and a half dollars from investors who we have high accountability for.
53:31
And so, um, you know, it doesn't do me any good patting myself on the back.
53:38
That doesn't get me to the next step.
53:40
>> Sam, I'm going to start saying that I take care of my family.
53:42
I take care of my family properly.
53:46
I'll let you figure out what properly means.
53:48
I'm just going to start using that ever. I I enjoyed that one. That was good.
53:51
You said you had a good quote.
53:52
You said, "If you think you're moving fast, you're probably not."
53:54
What do you mean by that? >> Yeah.
53:57
Almost everyone who says they're moving fast is moving slow.
53:58
If I'm being honest, if you have to talk about it, you're moving too you're moving too slow.
54:02
If you even have time to think about it, you're moving too slow.
54:04
And and frankly, you can always move faster, >> right?
54:09
>> Hey, what's the weirdest trend of a thing that's that people are buying and selling on whatnot that an average person wouldn't even wouldn't even realize there's a craze going on or a behavior that that you've seen on there? >> Yeah.
54:22
I mean, probably the most popular thing this year, though the parents probably know about it, is like Neato and squishy toys.
54:27
I don't know if you guys have younger kids.
54:28
You know, you brought up some of the other ones I think are really fun, like just people selling crab and meat.
54:35
>> I think there's like people selling gold bars, aren't there?
54:36
Like miners selling bars. >> Yeah.
54:40
Bars of silver, bars of gold.
54:40
Um like who like from the mine?
54:44
Like who what's happening?
54:48
>> I mean, you know, huge range.
54:48
um could be anywhere from like a coin shop to you know there are there are like mints that like mint coins and >> basically sell cutting out the middleman and just selling direct on whatnot.
55:00
Is that the kind of the idea?
55:04
>> Uh yeah some some of them are.
55:06
>> Do you think there's an opportunity like you know with Twitch for example people built stream labs they built other like tools and and companies on top to service the ecosystem that you weren't that the platform wasn't going to build.
55:17
What do you think is is a kind of good tool or business that somebody could be doing on top of the the growth of whatnot?
55:24
>> Yeah, I mean I think so so stepping back like a macro level, I think you're going to see over the next decade that live commerce will be 30 plus% of all of e-commerce.
55:32
It means this is just like an absolutely enormous market. >> What is it today?
55:36
>> You take the top three biggest players in the market across like US and Europe, you're probably around 30 billion something something like that.
55:44
Sorry, but just to show the the percent you said it's going to be 30%, that means it's current it's currently at what like how much room do you think there is?
55:52
>> Single single digit percentages. >> Okay.
55:53
So it's going to 5x from here at least.
55:56
>> I I think 20 30x plus. >> Okay.
56:00
>> And the comp is sort of like what's happened in China and Asia.
56:02
So in Asia it's in China it's about 40% of e-commerce and and if you looked at you know the growth of whatnot the engagement of the platform sort of looked like it's headed that towards that direction.
56:13
And so, you know, that's that's a market in the hundreds and hundreds, if not, you know, a trillion dollars into the future if you go outside of China.
56:20
And so, there's just going to be there will be a ton of opportunity.
56:23
So, the biggest live shopping businesses are going to like the PE people who are selling are going to do a billion dollars plus in in revenue.
56:31
Like our our biggest seller probably does a couple hundred million.
56:34
Do >> you say your biggest seller is doing nine figures? >> Well, well over. Yeah.
56:41
many multiple nine figure sellers. >> Selling what?
56:44
>> Collectibles f you know we have brands doing tens of million 100 million in fashion.
56:50
>> But are these like um is these are not individuals these are just like large companies or what is what's going on like I guess give us a hero story.
56:58
>> The best probably like the the biggest are people who probably started as like individuals or maybe like two or three on whatnot and just took advantage and grew it.
57:06
So like the the operation the biggest operation that I can think of started initially as like three or four three or four people.
57:12
It's now probably 150 to 200 people almost completely built on whatnot.
57:17
And they're just like really savvy business people who sort of jumped on the the live um shopping train um and build a really large business.
57:28
And so if you you know if you sort of imagine a future where there's five you know three 400 billion dollars in sales in the US off of live there's going to be an immense number of of really large businesses built and like the biggest sellers in in China will do a billion dollars plus a year as as just like an example.
57:44
Um then there's there's a bunch of peripheral services around there.
57:47
So, one of the things we're starting to see is um like wholesale marketplaces directly supplying our sellers is a really big opportunity because they need a lot of inventory.
57:57
Um I've I've definitely seen a couple of wholesale marketplaces get pretty substantial fundraises and uh I know a huge chunk of that growth is off the back of whatnot as an example.
58:11
So I think there's there's a lot of opportunity around helping these people source really great supply.
58:17
And then you're sort of starting to see what they call MCN's around this stuff.
58:21
So multi-channel networks, which is a bunch of people who specialize in helping people run their their live shopping businesses.
58:30
So I think all three of those will will probably see a proliferation over the next decade. >> This is nuts. I You're just a killer.
58:35
I I didn't realize >> I knew whatnot was. I've I've used it.
58:39
I did not I guess I I saw the numbers, but it's kind of like now that I see what you're saying, I'm like this is insane. This is so much big.
58:51
Like originally when Sean first told me about this, I had the reaction I imagine a lot of people did, which is like this is silly. This is small. This this is nothing.
58:57
Uh like a like a multi-tens of billions of dollar company, but this is insane.
59:01
And I understand why you have helped lead it there.
59:06
>> Sam, you should start you should start your denim shop on whatnot.
59:08
Yeah, I buy um I buy a ton of I'm a eBay power user.
59:14
I buy a ton of uh I collect old denim.
59:17
It's very weird, but uh I guess I got to start using whatnot.
59:20
>> That's a that's a popular popular uh segment.
59:24
>> Do you have any hobbies?
59:24
Do you do you like any weird stuff now that you see all these other weird things that people buy and sell?
59:28
Do you have any uh interesting hobbies?
59:31
>> I still collect things, but you know, nothing like obscene.
59:33
I've sort of been collecting type one photos, which are like original photographs.
59:36
Um, that's probably the one thing I've been purchasing most recently.
59:41
And then other than that, my hobbies are are pretty pretty tame.
59:44
I'm Canadian, so I still play hockey.
59:47
>> Sean, you had a good read on him, man. >> Winner energy. I told you. >> Winner energy. Wow.
59:53
>> Thanks for coming on, man. This was fun.
59:56
>> Yeah, thank you guys for having me.
59:56
It was a really fun conversation. You guys made it. Made it. Super fun. >> Well, thank you. We appreciate you. That's it. That's the pod.