"one lesson I learned the hard way a bunch of times on this is that if you think about running a Marketplace you're basically like a gardener you have to have a very light touch like if you're building..."

"on playing with those variables welcome to Lenny's podcast I'm Lenny and my goal here is to help you get better at the craft of building and growing products I interview world-class product leaders an..."

"hockenmeyer I'm excited to chat with my friend John Cutler from podcast sponsor amplitude hey John hey Lenny excited to be here John give us a behind the scenes at amplitude when most people think of ..."

"well we've always thought of amplitude as being about supporting the full product Loop think collect data inform bets ship experiments and learn that's the heart of growth to us so the big aha was see..."

"to another company after just one bad experience during onboarding so if your CSV importer doesn't work right which is super common considering customer files are chock full of unexpected data and for..."

"you here so we are actual relay friends and we've collaborated on a number of writing projects including the race car growth framework and a whole thing on consumer growth strategy but there's a coupl..."

"more than 10 acts of business in that time from there I built a strategy consulting firm where we work with a bunch of the top gross stage marketplaces on a range of topics and ultimately that firm wa..."

"other teams make better decisions so we're typically diving really deep into a bunch of topics across the business I think it's really easy to make that work kind of go off the rails or go too deep un..."

"these assumptions but it is a great tool for kind of opportunity assessment for the business awesome so maybe a simple way to think about it just summarizing is it's essentially a formula for your bus..."

"kind of basic monthly retention curve so how long are they staying around what's the survival rate of each of these in those kind of Stack over time and then you have monetization so in the simplest e..."

"part to model but for transactional business you took that very high cogs or something else that you need to model something right because you're just taking a cut you're not selling software and then..."

"hard to side something we've spent a lot of time thinking about at Bears Marketplace businesses and so if you're not careful you can have a junk in junk out problem with marketplaces and so the thing ..."

"last point a little more concrete what's an example of that what's a team that would have their own little model and imagine every team has their own understanding of yeah whatever works but yeah what..."

"their models are going to look pretty different than like what a growth team is managing got it so you mentioned this idea of archetypes and I was going to ask you when you think about developing a gr..."

"which is a product in grow school which we both know has done I think probably the most work to build this into a discipline and so if you want to go really deep on this my top recommendation would be..."

"a result you may be misallocated your product and growth resources in a pretty significant way so your point there is really important that the more you work on the stuff the more you will learn what ..."

"awesome so say that somebody has been listening to this episode maybe they've heard it they've listened to it three times now and they're just like hey I got a model that kind of feels like the beginn..."

"ability to make much better kind of allocation decisions so would be like at the most macro level and I think the more micro one is for an individual product pod I had this Northstar goal which lever ..."

"better customer Journey awesome your point about retention being one of the biggest levers always is really reminds me at Airbnb there's like a dive ones or a data dive ones where the data scientist f..."

"why this is a valuable product and kind of prove to them that it's valuable and so the experience that have been most effective have been typically focused on very early early life cycle and one reall..."

"curves going forward amazing such a great example and story it makes me think about this work that I imagine every company ends up doing which is what are leading indicators of future retention and I'..."

"and it's interesting that onboarding comes up a lot on these conversations just the power of onboarding and how much effect that has down the road you're to your point people often want to increase re..."

"so I want to transition a bit to talking about marketplaces I honestly can't think of anyone that's worked on more Marketplace companies than you maybe Jeff Jordan at a16z who's invested in Airbnb and..."

"great businesses I think to your question on on why they're fun to work on I think everything is just harder every question is more complex and so that's made them I think really fun fun to work on fo..."

"that I mean I think there's a there's a few folks in this community who've worked with a bunch of marketplace and you start to see the same topics over and over so it's really fun to riff with that gr..."

"beyond basic click-through metrics and instead use our North Star metrics like activation retention subscriptions and payments an EPO supports tests on the front end the back end email marketing and e..."

"money on every drive and so I think understanding that and the components that lead up to is very important part of understanding your Marketplace so those would be the tube kind of obvious ones I thi..."

"a liquid Marketplace and essentially until you have a liquid Marketplace really nothing else matters and so this should be the primary thing you're focused on defining and then building tours and this..."

"retailer unfair if they're buying to shop stock their store how much of the product on their shelf came from their reverse from somewhere else these are very important metrics for us to understand one..."

"if you could if you could tell me we could grow GMD 10 by getting 10 more customers or by getting 10 of more of our current customers wallet I would take the latter because you now have a deeper relat..."

"marketplaces and so I'm curious do you find sure wallet is important on both types of marketplaces or is it a lot more important in B2B so you typically have some form of business on the supply side o..."

"in their store what percentage of that shelf came from Fair versus something else awesome another constant question Marketplace Founders have is whether they should focus on Supply or demand and I kno..."

"have enough Supply you don't have anything and so you do have to focus on it to to a high degree early on and two is often the supply side by Marketplace is using the product more deeply there's more ..."

"and so demand is the currency and so when you think about trade-offs or how to optimize a business I think taking the perspective of the customer or the demand side is always the right one I think the..."

"kind of pet store example on Amazon there's some amount of Supply where you're probably no longer incrementally improving the pet buyers experience and so it's probably not worth investing those dolla..."

"include the cack of acquiring that customer but also the cack of acquiring the supply for that customer to purchase which is based on some ratio between the two and similarly on the supply side that b..."

"folks to come up with these models in some way or is that a whole Master Class of its own so there's a lot of nuance by business but the basic formulation is CAC for this side you're focused on so let..."

"stage marketplaces Founders sometimes over focus on like the theory of marketplaces and how all this stuff that people have put out including yourself and others about just like how to think about Mar..."

"business and you're trying to figure out how to price your subscription theoretically you can draw a curve which says as my price goes up fewer are going to convert and so just find the optimal point ..."

"lesson I've learned the hard way a bunch of times on this is that if you think about running a Marketplace you're basically like a gardener you have to have a very light touch like if you're building ..."

"them to adopt these recommendations building a model to actually come up with the recommendations and so it's your point pricing is such a complex beast and especially at a Marketplace absolutely and ..."

"Services industry for Thumbtack or the global wholesale industry for fair like these are meaningful percentages of global GDP they're like huge markets and as a result they're really frustrating to wo..."

"more likely their current model is going to work there than trying to expand into something else and that's the right prioritization function for them to think about versus like is retail slightly big..."

"exactly awesome I think there's yeah there's one other lesson here which I've learned a few times which is that product is the thing that matters when expanding so because of this Dynamic we talked ab..."

"happy and you can give people what they're looking for is there anything you can add there or talk about yeah I think that's exactly right and the reason this is the right advice is because everything..."

"how do we add a Marketplace to what we're doing I'm curious how often you find that this actually works out and what do you have to get right to add this other type of business model on top of somethi..."

"Founder was coming to you and they're like hey Dan we are a Marketplace and we're thinking about adding a SAS product on top would you one try to discourage them from that and if two that doesn't work..."

"successful horizontal Marketplace yeah absolutely and in that eBay example there are now a few quite successful examples of this like like goat and stockx or two where they like carved out the sneaker..."

"narrow thing unless you find something which that sub segment is itself very high frequency or very high dollar value so like airbnb's example with that they unbundled from Craigslist because they pic..."

"low frequency it comes with all kinds of new challenges because without frequency customers forget about you and so what is the hook to get them to come back do you have to reacquire traffic it create..."

"there do you think there's a rising trend of B2B marketplaces do you think this is always going to be a smaller collection what's your feeling so I do think we'll see more of them part of the reason w..."

"is that B2B also comes with something else which is much lower fragmentation in many cases and you need fragmentation for a good Marketplace like the more concentrated either side of your Market is th..."

"fragmented you are and the challenge that creates for a Marketplace is if there's 10 companies in space that are doing 80 of the volume it's very important for me to have a relationship with those 10 ..."

"makes sense basically like how much value are you bringing to this market and if it's not enough where you can charge anything meaningful to run a business is just not going to work and so yeah that's..."

"variable to me that matters in deciding which case you're going to have whether they consolidate or not is how much creativity there is in the space so like how much do you need the supplier to be com..."

"Marketplace when you don't own the supply you are is that anything about that yeah that's a good a good mental perhaps like another way to say owning a supply is when there's no longer a direct transa..."