"I think a lot of people think about markets almost like these bodies of water you know it's like oh it's this big body of water that we're going after and I actually think that the most interesting ma..."

"why we care less about Market size because really what you're looking for when we you're looking at a market or what are the Dynamics of change what's the current and momentum that's going to pull the..."

"Sarah tavl after a short word from our sponsor this entire episode is brought to you by gal your gateway to smarter Tax Solutions navigating the world of taxes can be complicated and stressful G is he..."

"with gelt Sarah thank you so much for being here and welcome to the podcast super excited to be here so you may or may not know this but actually normally have a policy of no VCS on the podcast but yo..."

"consumer Founders building consumer social products this was during a time when everybody was getting excited about a growth hacking and what you would see is that you would see all these Founders com..."

"hierarchy and what I what you realize when you look at Social products is that there're almost always is this action which I call the core action of that product that forms the foundation of the produ..."

"level one basically there's some definition of an active user that a company that a consumer business basically needs to Define and essentially figure out what is that what is the action they're takin..."

"and and know exactly the one that you're going to be picking to go forward one more qu question along these lines how do you think about this Milestone versus the activation milestone for an user do y..."

"apply it and use it in a way you have to think holistically when you're building these consumer products when you're designing it but I think it's very important as once you get the product out and yo..."

"something that endo and so the test for me of whether you're building a product that has the ingredients to create a retentive product on a micro level just at the user level is that the product shoul..."

"identity or these different bookmarks that you want to go back to so that was kind of this idea and it it's very important that the core action is the thing that you use as a product to make the exper..."

"your your tall task and this is a very difficult this is like the hardest thing to overcome is how do you make the product self-perpetuating and this is where I really I love to think with like of you..."

"that spins faster and faster but there's other Loops too that you have to identify and then maximize and these are the kind of growth and re-engagement Loops right and so these are kind of classic Loo..."

"Pinterest wants in that in that example now as much as I love uh Evernote uh this is a place where Evernote obviously falls down right there's no there's no Loops that they can take advantage of that ..."

"real tricky Nuance in in this level three so I think people hearing this are going to be like okay get people to use your product more often increase retention make it viral basically it's like it's l..."

"that's absolutely right and I it's and the importance of it is like I can't emphasize enough how important focus is when you're building these companies it's it's so hard and there really isn't a Play..."

"think a framework like this can be really clarifying there's lot of depth behind each of these things that you you're being modest about one is with the top of this pyramid of making itself perpetuati..."

"Capital to do that with marketing there's one example that we have so far which is Tik Tock of spending you know more than a billion dollars once they figured out actually the first two levels in orde..."

"is it is hard and at the same time though we do see exceptions to it where I still feel like consumers are hungry for new experiences and so we've seen a couple over the last you know few years that h..."

"destructive K factor that kicks in the same way kicked in to get it to spread yes as people say if when something grows really quickly it also can collapse really quickly yeah tough I guess along thos..."

"pure anonymity is that you don't have that acre benefit or mounting loss that that happens I don't know if you ever played with secret but it's a similar to Tik Tock or something like that these are t..."

"going to pull on this thread of just ways to increase retention basically this is one of the things maybe the main thing you're telling people to help increase retention make it so that it's really ha..."

"a healthy place with retention number one is actually measuring it like I can't tell you how many times I suggest to a Founder to to track cohorts and that's a new thing and so you know just being rea..."

"opposed to kind of the classic you know leaky bucket where the cohort just keeps on dwindling down and until you reach a point with your cohorts where there is a plateau you have more work to do on fi..."

"where they want to get to you know they see they compare themselves to the full expression of a product that you see with other products you know Roblox Instagram Tik Tok whatever it may be and they w..."

"just creating a new fotograph but that was about you know things instead of what what Twitter was or what Instagram was and so it wasn't obvious and what happened actually is that there was two effort..."

"experiment awesome there's a post I'll link to in the show notes where there's actually a sure a guide to doing this regression analysis on how to figure out your activation Mone basically what is mos..."

"loved that example because it also it showed a little bit The Evolution that can happen with these companies but then also just the beauty of like you know you've got something really right with the c..."

"of all I want to give a shout out to Mike Williams who's the founder of everything marketplaces who gave me a bunch of good question suggestions to ask as wonderful now I'm nervous he's he's Mr Market..."

"equal right like so imagine a food delivery company 10 years ago you could have a million dollars of gmv by getting you know focusing on LA or a million dollars of gmv by focusing on Boston or you cou..."

"product and go to market org for the supply side and somehow you have to make these two line up so that they serve each other's needs it's it's an incredibly difficult um dance and and it it really it..."

"beautiful thing about the suburbs is that there was very little competition because no one thought that you could do it economically and they probably weren't wrong in the beginning like door Dash los..."

"retained and this word happy I use I should I should expand on it a little bit because the you know when you the realization I had as I reflected on this kind of feeling that GM V is really actually a..."

"or a product leader have to focus on which is what do I think is going to be the experience of a buyer or seller that leads them to retaining and tracking that as like the Happy path and therefore the..."

"and again it's difficult it's easy to say it's difficult to do as a Founder to tell them like you just need to get a small version of this Marketplace working yes versus you go big really quickly and ..."

"taxes with gelt I want to talk about what it looks like when you you've got it working and it makes sense to start expanding but before I do there's one counter example I found in my research which is..."

"relationship with you and start to think of you as a place to go to and that's probably that was the trickiness with Thumbtack and by the way when we talk through level two that also is the trickiness..."

"essentially the very fuzzy product Market fit question and I'll link to a few posts I've written that help people get there I guess is there anything you want to add there just like I mean I love you ..."

"awesome okay let's talk about Layer Two around tipping the marketplace so Layer Two I think will actually illuminate again the importance of that constraint Focus for layer one you're doing all these ..."

"buyers that tip you might see your cohorts get a little bit better you start to see some organic growth and and let me kind of give a story or an example of uh a company that I got to see where the ma..."

"what would happen is that as recky grew more and more in London these suppliers started to get more and more of their restaurants ordering via REI and then some some of the early suppliers started to ..."

"in your experience is this tipping often it just happens as you become more successful in this thimble of a Marketplace or is it things you have to do actively to tip to get to this place because it s..."

"restaurants yes and it's just shows it shows how creative door Dash was to both sides of the market in that example and then fair is an awesome example too which sounds similar to Rey as you described..."

"of them almost as like the kidneys for your Marketplace as you grow the the happiness Loop the idea is like you have a lot of new sellers coming in and of course you have new buyers but you want to ma..."

"Marketplace getting matched with with with buyers and so you're trying to then make sure that as you grow you have a natural mechanism in your Marketplace to reward the suppliers that you want to rewa..."

"quickness by which you got the delivery and so that restaurant that takes 40 minutes to prepare the food they would get ranked low in the experience for Uber Eats even if the food was really really gr..."

"efficiently as possible before you move on to bigger challenges and and so I love I I think it kind of underscores again why it's so valuable in the beginning to focus on something that is that is con..."

"on in my post just to name a couple uh classic ones you know the the first obvious one is just concentration on the supply side in order to be able to tip a market you need suppliers to want to lean i..."

"just like to double down on this point that what makes a Marketplace valuable is Supply that is hard to find that you make easy to find and transact with and I feel like that's almost the the core of ..."

"especially if it's a geographically oriented Marketplace like a door Dash sometimes you have more customers than restaurants sometimes you have too many restaurants not enough customers it's very City..."

"that that's what has let Airbnb really close and Escape competition with B2B marketplaces what sometimes happens like a labor Marketplace is that you have this homogenity in the supply where it's not ..."

"when you're building a Marketplace like the history of marketplaces is one in which you have a Marketplace that feels dominant and then gets disrupted by by a competitor home away VRBO being disrupted..."

"playbook you don't yet know whether this Playbook is repeat able right like it's it's not always the case that the the Dynamics of one market is the same elsewhere I'll take recky as an example in the..."

"there's kind of three vectors then that any Marketplace can grow at this point the first Vector is within the existing Market where you already are tipping that market you as a Founder then have to ma..."

"Market that you're going after within within the same market and so what I mean by that is you know Uber went from black cars to Uber X to Uber pool you know they kept on finding ways in the geographi..."

"right each market that you get you have scale in where you're you'll have contribution profit you take that contribution profit you invested in New Markets the more markets and contribution profit you..."

"is so important is most Founders that are ambitious start with this right they're just like go big immediately Blitz scale we need to win fast before anyone catches up and so again it's a remind that'..."

"those cities and and of course we never have one competitor always have a lot of competitors and so focus on on on these steps is just it's it really is such an important thing to have discipline arou..."

"just you won't make as much money nearly as much profit basically your cash flow that's right something that you all at Benchmark are really big on which I think would be interesting to talk about is ..."

"can you speak to that and help people understand I mean I mean do you you remember the early days of Airbnb like how big there that early yeah but like you knew of it and like Etsy also underestimated..."

"but it in the beginning it's going to look small let me give you the example of hip Camp hip Camp when we invested was literally land you know it was land where people um I don't know Lenny if you're ..."

"opportunity for hip Camp into people more like me that are glampers that want that experience in nature but maybe don't want to pitch a tent to have it and so that's kind of one of those examples of a..."

"buyers it was this big erosion of trust and they ended up I don't know if it was related but it ended up precipitating I think a CEO change to to the CEO that is there now and who has obviously done a..."

"thinking actually of one founder I met recently where there's that earned secret where they see a market opportunity that other people are overlooking that hasn't been addressed maybe there's a reason..."

"coins I'm a huge believer in stable coins and I think that's a market where you have a we have a real current with inflation in so many local currencies There's real demand for St stable coins a US do..."

"interesting yeah I should have been clear it's like a very specific part of crypto that's just not happening too much versus what it was okay we've gone totally off track so let me come back to our tr..."

"Airbnb and homeway uh door Dash and GrubHub you know GrubHub wasn't able to for for different reasons they were a public company and so they could couldn't access capital in the same way that the priv..."

"chatting about this conversation something you mention is that even if you're not building a Marketplace these lessons are actually still useful so say you're building an open source product or a soci..."

"happy happy developer in the case of Dev tools or happy Enterprise user just like get happy people using your product and coming back to it so I love that as a reminder one other question is you wrote..."

"we gave the hip camp stories and you know bringing that online taking friction away and showing that it's actually a bigger Market than you think and then the third is changing the atomic unit of the ..."