The shift sparked a loud social-media backlash, but, as you’ll hear in the episode, the comments mostly missed what was actually happening on the platform.

We discuss:

• The pivot timeline and rationale: Constantine explains why the change occurred now and how it was introduced step-by-step to the community.
• Finding out who your power-users are and what they want: There were several assumptions, both internally and externally, about what Dribbble was, who it served, and who its power users were. But when Constantine had several conversations with uers, and combined the insights from there with the data, it became clear that agencies were the true power users, which helped shape the direction of the changes.
• The aftermath and the metrics: Despite the initial uproar online, the team soon realized that the loudest comments didn't come from the power users. In fact, within three months, the team saw the GMV triple.

All in all, a very thoughtful conversation, that offers several practical lessons on turning attention into reliable revenue, without breaking your community. A must-listen for anyone building a service marketplace! 

In this first episode, you can hear the story of Marcel Fairbairn and Gearsource.

GearSource is a marketplace that helps rental companies sell professional audio and event production equipment they no longer need. Marcel Fairbairn built the company in 2002, which makes GearSource one of the oldest online marketplaces still in operation, alongside giants like eBay and Amazon.

What you'll learn:

• How a self-funded founder built one of the oldest surviving marketplaces on the internet
• How Marcel identified an “invisible inventory problem” that became an idea for a marketplace business
• The critical "aha moment" when Marcel realized his 16-year-old business was actually a marketplace, and how that changed everything in Marcel's approach
• Why lowering commission rates accelerated growth and scalability
• The painful lessons from three platform migrations before finding stability with Sharetribe
• How to transition from a high-touch service model to an automated marketplace
• Marcel's unconventional strategy: "Be aggressive on growing revenue, conservative on growing expenses

Here are three highlights from the conversation:

• The Key to Defensibility: Pete explains why network effects are the best form of defensibility for marketplace businesses and how they make companies resilient over time.
• AI's Role in Marketplaces: Pete discusses how AI is both disrupting and enabling marketplaces, and why it’s creating entirely new marketplace models.
• The Best Advice for Marketplace Founders: Pete shares his top tips for aspiring founders, from identifying the hardest side of the marketplace to seizing opportunities during economic or regulatory change.

Tune in to hear Pete’s insights on building long-lasting, resilient marketplace businesses powered by network effects.

• The rise of re-commerce and the role of technology in creating trust and transparency within B2B marketplaces.
• Why focusing on niche markets can be the key to achieving fast growth in B2B spaces.
• A shift in monetization strategies: How B2B marketplaces are moving beyond traditional transaction fees

Listen to hear how DFF Ventures is backing innovative B2B marketplaces and how aspiring founders can capture market share in under-digitized industries.

Highlights:

• Why unique supply is key: Colin explains how aggregating truly unique supply drives the success of a marketplace.
• The importance of a strong distribution strategy: A strong go-to-market plan can be the deciding factor in whether a marketplace reaches scale.
• AI-driven agent-led marketplaces: The future of marketplaces may lie in AI and automation to scale operations and improve the user experience.

Did this make you curious? Then don’t wait and tune in to this episode!

Highlights include:

• The power of speed in decision-making: Jeroen discusses the critical importance of “clock speed” in founders—how quickly they make decisions and adapt to change in the early days.
• Why market focus trumps premature internationalization: Learn why trying to scale too quickly into multiple regions can backfire for many early-stage marketplace founders.
• Trends driving marketplace innovation: Jeroen shares his excitement about emerging opportunities, especially in industries like health and Gen Z-driven consumer behaviors.

Enjoy this episode!

• Frontal vs lateral attack strategy: Mira highlights the challenges of launching a marketplace that directly competes with an established player (frontal attack), advising founders to instead focus on a smaller adjacent market to gain traction and gradually expand into the larger market (lateral attack).
• The importance of starting in a small, adjacent market: Mira explains how focusing on a niche can lead to faster product-market fit and eventual scalability.
• Why liquidity is the core of any marketplace: She stresses the importance of building liquidity before worrying about advanced tech or scaling.
• The role of AI in disrupting marketplaces: Mira discusses how AI can optimize marketplace operations and help founders stay ahead of competition.

After this episode, you’ll again have a slightly deeper understanding of what makes marketplaces succeed!

• The importance of creating new market opportunities: Andrew explains how successful marketplaces unlock new supply or demand that didn’t exist before, like Airbnb did for short-term rentals.
• Why building traction before raising capital is key: He shares advice on how to validate your marketplace idea and gain traction without relying on funding too early.
• The impact of AI on the future of marketplaces: Andrew discusses how AI can enhance marketplace experiences, making connections more efficient and improving customer satisfaction.

We’ll discuss how Sameer evaluates marketplace businesses:

• Evaluating Network Effects: Sameer walks through his four-step evaluation process for marketplace investments, focusing on unique multiplayer interactions and defensibility.
• Challenges in Early-Stage Marketplaces: He discusses common mistakes made by aspiring marketplace founders, such as picking overly narrow markets or trying to tackle too many problems at once.
• Future Trends in Marketplaces: Sameer emphasizes the lasting power of network effects and we explore some opportunities driven by behavioral shifts, especially with Gen Z and AI technology.

A terrific episode, packed with valuable tips and sights. If you're building a marketplace or network effects business, you’re going to love this.

I’m super excited to kick off season three of the podcast with a chat with Jose Marin of FJ Labs. 

FJ Labs is considered the world’s most prolific angel investor: they have over 1,100 startups in their portfolio, including heavy hitters like Airbnb, Alibaba, and AngelList (and that’s just the ones beginning with the letter A). Jose has also been a marketplace founder himself. His marketplace DeRemate (eBay model for Latin America) was acquired by Mercado Libre, which today is a NASDAQ-listed company. 

In this episode, Jose and I discuss:

• How FJ Labs has built its unique investment approach using their vast vertical expertise.
• The emerging trends in marketplaces FJ Labs are seeing in their portfolio, such as B2B digitalization and cross-border commerce.
• Some important things that early-stage marketplace founders should look out for.

I couldn’t have asked for a better opener, so dive right in!

On January 30th, 2024, Sharetribe launched its best marketplace builder today on Product Hunt. We were featured as #2 Product of the Day! Thank you so much for your support!

With the new Sharetribe, you can launch a marketplace in a day, without coding. You can also extend it infinitely with code. And scale to any size.

Create a Sharetribe account: https://www.sharetribe.com
Check out Sharetribe on Product Hunt: https://www.producthunt.com/posts/sharetribe-2

Follow Sharetribe on

• LinkedIn: Sharetribe
• X (Twitter): @sharetribe
• Instagram: @sharetribe
• Facebook: @sharetribe

Besides a recap, you can use this episode as a quick guide to discover the episodes you have yet to listen to or rediscover your favorites.

We hope you enjoyed this season! 

If you have any feedback about the podcast, email sjoerd at sjoerd@sharetribe.com.

But building a community takes time and work and, most importantly, engaging in it yourself.

In this episode, Sjoerd interviews Gene Miguel, CEO and co-founder of Shortboxed, a marketplace for buying and selling comic books.

Gene and his co-founder have been lifelong comic book nerds. They both had day jobs in tech, but dealt comic books on the side and spent their days off at comic book conventions. They also started a comic book blog, around which slowly a community started to form.

As dealers, they experienced first-hand how poorly and inefficiently the entire comic book secondary market was run. That’s when they decided to build Shortboxed.

In this season’s final Two-Sided interview, Gene shares:

• How starting a blog helped them build the community
• How building in public with the community helped them onboard the first supply and demand
• What a double-bind marketplace is, and why Shortboxed uses that model
• How they faked many features by running them manually before automating them

A compelling story of a marketplace where passion is combined with a solid business case.

In the case of Trisha Bantigue, this is certainly the case. Trisha was born in the Philippines, raised by her grandparents, immigrated to the US at age 10, and paid her way through college by competing in pageants. 

Today, she is the CEO and co-founder of Queenly, a marketplace for formal dresses. Queenly is backed by prestigious investors such as YCombinator and Andreessen Horowitz.

Though Two-sided does not focus on founder stories, Trisha's journey is pivotal in the story of Queenly. The idea behind the platform comes from Trisha's own pageant experience. And marketplaces in their early stages need non-scalable tactics; in other words, perseverance. Trisha had that in plenty.

In the latest episode of Two-sided, Trisha tells Sjoerd how Queenly got to where it is now: 

• Launching the app and getting absolutely no traction for months.
• The difficulty of estimating your own worth as a first-time founder.
• The challenge of talking to investors in a way that makes them understand your vision and punctures their preconceptions.
• How to deal with incredible setbacks, and turn them around for the better.

Overall, a truly inspiring story for all of the marketplace founders listening

On the one hand, launching an MVP as fast as possible is often the best strategy.

On the other hand, high quality and trustworthiness are essential, especially for peer-to-peer marketplaces.

Despite being first-time founders, Gaurav Singhal and Dirk-Jan ter Horst cracked this trade-off from the get-go. When they launched their peer-to-peer car rental platform in Singapore, their sole focus was to get to the market fast. Yet they had a clear vision for Drive lah’s customer experience from day one.

In the latest episode of Two-Sided, Gaurav shares his lessons on:

• Transitioning from a corporate job to entrepreneurship: both founders were working at the same corporation, where they conceived the idea over lunch.
• Testing potential features with manual work before building them – and spending lots of time with customers in the process. 
• Launching fast with Sharetribe Flex without compromising on their customer experience vision.
• Working with regulatory limits: before Drive lah, it was illegal in Singapore for private individuals to rent out their car.
• Putting trust front and center: having raised their seed round one month before Covid, Drive lah was able to turn a potential disaster into a tailwind.
• Expanding Drive lah to Australia as Drive mate.
• And much more.

An enlightening episode, with something for everyone building a marketplace.

One might think there are no opportunities left for new marketplaces in these pioneer industries. One would be wrong. In this episode of Two-Sided, Sjoerd talks to David Oates, CEO and co-founder of Curtsy. Curtsy is thriving in one of the most crowded spaces for marketplaces: reselling apparel.

On the podcast, David shares the most important lessons they learned since Curtsy was founded in 2015:

• Be efficient: Curtsy reached $25M in GMV with a team of six.
• Start with one niche: Curtsy started as a peer-to-peer dress rental platform for sorority students in Southern universities in the United States.
• Don’t force your business model on your market: it took Curtsy some time to find out people wanted to sell rather than rent out their pre-loved clothing.
• Have big bets on your roadmap: David finds it important that Curtsy doesn’t only focus on incremental improvements.
• Get the best advice available: Curtsy was part of Y Combinator, which is generally considered one of the best startup accelerators in the world.

A very entertaining episode, showing that even crowded spaces have room for new entrants with an innovative approach.

Jason is a big sports fan and has always loved working in sales. Before founding MarketPryce, he ran his own sports agency where he tried acquiring customers by sending Instagram messages to almost three thousand professional athletes.

The success rate of the Instagram tactic was pretty terrible. But the experience paid off big time when Jason co-founded MarketPryce, a platform for athletes to find marketing deals. MarketPryce has matched thousands of brands and athletes together. For finding both sides, effective direct sales has been a core strategy.

In the latest episode of Two-Sided, Sjoerd talks with Jason about:

• How most marketplace founders still underestimate the power of direct sales
• How a change in regulation grew MarketPryce’s market one hundred times overnight
• How MarketPryce modeled its user experience after Tinder.

  
  

A fun episode, giving a glimpse inside a relatively early-stage marketplace growing very rapidly.

Andrew’s latest venture is MicroAcquire, a marketplace for buying and selling online businesses. The platform boasts a community of more than 150,000 entrepreneurs and raised $6.3m in funding last year.

In the latest episode of Two-Sided, Andrew talks to Sjoerd about:

• How his entrepreneurial journey influenced his approach to building MicroAcquire
• Making non-obvious bets
• The importance of loving what you do
• And much more.

A really inspiring episode, giving a serial entrepreneur’s perspective on building a marketplace business. 

Many of us have probably daydreamed about spending a few weeks on the road in an RV. Just get in the van, and park it wherever you want, and that's your home for the night. Dirk loved this too, and so much that he founded a company around it. It's a wonderful story, driven by passion, and started out really lean, as you will hear.

We talk about: 

• How PaulCamper got started
• How Dirk built it piece by piece
• How they keep quality under control 
• The quite remarkable way how they use insurance as an anti-disintermediation tool 
• And how much work Dirk needed to do to get this insurance product into existence.

We talk a bit about that journey, how they found content & SEO to be their best channel, and how they doubled down on that. We also discuss how Reedsy built a community to support the business and some interesting thoughts about financing your startup.

This rings doubly true for James Younger of TempStars, a marketplace for temporary dental hygienists and assistants. Not only is James working on a problem that he knows really well, but he also made a point of getting to know as much as he could about design, web development, and digital marketing after the first version of Tempstars turned out disastrous. 

We speak about that, and about how Tempstars got started, how they built a special algorithm to maintain quality, and how they plan to scale the whole of North America.

And boy, are good things coming! I have already recorded some really terrific interviews and a few more in the pipeline, and I found myself learning a whole lot again, about network effects, prototyping, insurance as a service layer, low-frequency marketplaces, and many many more things.  
We’re going to take it a bit slower this time and we aim to release one episode every two weeks. If you want to be notified automatically, subscribe on Spotify, Apple Podcasts or whatever is the platform of your choice. 

Also reviews are still very much welcome, hit the 5 stars if you like it, and hopeful that will help us reach more people.

That is all for now, you will hear from me and some brilliant marketplace minds soon!

Michael DeGiorgio: [00:00:00] And I kind of, in the back of my mind, thought, "If nothing else, you know, this'll be a platform that we can transact on ourselves if people didn't want to use it."

Speaker 2: [00:00:13] Welcome to Two-Sided, the marketplace podcast, brought to you by Sharetribe.

Sjoerd: [00:00:24] Hi. I'm Sjoerd, CMO at Sharetribe, and I am your host. For this episode, I talked to Michael DeGiorgio, founder and CEO of CREXi, a marketplace for commercial real estate. This is an area, uh, [laughs] as you'll hear, which I knew absolutely nothing about, but it turns out to be an actually fascinating industry which was ripe for some serious disruption, as you'll hear.

I talk with Mike about how to build productivity tools for one side of the marketplace and also about how, instead of getting rid of the middleman, which is something that you often see when marketplaces enter a space, CREXi actually embraced the middleman. This is a really intriguing talk, and I think there are some great insights in here for anyone building a marketplace business. Enjoy.

Hi, Mike. Welcome to the podcast.

Michael DeGiorgio: [00:01:17] Hey, Sjoerd. Really nice to be here. Thank you so much for having me.

Sjoerd: [00:01:19] Yeah. I really appreciate it. Hey, before we dive super into the [inaudible 00:01:23] world of CREXi, can you tell the audience a little bit about who you are?

Michael DeGiorgio: [00:01:27] Yeah. My name's Mike. I was born on the East Coast of the United States. Started my career about 11 years ago now in commercial real estate. I started it at a company called Auction.com, where we were trying to change the way people bought and sold both residential and commercial real estate.

Uh, I was one of the first people on their commercial division, so I was really trying to take commercial real estate transactions online and to online auctions, uh, where I got a pretty good sense of the ecosystem, the software available in our space, and some of the deficiencies in our space.

Uh, I spent about four years there, had 10 different roles while I was there, did everything from broker deals to be an auctioneer on auction day, and oversaw multiple different teams, uh, during my run there. And then, left about five years ago to form CREXi.

Sjoerd: [00:02:11] All right. So there was already effectively a marketplace, Auction.com?

Michael DeGiorgio: [00:02:15] It was really just a different way to transact. It was, uh, taking the traditional process, which is, you know, very manual, and bringing it to an online auction. Auctions were still, at the time, were a known way of transacting commercial real estate and residential real estate, typically for distressed real estate. Uh, what we did was really just bring that auction part online. The rest of our process was, uh, still very much like a broker.

Sjoerd: [00:02:39] All right. Yeah. Was it a big operation?

Michael DeGiorgio: [00:02:41] So when we started, I was, you know, maybe one of the first five people on the commercial division. My, after being there for about three years, we had raised a large round from Google Capital. We raised $50 million at a 1.2 billion valuation. The company grew to 1,000 plus people [inaudible 00:02:56] during my time there. And then, I left. So got big over time.

Sjoerd: [00:03:00] Yeah. And so, you left, and then immediately after, you started CREXi? Or did you leave really to start CREXi?

Michael DeGiorgio: [00:03:07] Left to start CREXi. I was pushed by a former mentor of mine, uh, over drinks one night, to kind of, threw a, lobbed a question at me asking what I would do if I could go kind of out on my own. And I responded by telling him, "I think there's a way to bring, really, everything about commercial real estate, leasing, transacting, data, online in an intuitive way that's not out there, and I would go start that company." And he became my first investor, and I left my career behind about a month and a half later to go start CREXi.

Sjoerd: [00:03:36] All right. So basically, you are this, well, let's say, hardcore real estate veteran. And during your time at Auction, you were just thinking, "Ah, we could do this so much better." Is that what happened?

Michael DeGiorgio: [00:03:48] Yeah. I think especially, you know, at first, I was very bought into the vision. I think over time, as I learned how the transaction works for real estate really well, I probably sold 600 commercial real estate properties during my time there.

Sjoerd: [00:04:00] [laughs] Wow.

Michael DeGiorgio: [00:04:00] As I kind of started to learn the different ways commercial real estate was sold and really started to get to know some of the software that was available to us in the space, because we still used other software platforms to help our process, I started to see that there was none I really believed in, and there was a much better way of doing it. And a lot of them were really, you know, antiquated, kind of web 1.0 version technology that I thought could be enhanced and taken so much further than it was. So I set out on the journey.

Sjoerd: [00:04:27] And could you share a little bit, like, what were the things that you're like, "Ah, this is, you know, we, first thing I'm going to do at CREXi, this is what we're going to do. Like, this is how we are going to be different from Auction.com and whatever other things were out there?"

Michael DeGiorgio: [00:04:40] Yeah. I guess in its most simple form, you know, Auction.com was really putting people in a box. They were forcing, if you wanted to use it, you had to transact in an auction. And I started to learn pretty quickly that oftentimes, I would sell the property prior to the auction, more traditionally, or after the auction, because the deal wouldn't sell in the auction, more traditionally after the auction.

And there's just so many different ways to transact commercial real estate. And there's also a lot of tedious processes involved in transacting commercial real estate that would take half your day and really get in the way of just you getting a deal done.

And so I, I really thought, you know, the two basic things were, most importantly, let's build some tech to solve some of these pain points that, you know, maybe used to take a half a day. I could take it and make it a couple clicks of a mouse.

And let's make it more flexible so you didn't kind of get forced to transact in an auction only. I thought, over time, you know, that can be an offering we have. But let's make it really flexible so that you can transact in multiple different ways on the platform.

And I kind of, in the back of my mind, thought, "If nothing else, you know, this'll be a platform that we can transact on ourselves, if people didn't want to use it." So that was kind of our backup plan, was let's build something where, if I had to go start transacting real estate again tomorrow, I would be able to transact better than I could without this platform that we were going to build.

And the hope was people saw the value in that, the time saving in that, the different, you know, advantages of being able to use a platform like ours, and everybody would start to use it. And we'd get the whole industry there together. And if we didn't, you know, we had, we at least knew we could transact on it and make it big that way.

Sjoerd: [00:06:10] Yeah. So...

Sjoerd Handgraaf: [00:00:23] Hi, I'm Sjoerd CMO with Sharetribe and I'm your host. I'm actually very excited today because this is the first time that I can say to at least some of you welcome back  because we dropped the first few episodes last week and the response has been absolutely amazing. And if you're one of the people who heard those and came back, thank you so much.And also thank you for the fantastic response we've gotten so far. Now let's dive into the episode. So in this episode, I'm talking to Charles Armatage. Charles was actually a doctor and training to go into emergency medicine, but then decided to radically change his career to start a marketplace for independent nurses and elderly care.

Well, Charles will tell us all about that. And it's a very interesting story, but he'll also show us the importance of talking to your customers before actually building your huge product. You know, spoiler alert, their first version failed hard and how to build relationship and have trust in such a delicate Margaret.

Again, I've only had fantastic episodes so far, and this one is no exception. So sit tight and listen to Charles story 

Charles Armitage: [00:01:27] about Florence.

Sjoerd Handgraaf: [00:01:36] Hi Charles. Welcome to the show. 

Charles Armitage: [00:01:38] Thanks very much for having me. 

Sjoerd Handgraaf: [00:01:39] Hey, I checked out a little bit of your background. I saw that you're trained as a doctor and well, I think we'd like to know a little bit more about you. So can you tell us a little bit about what you did before you ended up at Florence?

Charles Armitage: [00:01:51] Sure. So, uh, absolutely. So it was a, a doctor in the UK and a number of different specialties, but it kind of was settling in on emergency medicine and then laterally surgery. So was pursuing a career in trauma surgery, but still relatively, kind of early on in that journey. It takes quite a long time to get to.

You know, the end of being a trauma surgeon, but yeah, so worked in a lot of places, worked in London a lot on the South coast and up in Scotland and then some other funny places around the world, like South America and Africa and places like that. 

Sjoerd Handgraaf: [00:02:21] That was too boring for you or what was the reason why were like, Hey, 

Charles Armitage: [00:02:25] sure.

I'm sorry. Is that something that was a bit boring actually. So I could talk about this forever, but the thing about medicine is that, um, you know, you get moments of absolute, huge adrenaline rushes and amazing thrills. Also punctuated by quite a lot of time, grinding your head against quite a challenging system.

And you can spend a lot of your time doing paperwork and filling out. You're not necessarily having a massive impact. And certainly that the impact you're having isn't exactly scalable. You were kind of an equals wide and there's only so much you can do really to make a change. And so 

Sjoerd Handgraaf: [00:02:54] were you always into tech that you're like, I'm going to start a startup for like, maybe you can tell us a little bit into the origin of Florence.

Charles Armitage: [00:03:02] Yeah, for sure. I mean, I've always been kind of interested in tech and I was like new shiny things, but essentially, you know, learn more and more about myself. And my drivers is kind of my goal and the journey, but essentially I just like new things and maybe I've got a slightly short attention span. So always kind of looking for something new on the horizon.

And I was working in. London at the time in emergency medicine and was really enjoying their job. But at the same time, it was kind of investigating things on the size. And one of the things I noticed and it's kind of a pervasive problem throughout healthcare in the UK and actually most of the world is, you know, the biggest challenge is staffing.

And how do you create a solution to some of the biggest challenges we face as a society, which is, you know, looking after an aging population and providing the staff to do that in like a safe and high quality way. So I was messing around with some ideas in this, any department, trying to kind of build an app for me and my colleagues to swap shifts and, you know, work more effectively between us.

And obviously like couldn't build it because I'm not technical. And it started kind of the idea going and didn't really come to much. And then I met my cofounder, Dan, who is from the military, but I guess comes from the other side of the fence as well. He manages a care home group. Well manage the cat and group in London.

So it was having challenges, finding staff to look after their residents. And we met, we were introduced by a mutual friend and kind of started bouncing some ideas around. We both had ideas in the kind of space of how can we use technology to bring together this supply and demand in a more intelligent way and, you know, high quality cost effective, all these kinds of great things.

And then we just started like, thinking about it and it's right. Single map. And you know, the rest is history. 

Sjoerd Handgraaf: [00:04:40] Yeah for the people at home. So could you tell us a little bit about what is Florence exactly. 

Charles Armitage: [00:04:45] Sure. So Florence is the online marketplace for flexible staffing on demand staffing in the cat section UK.

So what we do is we have a platform that connects care homes to nurses and carers looking for extra shifts. And I guess, traditionally the problem in the UK cast actor is a massively understaffed industry. So. It was around about 120,000 vacancies in UK care sector. So what ends up happening is a huge proportion of shifts.

About 10% of all shifts in calc care in the UK have felt both. Temporary workers, flexible workers. 

Sjoerd Handgraaf: [00:05:18] Is that elderly care only or health care. 

Charles Armitage: [00:05:21] Yeah. So when I talk about car I’m talking about elderly care in the community. So in town homes, nursing homes, not necessarily the health care sites, which is more the NHS, and there's a bit of a differentiation of the UK.

What ends up happening is about 10% of this workforce is temporary, is flexible and it's managed. Pre Florence was managed by traditional recruitment agencies who were really fragmented offline processes. You know, one man and his phone kind of with relationships with individual workers or homes and bring these two people together.

And, you know, whilst. That's a model as well. For very long time, it was hugely expensive for the care sector. So billion spent every year just on the kind of the agency models in the middle. And there's just so much that could be done with technology to improve those engagements. 

Sjoerd Handgraaf: [00:06:02] Yeah. And so Dan had experienced that problem himself.

Charles Armitage: [00:06:05] Yeah. So he was the chairman of this nursing home that couldn't find nurses. And on the other side was a doctor who would occasionally work these flexible shifts in the NHS and, you know, weekends or holidays. I, you know, want to get an extra share for a bit more pocket money. And whilst I knew there was a shift down the road, I'd have to call up my recruitment agency and get sent to Birmingham and, you know, turn up and get thrown the keys and told, you know, that they'd be back in 12 hours.

So it was January, a really poor experience and I needed a better way of doing it. Yeah. 

Sjoerd Handgraaf: [00:06:33] And so you said, Dan is your co founder, is he a more technical pers...

I talked to him about his time at Airbnb about his framework for evaluating which marketplace to invest in, why Shopify still has a lot of work to do with their new shop app. Why Neighbor the Airbnb for storage might just work, but most importantly, we talked about how to kickstart and scale a marketplace business.

I really enjoyed talking to Lenny and I hope you will as well.

Hi Lenny, welcome to the podcast. 

Lenny Rachitsky: [00:01:17] Thanks for having me. 

Sjoerd Handgraaf: [00:01:18] Like I already mentioned in the introduction, so you worked a long time at Airbnb. Nowadays, you read a lot about marketplaces. I'm curious what got you first into online marketplaces. I dug a little bit into your history and I saw that Localmind was maybe the first one.

Can you tell us a little bit about that? 

Lenny Rachitsky: [00:01:35] Yeah, you bet. So Localmind was a company that I started in 2010. I was working as an engineer before that for about 10 years, engineering dream manager. And I always had this goal of starting a company and it was randomly in Montreal visiting a friend at a conference, and we were talking in this idea for what Localmind turned into kind of spring out of that.

And so I moved to Montreal to start this company and stayed there actually for eight months and then moved to the Bay area. And with the company was all about, was. It was around the time Foursquare was really popular and everyone was going to check it in. And there's all this data around location and where your friends are at and where you're spending time.

And so we had this idea, what if, what if we could connect people that are at any place in the world with people that want to know what's happening there because everyone's got this phone in their pocket. There's a way to reach them. Now there's all this data about where people are and if they opt into, but if we could connect people at a place where people want to know what's going on at that place, and that's what Localmind was.

You open up the app, you choose a place that you're thinking about going to, and then you ask questions and we route it to somebody there. Right now that's check in on Foursquare, Google or Facebook or someone that knows a lot about the place and that's what it did. 

Sjoerd Handgraaf: [00:02:43] And then questions like, you know, who's deejaying or like what's on the menu?

Or like those kinds of things. 

Lenny Rachitsky: [00:02:50] Yeah. The most popular was like, how long has the line at this club? Is it busy at this restaurant? Or like, yeah, that kind of thing. And in the end we found it wasn't a big enough problem for people, so it wouldn't last as a standalone business. And that's how we ended up selling therapy and B.

But it was fun and it might be possible now. It might be worth trying to have some time. 

Sjoerd Handgraaf: [00:03:10] Yeah. What's your, something with Localmind, because it is a kind of marketplace, but was there something that you learned there that you still feel like, Oh yeah, that is a huge lesson that I learned there. 

Lenny Rachitsky: [00:03:18] I rarely look back at local.

Mine is kind of building a marketplace, but it definitely was, and we should probably spend more time on this, but I'd say the main takeaway is a marketplace, maybe like 90 I don't know, maybe 99% of the success of a marketplace is the same as the success of any business, which is just, does anybody even want this thing?

Is this actually solving a problem for anybody? And so with Localmind, we basically eventually realized this is not a big enough problem. People wanting to go out and really needing to know what was happening at a place. So most of the learning there is just how could we have earlier knowing that this is not a frequent enough problem for enough people and maybe just a course or not.

Sjoerd Handgraaf: [00:03:58] Yeah, because now while you were saying this, my question that was straight coming to am I like, okay, is there any other way you could have validated this without actually building a whole product? 

Lenny Rachitsky: [00:04:07] Yeah, maybe like we could have had text messages or something initially. But you know, it wasn't years of work and we built it pretty quick.

Maybe the other lesson that's interesting is one of the more common ways to build a marketplace and to bootstrap a marketplace is to piggyback off of an existing network. Like the way Airbnb allegedly is, Craigslist and Uber, and a lot of other companies use Craigslist. So what we did is we bootstrapped off of Foursquare's data.

We basically let you connect your four square account, and then we knew about every check in that you made, and as soon as you checked it on Foursquare, we had you. At that location in our app, and that made it a lot easier to scale. And with the work that I've been doing recently, looking into how the marketplace has worked, that's one of the more common strategies that worked back then and still works.

Sjoerd Handgraaf: [00:04:50] And then, so Airbnb bought Localmind Was it like an acquihire? Did you then straight move into Airbnb? 

Lenny Rachitsky: [00:04:57] It was not technically an acquire. They acquired the whole company. All of us went over except for one person who decided to do some different, and they bought us as a team and they wanted us to. Work on a specific need that they had at that time, which was based on, so at that point, the kind of the strategy of the company was focused around what was called snow white snow white frames, which there's some articles about this.

And the way that worked is Brian, the CEO over the holidays, red. Walt Disney's biography, and he learned as he was reading that, that the movie, snow white, was the first animated feature film. And to make that possible, they have to use storyboards in order to kind of map out the story. And when you make a storyboard, you basically map out the key frames of a story to understand where it goes and how it all fits together.

And what Brian kind of realized while he was reading it as a trip on Airbnb is just like a story that unfolds. There's a beginning, there's a middle, there's an end. And what he ended up doing is hiring a storyboard artist from Pixar to come work at everybody full time and to map out the story of an Airbnb guest and an Airbnb host.

And so if you go to the office at Airbnb on CDs frames on the wall, and it's something that folks look to when they're thinking about what to focus on, how to think about the user. And so this happened right around the time they acquired us. And the reason they wanted us to work at Airbnb is they wanted us to nail the, I'm out and about in a city.

What should I do? How do we make that experience amazing? And they wanted to make every one of those key frames amazing. At week. And so they acquired us, focused on that problem, and we ended up building something that ended up not launching later. But that's its own story. 

Sjoerd Handgraaf: [00:06:33] Yeah. So what's your journey within every MBA?

So you started with that then for you moves into growth. 

Lenny Rachitsky: [00:06:40] Yeah. So first we built that, then we moved into building a community platform for the host community. To help them connect with each othe...