Developing a growth model + marketplace growth strategy | Dan Hockenmaier (Faire, Thumbtack, Reforge)

Lenny's Podcast: Product | Growth | Career

Lenny Rachitsky

Technology, Business, Entrepreneurship

5 • 1.5K Ratings

🗓️ 9 October 2022

⏱️ 64 minutes

🔗️ Recording | iTunes | RSS

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Summary

Dan Hockenmaier is an expert on marketplace strategy and growth. He was previously the Director of Growth at Thumbtack as well as a partner at Reforge, where he co-created the monetization track. Currently, he is the Head of Strategy and Analytics at Faire. In today’s episode, Dan shares the building blocks of a growth model, important considerations when building your growth model, and how to get started. We also chat about retention best practices, the complexity of building a marketplace, the future of marketplaces, and when it makes sense to add a SaaS business to a marketplace, and vice versa.

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Find the full transcript here: https://www.lennyspodcast.com/developing-a-growth-model-marketplace-growth-strategy-dan-hockenmaier-faire-thumbtack-reforge/#transcript

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Where to find Dan Hockenmaier:

• Twitter: https://twitter.com/danhockenmaier

• LinkedIn: https://www.linkedin.com/in/dan-hock/

• Website: https://www.danhock.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• Twitter: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

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Thank you to our wonderful sponsors for making this episode possible:

• Amplitude: https://amplitude.com/

• Flatfile: https://www.flatfile.com/lenny

• Eppo: https://www.geteppo.com/

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Referenced:

• Reforge: https://www.reforge.com/

• Casey Winters on Lenny’s Podcast: https://podcasts.apple.com/us/podcast/how-to-sell-your-ideas-and-rise-within-your-company

• Faire: https://www.faire.com/

• Dan’s blog post on the future of marketplaces: https://www.danhock.com/posts/the-future-of-marketplaces

• Careers at Faire: https://www.faire.com/careers

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In this episode, we cover:

(00:43) Dan’s background

(04:01) What is a growth model?

(07:20) The building blocks of a growth model for your own business

(10:22) The value in building your own model

(11:12) The importance of retention over growth

(14:49) Getting started building your model

(19:18) The growth model at Thumbtack

(20:36) The importance of the early user experience for retention

(25:02) Why is a marketplace a good business?

(28:23) Health metrics for marketplaces

(33:47) Supply and demand, and why you shouldn’t neglect demand

(36:23) The role of ROI equations and how to use them

(39:16) Why you should tread lightly when working with marketplaces

(42:43) Expanding marketplaces

(46:50) How marketplaces can add a SaaS offering, and why adding a marketplace to a SaaS business is trickier

(49:47) When is there an opportunity to unbundle?

(54:43) B2B marketplaces

(56:36) What is fragmentation?

(58:46) The future of marketplaces

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Transcript

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0:00.0	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.
0:07.4	You have to have a very light touch.
0:09.2	Like if you're building a SAS business, you're a construction worker.
0:11.4	You're like building the product and the features and selling it and it's this very linear thing.
0:15.2	For a marketplace you're like messing with this ecosystem that you don't actually really understand how it works and
0:20.6	sometimes you might do something over here which drives this long-term effect two months later, and then you're going to be pulling your hair out two months later trying to figure out what you did over here that made that thing happen. And so I think that the main advice is like to tread lightly.
0:32.8	When you're messing with the core incentives or mechanisms in the marketplace,
0:36.7	be very careful, particularly if you got something that's working
0:39.5	on playing with those variables. Welcome to Lenny's podcast.
0:46.8	I'm Lenny and my goal here is to help you get better at the craft of building and growing
0:51.1	products.
0:52.1	I interview world-class product leaders and growth experts
0:55.0	to learn from their hard-won experiences
0:57.0	building and scaling today's most successful companies.
0:59.0	Today, my guest is Dan Hawkenmeyer.
1:02.0	I venture to say that Dan has worked on more marketplace
1:04.4	startups than anyone else in the world, including helping scale thumbtack in the early days,
1:09.4	currently working at Fair, where he's head of strategy and analytics, and through his consulting business,
1:14.6	Facis One, where he's helped dozens of startups figure out their growth models and growth strategies.
1:20.3	Dan hasn't shared a ton of his insights and experiences publicly,
1:23.4	so I was really excited to chat with him,
1:25.5	and to dig into all the things that go into building a marketplace business,
	...

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