Lenny's Podcast: Product | Growth | Career

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

Oct 9, 2022

Dan Hockenmaier, an expert in marketplace strategy and growth, shares his insights from leadership roles at Thumbtack and Faire. He discusses the importance of constructing growth models based on first principles, with a focus on customer retention as a crucial metric. The conversation dives into the complexities of managing marketplaces, balancing supply and demand, and the evolution of vertical marketplaces. Dan also highlights strategies for startups, emphasizing the significance of understanding customer dynamics to drive sustainable growth.

01:04:05

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Episode guests

Dan Hockenmaier

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Quick takeaways

Demand is the currency that matters in marketplaces, and aggregating and satisfying customer demand is crucial for marketplace success.

Key metrics to evaluate the health of a marketplace include GMV, unit economics, liquidity, and share of wallet.

Marketplace decision-making requires considering the second and third order consequences, understanding core incentives, and managing the marketplace ecosystem with a light touch.

Deep dives

The Importance of Balancing Supply and Demand in Marketplaces

In marketplaces, both supply and demand are important, but there can be a tendency to over-focus on supply. However, demand is the currency that matters as aggregating demand is essential for marketplace success. Acquiring supply is crucial, but it should always be framed from the perspective of the customer benefit. Ultimately, the health of a marketplace depends on its ability to aggregate and satisfy customer demand.

What Is Fragmentation in B2B Marketplaces?

02:09

Inflecting Early User Experience for Improved Retention

01:23

Experience in Consumer Marketplaces and Strategy Consulting

01:50

How Do You Track Your Marketplace Health?

01:17

Intro

2min

Amplitude's Growth Strategy and Evolution

4min

Constructing Growth Models for Business Success

9min

Building Growth Models from First Principles

2min

Building a Growth Model for Startups

10min

Navigating the Metrics of Marketplace Success

5min

Marketplace Dynamics: Balancing Supply and Demand

21min

Navigating Vertical Marketplaces and Customer Dynamics

11min

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.lennysnewsletter.com/p/developing-a-growth-model-marketplace

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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/