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20VC: Benchmark's Sarah Tavel on Why Chasing GMV Will Lead To The Wrong Direction, The 2 Crucial Tipping Points For Marketplace Adoption, Why UGC Plays Are Like Marketplaces & How To Determine Between Existential and Non-Existential Risk

Nov 23, 2020

Sarah Tavel, General Partner at Benchmark and former Pinterest PM, shares her insights on the venture capital landscape. She emphasizes the risks of prioritizing gross merchandise volume (GMV) in marketplaces, urging a focus on customer value instead. Tavel outlines critical tipping points for marketplace adoption and explains how user-generated content can enhance engagement. Additionally, she discusses the distinction between existential and non-existential risks, offering valuable advice for board dynamics and effective investor relationships.

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ANECDOTE

Path to Venture

Sarah Tavel's interest in venture capital began after reading "The Vault Guide to Venture Capital".
Her diverse work experience uniquely qualified her for an analyst role at Bessemer Venture Partners.

ANECDOTE

Pinterest to Benchmark

Sarah Tavel joined Pinterest after investing in their Series A at Bessemer, drawn by the company's product and culture.
Later, she returned to venture capital, joining Greylock and then Benchmark, prioritizing direct work with founders.

INSIGHT

Existential vs. Non-Existential Risks

In high-growth startups, prioritize existential risks over minor setbacks.
Focus on core business aspects: CEO decision-making, customer satisfaction, growth, and runway.

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Sarah Tavel is a General Partner @ Benchmark, one of the most successful funds of the last decade with a portfolio including the likes of Uber, Twitter, Dropbox, WeWork, Snapchat, StitchFix, eBay and many more. As for Sarah, prior to joining Benchmark, she was a General Partner at another globally renowned firm, Greylock, where she led deals in Sonder and Gixo. Pre-Greylock, Sarah was the first PM @ Pinterest where she led three acquisitions, launched Pinterest internationally, and was responsible for closing their $100m Series C financing.

20VC: Benchmark's Sarah Tavel on Why Chasing GMV Will Lead To The Wrong Direction, The 2 Crucial Tipping Points For Marketplace Adoption, Why UGC Plays Are Like Marketplaces & How To Determine Between Existential and Non-Existential Risk

In Today’s Episode You Will Learn:

1.) How Sarah made her way from being the first PM at Pinterest to being a General Partner at one of the world's leading venture firms, Benchmark?

2.) What does Sarah mean when she says, "the small things are not the big things"? How does Sarah determine between existential vs non-existential risk? How does this impact the type of board member Sarah is? How has Sarah seen the best board members engage? Who are they?

3.) Why does Sarah believe that in marketplaces, chasing GMV will lead you in the wrong direction? How does Sarah think about good vs great when it comes to 1.) Average order values? 2.) Repeat purchase rates. 3.) NPS? 4.) Net revenue retention? How should they change with time?

4.) In marketplaces, what is a tipping point? What are the 2 crucial tipping points to be aware of? How can marketplaces ensure demand brings further demand? What can they determine from how demand engages with different suppliers? How does Sarah feel about feedback systems?

5.) Why does Sarah believe that UGC plays are like marketplaces? What lessons can be drawn from TikTok to suggest this? How does Sarah think about her biggest lessons when analysing the growth of DoorDash? What do many not see that is important to recognise?

Item’s Mentioned In Today’s Episode

Sarah’s Favourite Book: Pachinko: The New York Times Bestseller

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