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Benjamin Lauzier

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2024-09-29

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2024-09-29

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1. “We also saw that those pros weren't always great at converting leads into jobs. And so naturally we thought that we could provide a more consistent experience for customers and for pros by improving their ROI and selling bookings directly to those pros. It's a common sort of marketplace move going from some version of lead to a direct booking. And the great we knew we're going to improve the ROI by something like 20% maybe. And we launched this in pros hated it. They hated it because they actually subconsciously like they like the spill of the sale, right? They love this contact with customer and they sometimes like completely overestimated their ability to close a customer. They were like, you took all those phone calls. They kept me busy. I felt like I was like hustling. I was like about to close this customer. And so no matter what the data says, like, oh, we increase the earnings by 20%. The pros don't feel this way. And it's the right to feel however they want. And we saw the same.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “I think when you're running a marketplace, you tend to sit in your ivory tower a little bit looking at stats and thinking like, if only we could get people to do X, it'd be better for everyone, right? I certainly did that in my career. I think that's missing the point that we're humans. And I think sometimes we act in ways that are non-deterministic or counterintuitive. I'll mention other things like example, but like we originally sell leads to pros like plumbers and electricians. And of those leads, obviously only a fraction would turn into actual jobs.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “A level of curation, right? You need to be intentional about the quality that you aim to provide. And I think a lot of companies don't have necessarily that intentionality. And you have this constant push of supply if only we lower our bar a little bit, we could get more supply. And so until you end up, we've all experienced this at some point. You found like some e-commerce website, you look for something, and there is also like, oh my God, this looks super shady because all the sellers don't look that great, right? That's a quality problem, right? And so you need to be intentional about your quality. And I think that's another area where companies fail.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “So they run ads, they get clicks, they turn those clicks into dollars, and they try to get enough supplies so that intuitively the experience is good enough for users. And my advice is if you're doing this, you're missing out on half of your business. And the trick is marketplaces are very laggy. So once your network effects start to die down, it turns into this moment of panic of, oh shoot, we forgot about half of our users. We forgot that sellers are people too and they're all leaving. And now we need to completely transform our product to save the ship and to create a compelling value proposition on their side. So that's the other thing that I see is businesses realizing that they are marketplaces with like a true marketplace needs too late in the game. And the last one is quality. I think we talked a little bit about quality before, but it doesn't mean that you always need to have the best quality in your marketplace. But being a marketplace implies”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “I think a few things come to mind. One is this concept of liquidity that we've talked about, right? So you need to kick off this flywheel. You need to build enough of that density within your marketplace. And depending on a business, it can take a lot of time or money. And without the right diagnostic framework, you can end up running out of both. And so it's like that's theme one. And I felt this at Lyft. I've seen this at other companies, this like rush like, wow, we have to get to this point. Otherwise, we know it's kind of a losing battle until we have enough density for both sides to have a good enough experience. The other one that I see is ignoring one side. So we talked about doing that when you're sort of early on. But I see a lot of larger companies operating for too long as one-sided businesses. Many large marketplaces only thinking about their demand side.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “It's also like, ironically, it's almost the opposite advice that I usually give to companies who struggle with market health. And one of the checkboxes was a smoke machine. And it turns out a lot of people are checking this. They're like, yeah, Halia, I want a smoke machine in my wedding. And unknowingly to them, obviously, like only 5% of our DJs had a smoke machine. And so you would carve out like 95% of our supply. And if when we talk to users, they were like, I don't know, I don't care that much about the smoke machine. I didn't realize that like this was automatically going to remove half of the supply. And so work on ways to make this sort of checkbox affect the ranking but not the actual filtering is a great example of how you can listen to your users and tweak the experience. But simplify their cognitive load by knowing like, hey, we know you prefer a smoke machine, but we're intelligent enough for you.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “And I think the mistake is that you unknowingly fragment your supply in a way that has a much more meaningful impact on the health of your marketplace than you suspect.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Forced in this standardized experience, we're going to compete by giving you the choice. You get to decide the experience that you want. I think in reality, it just fragments your marketplace even further, right? And you have this like hyper fragmentation of your marketplace. And I think it hurt their SLAs quite drastically. If you think about ETA, when you ask explicitly, you're like, yeah, sure, I wore a new car. And you slide it to like 2020, not realizing that you just lost like 10 minutes because now we had a great driver, but they have a Honda Civic from 2018. And it's not the special that you wanted. So I think people who build marketplaces tend to want to give a lot of control to the users because this is what users want or this is what comes up oftentimes in user feedback. Like, oh, we have those two distinct group of users. Those ones, they really want new cars, those ones they don't want new cars, right? And so naturally you have a product team that builds the toggle to get new cars.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “Have a great example of that, but I can give you a tangentially related example of a marketplace that I don't want to throw anyone on the bus. Respect the company and the effort. But Sidecar at the time was another redshift company competing with Lyft and Uber. And there's, I'm sure, a whole bunch of sort of lessons there. They ended up sort of closing. But I think one really interesting direction that they took pretty early on to differentiate themselves was, in my mind, perhaps very naively a mistake, they decided to give complete control to the user, where as a user, you had a whole bunch of filters, you could decide like, I want a card that's at least like 2015 or newer. I want a driver that's at least like, you know, this or newer. And so I think the theory was sort of reasonable on paper. It was like, hey, let's give people like more control over it. You have those other players out there. You have Lyft and Uber and people feel sort of.”

   2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “Mix for like a very fuzzy definition of supply, and you have very different set of needs. Like one electrician wants something, the other one has a very different perception of the same unit of demand, right? And that makes it very, very difficult. So it's feasible, but I would say that is not a compelling attribute for building a marketplace. So a relatively form sort of set of needs. And the last one I'd mention is a high enough bear in the matchmaking or the creation. I think how hard it is for people to find each other today and how much effort did they have to put in to vet each other, I think is another great sign. If it, the higher it is, like the bigger the opportunity, right? Because it means like you come in, implement the right processes to simplify this sort of like this exchange of value.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “No one ever says, like, oh, I'm going to build Airbnb for X, right? It's not something that people say. I think the signs that come to mind are one high fragmentation. I think you want this long tail of buyers and sellers without a handful of big players controlling the market because this is where you can provide value by doing this job of aggregation. I think you also want a relatively uniform set of needs. That means that it can be like your supply can be commoditized to some extent. This is what's so tricky, by the way, about services, service marketplaces like SemTack. Because unlike eBay where sellers, they just want to sell very clear and distinct inventory. On SemTag, you have electricians who only want certain types of jobs, but they only want it if they're available that day. And they might take a job and cancel it because something better comes up.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “I think go to the heart of how valuable is your solution to users. And you can do this on the supply side and the demand side. Then to hear more advice, my advice is typically like to consider that you have two product market fits, essentially. You want to make sure that you have like a compelling enough value proposition on both sides of the marketplace. And very often at the beginning, you find product market fit on the demand side, but you realize like it's not compelling enough for your suppliers because your margins are too high or something like that. So realizing that you have like both those things, but I think you can measure them in a way that's relatively traditional and that's independent of marketplace sort of dynamics.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “It's hard because to me, the two are almost independent. Maybe this is a hot take, but I feel like product market fit is independent of your marketplace dynamics. You might have a great product and it provides amazing value to both sides. But you have yet to crack the flywheel on the supply side for how to bring those people. You don't have the right product channel fit, for example. And so this will have a massive impact on the dynamics of your marketplace. And so to me, my answer would tend to be pretty classical. It would be like, you know, measure your product market fit the way you would for a normal company. So like you have, you know, unlike the, it's a bit of an art more than science, but I like the classic, you know, like if we were to take this product away, you know, like what percentage of users would be significantly disappointed or have no other solution, right? So questions like this.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “That you can predict. That's a metric that's so much more actionable for teams to work against. If you're a supply team now, you can think of, okay, I'm adding 100 supplies onto the platform. I want to know what if it's actually reducing ETAs in this case. I can look at correlations like this and limiting some of the effect of those exhaustions factors that I mentioned.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “Basically, think of your proxy that is the best predictor of your liquidity. So I'll use the example of Lyft. You have your liquidity is your dementization, it's how many app opens turn into a ride. And what predicts this, right? Like what will predict you deciding to book a ride for Lyft and for Uber, it was ETAs. So we knew that if we had, if the closest driver was at least three minutes away from you or closer, then we had hit a ceiling. You were more than like X percent likely to convert and book a ride. If it's more than three minutes, if it's five, then maybe you check out Uber, maybe you walk, maybe you take the bus. If it's two minutes, it doesn't make a big enough difference. You're just going to book the ride anyway. So find this threshold. Find this sort of predictor that tends to plateau that correlates strongly with retention, but with also sort of the transaction happening. And that's the metric.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “I think the metric that I like the most is sort of a predictor of liquidity. So your liquidity might be typically a measure of demand utilization, right? Like it might be looking for something on Airbnb, like how many of those searches with intent actually turn into a transaction. So it's your field rate of your intent full demand typically. And that's really indicative of the net output of your marketplace. And so that gives you a sense of the health of your marketplace. But it can be influenced by a whole bunch of different factors, right? So if you think about, you know, for Thumbtack, it can be influenced by if there's a snowstorm out there, if like the competition is bidding, there's a whole bunch of exogenous factors that come into play. And the metric that I think is steadily more actionable is a little harder to define, but so much more helpful in my opinion. It's what I call like a market health metric. And this is.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “We talked about them. It might be for all the people who opened the app with the intention to book a ride, how many of those actually turn into a ride. And this metric, liquidity, it's a direct multiplier on the efficiency of your marketplace. It's literally at the center of your vision. It's what you exist as a marketplace. It's to connect the two. And it's also the ultimate engagement loop, the more supply you have, the more choice people have, the better the service is, the more likely it is that it turns into a transaction, and the more likely it is that they come back. And so it's really this incredible sort of circle. And what I see is people sort of missing how critical this component is in the marketplace, struggle to define it for the business, and most importantly struggle to build like an actionable playbook against it. Like, okay, like, how do I manage this? Okay, it's important, but like, what do I do about it, basically?”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “Exactly. And then I think there's a different set of challenges. I think another, like the other pitfall that I see is, so pre-product market fit, people tend to be distracted by those marketplace dynamics like we talked about instead of doing what we just talked about. For companies that have some sort of scale and product market fit, to me the place where I see people getting tripped up most often is the concept of marketplace liquidity or how to manage the health of a marketplace. To me liquidity is how marketplaces win, right? It's this measure of your ability to match buyers and sellers efficiently, right? It's how quickly and efficiently people can find what they're looking for on your platform. So you can picture a Venn diagram. One circle is this is what supply wants to sell and another circle is this is what demand wants to buy and your liquidity is the overlap between those two circles, right? So for let's take the example of Lyft or Uber.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “And it's a different audience, you would think that the lyft sort of passenger and driver is sort of a more likely to like flip back and forth between the two. I don't know. I don't know.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “Yeah, exactly. In our case, that lived early on, we had a waitlist on the demand side because we just couldn't onboard enough supply. And so we had this idea of having a pop-up instead of saying no drivers available. It would be like, hey, sorry, all the drivers have taken. Do you want like people are making 50 bucks an hour right now? Do you want like hop on your car and drive? And we had some conversions, but it felt a little distracting to the overall experience and it wasn't like a huge driver of supply. But I know that for Uber, it actually was. I think they had like a non, like a relatively meaningful amount of supply coming from.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “Yeah, I think there's a couple of common tactics outside pretty early on that I think companies rely on. So we've talked about jump starting one side of the marketplace with Airbnb, with FemTech and Lyft also leveraged job boards. You have also a lot of companies like building value-added services pretty early on as a core way of retaining supply pretty early on. Let's build a really compelling basket of value for the supply. And this is going to be like the thing that appeals everyone. So like OpenTable did this really well with like all the restaurant services, other things that I've seen people use really well early on or converting your supply into demand or demand into supply pretty early on. So we tried that. It actually didn't work at Lyft, but I know other markplaces have been like pretty successful. With that”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “Yes, I would say supply is the hardest side, maybe like 80 to 90% of the time. I totally agree. I was trying to think of like counterexamples, but I can think of one. I just know that there are.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “In general, I would say in 2DV, like the teams know, like especially the teams are in the weeds, they know, they know, yeah, we can get X. But what we really struggle with is getting students to look at this, right? That's sort of your sign. And I think sometimes it takes someone else to like make you think about it to reflect, actually, yes, you're right. Like this site is obvious. We know how to get it. We just don't have the right supply for it and we don't know where to find the supply. Boom, that's the site that you should be focused on. that then find a way to add source your demand, subsidize it, find some other way, and like focus on this side that you have no idea how to grow. You should have a reliable growth strategy for the site.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “Way you worry around the core, you worry about the core value proposition of can we get people to come back to a platform? Can we create this delightful exchange of value? Are people trusting us? Do we have the right checks in place to make sure that you are hiring the right person? What will make you come back? And once that's done, then you can focus around how do I build a flywheel in the supply side and how do I manage and how do I make sure I have enough plumbers for per market or something like that.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “Hardest side is sort of my advice. And then how some companies sort of do this again. I think there's a lot of different ways to do this, but a common advice is find a way to jumpstart one side, right? Find a way to hack one side, play one player mode is what is also called sometimes. But try to find a way to tap into existing channels that have one side of your marketplace already latent. And so again, you have countless businesses that have been built off of Craigslist. I think Femtak was partially one of them. And the idea was like, hey, like, we can find all those great pros on themtack. When we have someone who wants a job, oh, you want your kitchen remodeled, we can behind the scenes go and post a job on Craigslist. And then we'll bring on all the contractors who are like browsing Craigs looking for a job. We'll bring them to our platform. That's an example of how, you know,”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

26. “Said to focus on is different approaches to this, but generally people will pick the hardest side. And so if I'll take the example of FinTech because we're going to talk about it. So FemTech is a home services marketplace to help you find plumbers, electricians. And the harder side there was demand. There's supply. You can sort of look for, you can open the yellow pages. You can find plumbers somewhere. But the hardest question was, can we go out there and can we find people who want to do something in their house, who have projects that need to be done? What is the core growth strategy for us to acquire those people to find them? And what kind of retention can we create? Can we create a delightful experience for them to come back to our platform and want us to take care of the home for them?”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Pretty early on to jump start the growth as just countless examples. But don't get distracted by this shiny and cool sort of intellectually challenging idea of working in a marketplace and nail the basics of your product market fit at first”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

28. “I think there's two types of challenges, I guess. When you're talking about creating a marketplace, and then there's when you're talking about scaling a marketplace. For creating a marketplace, I see many founders that are pre-product market fit, super eager to nerd out on Marketplace dynamics. They're super excited to launch a marketplace, we all are. And they want to talk about supply and demand. They want to look at all kinds of ratios. They want to show me economic papers and ask, like, how could we apply this principle to my company? And here my advice is generally always, if you don't have product market fit and if you don't have a good enough growth strategy for at least one side of your marketplace, just forget about all this marketplace stuff, right? Focus on this core exchange of value. Go deep with one side of the marketplace and see if you can rely on some crutch, some hack for the other side for the time being, right? And you see companies like Airbnb and Themtak doing this with.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

29. “Totally, yes, yes. And I think, again, like you have companies that claim to be sort of managed marketplaces. I think depending on how you want to look with investors, perhaps, you'll pick like one angle or the other. But that's where you get into like, you know, sort of gray waters. But yeah, the markbuzz implies this concept of two independent and supposedly autonomous parties that you sort of help connect and provide this exchange of value for them.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

30. “I mean, like you mentioned, I love marketplaces. I think I've been building and scaling marketplaces for, I think almost 15 years now. I feel like the ad's just such a fascinating dimension to the challenge that we work on as PMs. It's this hidden dimension that you uncover when you work on markplaces. And I think on paper, what makes the markplace is pretty straightforward, right? It's two or more sides that are distinct from one another, and they provide value to each other. And then you have an intermediary trying to facilitate that exchange of value in the middle. So that's pretty simple sort of explanation. I think in practice, it's always a little bit more nuanced on the fringes, right? You have all those interesting dimensions like how involved is the intermediary defines how managed the marketplace is. So something like Craigslist is super hands-off, unmanaged, and something like Lyft starts to be more into the semi-managed where the platform significantly shapes the transaction and this exchange of value, right? So I think that's how I see it, but there's all those sort of like fascinating variations of marketplaces, I guess.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source

31. “I think when you're running a marketplace, you tend to sit in your ivory tower a little bit looking at stats and thinking like, if only we could get people to do X, it'd be better for everyone, right? I certainly did that in my career. I think that's missing the point that we're humans. And I think sometimes we act in ways that are non-deterministic or counterintuitive. But my take is I'm a huge believer in market forces and empowerment. Provide guardrails for what a good experience is in your marketplace. Set a clear bar for quality and provide the right coaching and tools for supply to be successful. And then take a step back and see where the gaps are and invest more in hands-on tactics just to close those gaps more specifically.”

    2024-09-29 · Lenny's Podcast · How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge) · IDENTIFIED FROM THE TRANSCRIPT · source