Speaker 1You built a company that is worth $20 billion, but just put it out in perspective, that is more than if you add up the entire market cap of Wendy's, Under Armour, Hertz Rental Car, Harley-Davidson, American Airlines also. Isn't that bananas when you hear that? Yeah, I think it's absolutely nuts.
Speaker 2I feel like I can rule the world. I know I could be what I want to. I put my all in it like no day's off. On the road, let's travel, never looking back.
Speaker 1What I find interesting about you is that you went from a kid who was working in a deli, almost failed out of high school, to now you've built a company that is worth $20 billion.
Speaker 3In all honesty, I try not to focus on the number because if you focus on it sort of scene, zip, scene, and then you're like, well, I've done a lot already, I'll pat myself on the back. But I think we're pretty early in what we're doing. And so I just try not to think about it and just sort of look at the problem ahead and put one step, one foot in front of the other. And yeah, we started this thing six and a half years ago. There's still a lot of work to do.
Speaker 1Yeah, I remember because you may not remember this, but we were on a phone call and I was like, hey, this is a great idea. I'd love to invest. And you're like, I don't know, we got like kind of, it's already full. And I was like, oh, but I'm such a great guy. And then you were like, we'll see. And I didn't follow up. And that not following up cost me, cost me dearly. I actually do remember. Say more. I wrote it down in my diary that day. Grant, what happened from your perspective? Yeah, yeah. You tell the story. You tell the story.
Speaker 3Yeah, so what happened? I mean, whenever you're like one of the, like, we've had rounds where we've been a hot company and we've had rounds where we've not been a hot company. Sort of like seeing the full spectrum of things. And once the rounds closed, all we really want to do is go back to work. So I remember talking to Sean and, you know, I'm like, oh, I should probably follow up with him. And then I just got busy with work and didn't. And I think I, like in my head, I sort of felt bad because I think I should have done something, but I don't know.
Speaker 1Well, listen, I've been a fan. I was a fan before. I'm still a fan now. Now I'm just a bitter fan, which is a unique place to be in. And we should explain what the company is, right? You're the founder of WhatNot. What's amazing is you've built a large company in a space that I think most people would have found very small and unusual. It's almost like a stack of unusual behaviors. We'll just give a kind of quick summary, which is if you open up WhatNot today, the app, you will see people selling all kinds of things. It started off with collectibles. And, you know, like these little Funko, Funko dolls and then opening up packs of cards and stuff like that. But now you can buy anything. I, Sam, I don't know if you know this. You can buy crazy shit on WhatNot. I bought a crab this morning. It was like a fisherman fishing. And he's like, oh, I got these crabs. And then he's like, you can buy this crab right now. I bought a crab. He's like, great. It's going to be sent in the mail to you. Congratulations, Sean. And there's a crab coming my way now. And that's, I don't know the crab coming in the mail.
Speaker 3The seafood's incredibly good, to be honest. Like I actually eat it. I eat it like very regularly. It's my favorite category.
Speaker 1It better be because I've told my wife I bought internet crab. And I don't know if she wants that to be in the house, but I got internet crabs coming my way. You saw where it came from. You don't know what you're getting if you go to the supermarket. That's true. That thing came off the boat. The person who was doing it, their profile shows like how many they've sold. And it says 3,300. Her username's a shout out to I Love Crabs. So I Love Crabs. She sold 3,300 crabs. And 3,300. Yeah, this crab pack I bought, whatever, it's $34. She's made over 100 grand selling crabs on the internet. Like this is unbelievable. Yeah, last week I had a full crab boil brought to you by whatnot. I can't tell if Sam is dumbfounded or his internet connection has dropped. He's made the same face for the last 30 seconds.
Speaker 4I want crab, but I don't understand how on earth you could start something like this because a marketplace like this seems like probably the hardest business to start. I think marketplaces are probably the most durable and also the most... The most challenging. And when Sean originally told me this idea, it might have been four years ago. You might have been two years in. I'm like, yeah, that sounds cool, but these are impossible. How did you get your first, let's say, 1,000 sellers to even use the thing? Because I'd imagine that's harder. Sellers, not buyers.
Speaker 3Yeah, I mean, in the early days, it was all sort of hard. I think for us, the reason we did it is because me and Logan, who started it... I think we did it because me and Logan, who started it, we'd only ever spent our careers in consumer internet and working on two-sided platforms and marketplaces. So the idea of starting a B2B business sounded way more painful than starting a consumer marketplace to us just because of what we knew. When we first got started, we didn't even have the live component. And so we had to get immensely creative. And so initially, we had a value prop of we'd authenticate whatever was sold.
Speaker 1Can you do it like a movie scene? So you and Logan, you're sitting somewhere, you have an idea. Who says the idea? Where are you? What happened? And then how long from there to the first go live?
Speaker 3So there's sort of like two founding stories, depending on if you talk to Logan or you talk to me. They're both technically true. So I'll go back to the first one because Logan will be annoyed if I don't tell it, which is Logan and I are in Japan over the holidays. And we were both sort of fed up with our jobs. And we'd both built companies before. So we prefer to sort of focus on building things. And we're drinking in a bar in Tokyo. We're like, let's start a business. And we're like, let's start a business. And we're like, let's start a business. And we bought like 50 domains. And we knew we're going to, we're like, let's start a marketplace business. And we bought all these like random domains.
Speaker 1Did you have an idea or just straight to the domain?
Speaker 3You know, you're drinking in a bar. And so it's like one of our initial ideas, which we did actually sort of do for a couple of weeks, was we'll build like a better full service Craigslist, which is a horrific business idea, by the way. But that's what we initially started with.
Speaker 4That's like in the, in like the starter pack of entrepreneurs. It's like Craigslist is so ugly. I could do better.
Speaker 3Yeah. The, the economics just don't make any sense. Right. And so you're selling all these used goods that are basically worth nothing, but you need to be able to, you know, spend a bunch of money in order to make the user experience of Craigslist better, like be able to do. So, so sort of like, I'll give you an example.
Speaker 4I've talked to hundreds of entrepreneurs on this podcast, and I've got a bunch of takeaways, but one of the big ones, one of them that shocks a lot of the people out there who are product nerds, which frankly, I am myself, is that oftentimes in order to turn something that's going kind of good into something that's absolutely amazing is to fix the marketing, not the product. And in particular, fix how many people know about the product. That's like the big thing. It's called attention. Say it with me, attention. And so the team at Starter Story, they put together a free guide. They call it the $1 million attention guide. It's this pretty amazing 39 page document that's filled with 15 tactics to get eyeballs on what you are building. And so there's a, even a 30 minute recording from Pat, who's the founder of Starter Story. He has interviewed hundreds and hundreds of entrepreneurs. So he's able to put this together, do a bunch of research and experience. And so if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here.
Speaker 3You know, we're in Tokyo. We buy these domains. Some of the domains are like random domains we're going to use to like SEO hack, like used Peloton and you know, you name it. Like we have like 50 domains. We were sort of growth hacking our way into the business, even not at that stage. So anyways, then it comes to sort of like fall of 2019. And we were sort of like, all right, we're going to make the plunge. Logan, Logan left his job, started to work on, on what became whatnot. And the, the early division of labor was sort of like, Logan's going to build it and then I'm going to like do everything else. And so we're like, all right, we're on the full service craigslist. And one of the bits of full service craigslist was going to be like, we're going to be able to do deliveries. And so I'm like, all right, let's go figure out. I did like the envelope on, you know, on an app can be like, yeah, maybe they're there, they're there. And then I start calling all the delivery companies. So I go on LinkedIn and I LinkedIn all of these people who, um, run delivery businesses, like the guy who runs delivery at Bob's discount furniture, the guy who runs delivery at like all these other companies. And I take calls with me. I'm like, how much does a delivery cost at scale? And so like how much is each leg and how efficient is it? And they were nice enough. They, they sort of told me and with, after doing two of those calls, like this just doesn't work. Like the cost per delivery relative to the value added on the used item. Is just, there's no margin there for the business. Then I'm like, oh shit, need to find something else to do. And at that point in time, it was Logan. We brought on, um, an engineer already and then we had half a designer. So the team was sort of like three and a half
Speaker 4people. Can you give a little perspective to your financial situation? Cause we have a lot of entrepreneurs to listen, but we have a lot of people who want to start. So like you're talking about hiring, uh, people already. Did you have funding or did you just have like a hundred thousand dollars saved up? What was your financial situation to do that?
Speaker 3Yeah, probably, I don't know, hundred, $200,000 in the bank, not including my 401k.
Speaker 4Did you wire that over to the company and you're like, all right, now we have $200,000. That's what we can hire with.
Speaker 3Check by check. You know, I just started to go like, I, the, the, the implicit agreement was I'd be willing to spend up to that amount of money doing the business, uh, before we raise money. And so like what we did early on. So our first engineer was actually based in Brazil. It was a guy that Logan used to work with and had known really well, who was, who was like super talented. And he was like, I'm going to hire you. I'm going to hire you. But, you know, he's in Brazil and so it's, it's much more cost-effective there. He's kind of difficult to work with. So he's, you know, he's like really talented, but really challenging to work with. So you can get them on the cheap and then you give them some good equity. And then the designer, we just gave him equity. We're like, do the branding, do all of our designs. We'll give you equity in the business, which obviously has, has turned out well for, for both of those folks. And so, yeah, we're, we're sort of doing that 24 hours until like. like doing diligence on delivery costs, like, oh shit, We have to change this business. And by the way, they're building it. So we have, even to this day, we try and have an immense bias to action because you just learn things by doing things. So even if you're wrong, as long as you're willing to admit you're wrong and then change direction, it's totally fine. So Logan and Gustavo were building the back end, like the order system and some of the front end and go, everyone, hey, everyone, I don't think this idea is going to work. I'm going to try and find something else. Like, it's okay. We can, we got to build a payment system anyway. So as long as we're doing a marketplace, we'll keep building. So we're like, all right, yeah, we'll still do that. And then I was just going around the internet looking for other marketplaces that I thought were really broken. And I kept coming back to eBay, which is, you know, back in the day, I used to sell on Yahoo auctions and eBay. It was like prepayment processing online. It was Pokemon cards. And so- You recognize this bad boy?
Speaker 1I don't know if you can see it.
Speaker 3Is that the holographic chancy?
Speaker 1It's a holographic chancy. This is your- You guys did your diligence. I bought this off of you. 20 years. 20 years ago, our paths crossed. I bought this for $10.
Speaker 3I remember that $10 money order. Definitely one of those, like, making money is the first time when you're a kid and like- The best. Something special about that. Yeah. So I kept on, you know, going through marketplaces and coming back to eBay and then like everything that was trending on eBay was collectibles. And I could see all my friends were getting back in the collectibles. And then me and Logan start making trips to all of the comic book shops in LA. And they're like packed. They're full of Funko Pops. And so I go, everyone, I got this amazing idea. We're going to go and change and build a collectibles marketplace. And let's focus on Funko Pops. And here's all of the reasons.
Speaker 4Well, what were the reasons? Because the way that you're describing this is very unsophisticated. And maybe it was that unsophisticated. Because, like, if a normal person, they'd be like, well, eBay seems like they're doing collectibles pretty good. Like, a marketplace is- I would imagine all about liquidity, meaning the perfect amount of buyers and sellers. And there's stuff there. And so, like, what was the metric or the signal where you said this is actually attainable? Or was it just, I want to build a business. This might work. Let's just see what happens.
Speaker 3It was probably a little bit of both. The initial sort of data or research we used to inform it was, at that point in time, you could pull the sales by every single category on eBay. There was a tool. I think it was called Terapeak. And we went across every single collectibles category and plotted the sales and collectibles through time and how it was growing. And every one of these categories was, like, going gangbusters. So, there's clearly a broader trend happening in the market. And when you looked at it then, there were more Funkos being sold on eBay than comic books, which is one of the reasons we ended up choosing Funkos over, say, comics or a bunch of the other categories. It was between Funko and Pokemon were the first two categories. So, there's demand.
Speaker 4There's demand. People want to buy used Funkos.
Speaker 3Yeah. There's huge demand. And then the sort of taste element of it was, we just felt like the product hadn't changed in 20 years materially. And it felt like it should. And when we thought there was something around social, we didn't really know what it was. But we just sort of felt there was a, with sort of this broader trend in collectibles, which was really driven by people our age who had money. And we just felt like we were getting back into things that were nostalgic from childhood. And the fact that there just hadn't been a lot of innovation in the space that probably should have had more innovation. And we could sort of squint and imagine there's a much better social experience around this, where you discover new things, where you chat with people that were into the same things as you. And then, yeah, we just took a leap of faith. When we started the company, one of the things we always said is we're not a sort of vision-driven company. We're a user-driven company. So, we were never beholden to, like, our idea needing to be, like, the best. The idea, we were always going to try the thing, make sure we were building a great user experience. And if users didn't love it, we were always willing to just change.
Speaker 1Why do you think that's important? Because I think, you know, the media, movies, TV, magazines, they love the visionary founder, the one who saw it before anybody else. And it's sexy. As the founder, you also want to be the visionary founder. And the most iconic founders, you know, Steve Jobs was, you know, I would say that was, like, the attribute that was associated with him was this sort of, like, taste. You know, people don't know what they want, but I will see what they want. I know what I'll do. I'll put 1,000 songs in their pocket, that sort of thing. Why do you think it's important to kind of highlight the other way?
Speaker 3When we said we were sort of a customer-driven versus vision-driven company, it didn't mean that we didn't think there wasn't any value in having an idea for how you want to build the future. You have to know which direction you're heading in. It was more of this idea, though, that no matter what it starts and begins with the customer, if you have this amazing idea that you want to build the future, you have to know which direction you're heading in. If you have this amazing idea for something and customers do not want that, you're dead to rights. And so if you're thinking about, you know, stack ranking these things in terms of, like, what matters and what is of greater importance, of course it's the customer, no matter how great your vision is. And I think, you know, one of my lessons that's been even more solidified from running Whatnot is stories are sort of BS. You know, a lot of stories in terms of, like, business. Are really a mechanism to convince people to follow you versus something of, like, real substance. Like, the things that matter actually have much, much, much more depth to them.
Speaker 1And so I think the, you know, the visionary founder just sounds good. What would be an example of a kind of popular myth, but the actual substance is something different? What would be an example?
Speaker 3I'll give you some in the context of Whatnot. Or things that just, like, in the early days sort of feel better. But actually, if you dissect these things, they sort of work in a different way. So one of the things, like, really early on with Whatnot was investors were very nervous to invest in a Funko Pop company. So there was a point in time when we launched our first live auctions product. And, you know, we're growing, like, 100% month over month. And we talked to a lot of the, you know, the well-known investors. And they're like, Funkos, I don't know about that. That's a small market. You know, investors want to invest in these. Big, giant markets. And look at how big Apple is and Google is. But the reality is when you dissect history, all of those companies started in an incredibly small area. And almost every great company starts in an incredibly niche or small area and then takes that and catapults it forward. Because if you're a four-person company like we were in the early days, you can't compete in a mass market. It's almost impossible to drive a ton of consumer value in a mass market. So instead, what you have to do is you have to compete. In a small market, build a really great user experience for a smaller subset of people and then expand outwards.
Speaker 1Isn't that how eBay also started? Like, it wasn't the first thing, like a Pez dispenser. But then wasn't it, like, weren't they also very niche at the beginning?
Speaker 3They were incredibly niche. I think that the real story from what I've gathered from folks. So there's two founding stories there, too. One is allegedly made up for PR, which was the Pez dispenser one. The real one was, like, the first item sold on eBay was a broken laser pointer. Sold to a broken laser pointer collector. And the PR just didn't want. eBay to be known for, like, broken junk. And so, you know, told the Pez dispenser story. But, yeah, if you sort of, like, there's a lot of these things that, like, at first service value, a thing sounds good. But actually, there's a lot of specificity to doing it right. So don't go after big markets. Don't hire big, fancy executives. Don't necessarily hire people because they've worked at big, fancy companies. There's all these things that sort of, at surface level, sound good, which are actually largely incorrect.
Speaker 1The PayPal story is kind of like this, right? So you have Elon has his vision for X. And he's like, it's going to do everything a bank does on the Internet. It's going to be, you know, lending. It's going to be mortgages. It's going to be checking accounts, savings accounts. That's what the vision was for that. And then here was PayPal, this little tool for eBay sellers. You know, it's like this kind of the niche within the niche. And he kind of resisted it, actually, for a little while. And then they finally kind of gave in. And it was like, well, that's what the users. That's where the demand is. That's what the users want this war. And like, of course, now PayPal can do a lot more than it did when it started. But it went after that very small market initially and finally rejected the founder vision idea going in.
Speaker 3There's always exceptions to the rule. So I never say, you know, definitively, that's the way to do it. But I can tell you in that every consumer success case that I'm aware of, the pathway looked like that.
Speaker 4I'm looking at the March 2020 web archive. I think how. How into the company are you in March 2020?
Speaker 3It's like four months in.
Speaker 4Okay. I'm looking at the website on web archive. It looks pretty good. It says browse fandoms. So I guess that means like different niches of Funko. So you can look at sports, Star Wars, Rick and Morty. And if you click on it, I'm not sure if it will show you, but it looks like you have sellers on there. You're only four or five months in, but it looks like a lot of sellers are on there, actually. And it even has staff picks. Like you guys are curating some cool ones. How many sellers were actually on there and how did you convince them? And also feel free to admit if there's any black hat tactics there. There's a statue of limitations. Yeah.
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Speaker 3the agentic customer platform for growing businesses. There's some unique tactics at play. I think by March 2020, we probably did have in the hundreds or maybe a thousand sellers at that point. So the way we got things going is, so classically with a marketplace, you have a chicken-egg problem. How do you get sellers if you don't have buyers? How do you get buyers if you don't have sellers? So the way you solve that is you solve for one side of the equation. And so we were initially the seller on whatnot. And so all of the early inventory was us. Now, obviously we can't own 28,000 Funkos. So what we did is we would go and authenticate them. And by doing that, that gave us additional value to add to the customer. And then we would, when someone would purchase them, we'd go and buy it from a number, like a certain number of people. And then we'd go and buy it from a number of people. A hundred different stores online. I had like a team of people in Brazil who would help me hunt down the right Funko Pops.
Speaker 4Oh, so they didn't exist then. It was just photos of them. And you're like, but I'll go out and find them and I'll buy them.
Speaker 3Yeah. I mean, it was a little more, you know, there's a little bit more to it than that. So one of the things that we did, I don't know, there's like 100,000 Funko Pops out there. It's like an obscene number of Funko Pops. And so you do have to be able to secure them and secure them at a reasonable price and be able to price them at a reasonable price. And so we did that. And so we ended up having to build like a pricing algorithm. We basically scraped all of the sites that had various Funko Pops and then looked at the amount of liquidity in each version of the Funko Pop. And based upon like, we'd sort of set a liquidity floor, because if that thing had like one liquidity, you know, one sold over a 90-day period, you're never gonna be able to secure it. I forget what the liquidity floor was now, but let's just say you had to sell 10 over a 30-day period. We'd use the past 10 years to secure it. And so we'd do that. And so we'd do that. And so 10 sales plus the amount of liquidity per item to then be able to price it at a reasonable price such that we could then go and resell it authenticated and then make sure we could actually secure it from one of the sites. And then did you buy Google ads for the buyer?
Speaker 4Were you buying Google ads or posting on Reddit or something to get the buyers?
Speaker 3There's two tactics that we initially used. So tactic number one was we partnered with a bunch of the Funko Pop influencers on YouTube. So I can remember in December calling up every Funko Pop influencer and they're like, who is this company? I don't trust you. I found someone that I knew from prior world to work with. And that was sort of the starting place. So that was tactic number one. Then tactic number two was we built this sort of viral Funko pop giveaway mechanic in the app. So if you're into collecting anything, the thing that you most want to collect are like the grails or the chases. So if you're into sports card, maybe that's, you know, rookie tops, chrome, LeBron. If you're into Funko, maybe that's like the Tony, the tiger flock Funko Pop. And what we would do is once a week, we'd give away like a $500, a thousand dollar Funko Pop. And in order to be able to enter, you would have to share it. And, and we, sort of built these mechanics where you could sort of have like unlimited sharing. So someone could sign up with your referral link. Someone could sign up with your code. You could share it on Twitter. You could share it on Instagram. And each time someone used your link or your code, they would get an extra ticket in the raffle. So it gave this, like, it sort of encouraged everyone who wanted to win it to share it with everyone that they knew and keep on sharing it. And so we basically took over all the Funko Pop, subreddits, Facebook groups, et cetera, because we were giving away the best stuff.
Speaker 4This is basically stuff like this is gritty internet entrepreneurship stuff that everyone, Sean and me, everyone listening who's has an internet business. Everyone has done something where it's like, ah, we're just going to like do this and do this. And maybe I won't want to tell everyone like 10 years looking back. So it's really cool to see that that was only six years
Speaker 1ago. Now you're worth $20 billion. It even extends. Uh, we had Mike Posner, the music artist who did, I took a pill and Ibiza on. And, uh, he's, he, you know, I think a lot of people didn't even listen to the episode cause it's like, oh, it's like a musical artist on our business show. But he had this amazing story that was just like any other entrepreneur where he was in college when he was trying to be an artist. So he realized he could post onto, he wanted to be on the top of the charts of iTunes, but that's where like, you know, Jay-Z and Rihanna, whoever were at the top, he realized iTunes had a iTunes U section for like college lectures. So he's a student. So he called the guy, he hustled to find the guy. Who like controls that board. He's like, I'm a student. Can I upload audio to that? And he became the number one on iTunes U. Then he emailed all these campuses being like, I'm number one on iTunes parentheses U. You know, people didn't, people didn't realize the distinction. He got booked for, for gigs. And then he had all his friends at other colleges and fraternities. He was in a fraternity. So he said, great. Everyone in the same fraternity in every college on this day, change your profile picture to this picture just to create some mystery. Like, what is that? And then people went and hunted down that, oh, it's about this. And then he got a new album release and that was the start of his music career. He growth hacked his way to success there too. And I love these stories as a founder, like, you know, the front door is not the, not always the only way in.
Speaker 3Yeah. My, my theory has always been the same, which is if you try and copy the obvious pathways, you're basically going to get stonewalled because you don't have the resources. In the early days, everyone wants to spend a ton of money on paid ads. You know, we spent virtually no money on paid ads in the early days. It was never going to be an effective acquisition channel for us. We spend an obscene amount of money on paid ads today. Yeah. But you have to get your way there. And in each step of the way, you know, sort of unlocks new and interesting things. But I do think in the early days, you have to find unique advantages that other people aren't going to be able to leverage.
Speaker 1Do you remember when you first started doing the Grails giveaway? Because, you know, some part of you has got to be nervous. You're giving away things that are worth thousands of dollars. Did it work right away? Did it take, you know, a few tries, I guess? Do you remember the math, the
Speaker 3first time it worked? Were you like, holy shit, we just, this is like 10 cents a user or whatever, you know, like, can you take us back? Yeah, I do remember the first, the first one was definitely a flop. So we gave away this like $500 item. And I think 104 people, there were 104 entries total in the raffle. You know, maybe that's like 30 or 40 accounts or something like that. And no one purchased anything. So like, oh, and we didn't, we had like, you know, no money for the business back then. It was like all coming out of my bank account. So like, oh, this is painful. And I'm not working. So I like, you know, the bank accounts dwindling at that point. Yeah, I think there's, there's always just a sweet spot between when do you know things actually, when have you proven a thing wrong, that it's not going to work? And when have you given it enough legs to make it work? And so for us, it was like, okay, well, now we have all those accounts who joined and we can send a push notification. And when we do the next one, and then the next one, they're going to be encouraged to share out to more people. And so if we can see that in the next one, we can go from like 100 to 300 Maybe there's a pathway there. And so I think I forget what the second one is 250 sort of rings to mind. So maybe it wasn't exactly three x, but it's two and a half x. And so you started to get this like exponential on it. And then you can sort of make the math work was the number of sellers like the metric where you're like, we need more sellers, more sellers, more sellers. Well, back then, it was just us as the seller. And what we were trying to do is we're trying to build a buyer base, because we couldn't add any seller other than us, because no one was going to purchase. And anything from any of the new sellers, and they weren't going to stick around. And so the early days were about was about getting enough demand on the platform, such that we could open up selling. And so I think we, you know, we, we launched the platform in December 2019 was when we launched our app. And then we didn't open it up to our first seller until I think towards the end of February was when we started to have enough demand in the marketplace. And even then, we we did another hack, which was anytime a seller would come on whatnot, they'd get our audience. And then we figured out a way to cross listed across other marketplaces, using our whatnot account. Gotcha. And so, which is like another classic thing, right? That's what Airbnb did. That's what a lot of people did. That's what I did when I had a miniature marketplace, you post on Craigslist. Yeah. And so between our demand plus the demand for other marketplaces, we got to a place where we were able to retain sellers and then slowly get that flywheel spinning. And it probably didn't take a lot. It's probably like if you just get a sale within the first X hours or days, you'll stick around. Is it did you find some metric like that? I think our data was too sparse. And we were just like, I don't know, let's just try and get them as many sales as we can so that people stick around. It took us a long time to get the precision around the metrics that mattered and retained and kept people coming back. We definitely weren't that sophisticated back then. How many transactions happened in the first 12 months? And did that account for any meaningful revenue? So sort of the journey for us was December 2019. We started it. And I bet you we did 30 sales. You know, like pretty, pretty grim numbers.
Speaker 430 in the first month? 30 sales. Yeah. That's pretty exciting. One a day. That's exciting.
Speaker 3Yeah. But so most so the way it actually went was the first first week of December, which was the first time we were all full time on what was like one sale. And the second week of December was one sale. And then I managed to like work with a Funko Pop influencer, the third week of December. And then we got like 30 sales, something like that. And a bunch of other things. of them we priced incorrectly. So there's like a bunch of the sales were people finding mispricings in our algorithm and taking us to cleaners. The bounty hunter. Yeah. It was like selling a $500 Funko pop for 150 bucks because the liquidity bit of the equation wasn't very good. So that was December. And then we, in July of 2020 is when we launched our first version of Alive. And that's
Speaker 1when the business really started. Where did that insight come from? Because it sounds like the insight for Funko came from looking at data and trends on eBay. Where did the, the second big insight, which was live selling, where'd that come from? So we, when we first started the business
Speaker 3in January, we went through Y Combinator. So we initially, originally we were in LA and went up to San Francisco to go to Y Combinator. And we thought we were doing well, the business was growing, et cetera. And then we went to fundraise in the middle of COVID as a Funko pop market.
Speaker 1Like everyone hated our business. By the way, why did YC bet on you? Like, God damn, YC is good that they bet on you guys when nobody else would one month into a Funko pop marketplace. What the
Speaker 3hell did they see? They were, they were very smart to be honest. And they bet on us many times throughout our journey. Like when the business started to take off, they were like tremendously helpful and helped put in more money into the business ahead of when many of the other investors who you would know their names. Um, we're passing the thing we were really good at and are, are still pretty good at is we're, we have pretty good taste and we know how to execute. Um, and so if ever we said we were
Speaker 1going to do a thing, we did the thing. But that first YC interview is 15 minutes. What could you
Speaker 3have shown them in that first 15 minutes? I don't know. I just flip a coin. We, we, we, we, we had pretty good backgrounds relative to like what we were doing. I see. Wait, that's a funny line. We
Speaker 4had good back, back. Brown's relative, meaning like there's no way someone this smart is working on something so
Speaker 3silly. Surely that's a sign. Uh, well, I guess like Logan, um, was like running engineering at like pretty large resale marketplaces. Um, I worked at Facebook, I worked at YouTube. So like, you know, we, I'd started a company before I got Aqua hired. We weren't like hugely known commodities, but clearly had a background for doing things. We built our product. For the YC interview in like a week, like we built it and launched it and pushed it live so that we had something and could like talk about real stuff that we had done.
Speaker 1So yeah, we just went all in. You want to hear, read my, uh, hear my notes from that. I just found my, my notes from when I talked to Grant and I was looking at investing. Uh, by the way, this is by, these are my personal notes. No, no, no, uh, no insult intended. I go, looks like a soccer dad, quiet intensity, humble confidence, he seems like a serious person who's actually doing this. I don't know. Those are my, those are my things that I wrote. I love the ending. I wrote winner energy. We should invest soccer dad, huh? He only heard one thing. I knew he would only hear the one thing. Get up Grant. Don't take that shit. I like that. But dude, here's what's the reason
Speaker 4why I'm being kind of naggy about timelines is because you're describing being like my bank's dwindling. Just trying to make this work. We only got 30 transactions, uh, in the first month. But what's insane is that I think it's something like 20 months later, you raise money at a billion dollar valuation. Is that right? That's probably about right. Yeah. So like the rate of the rate of growth is, is astounding here. Do you remember how much funding did you raise and how many
Speaker 3employees did you have at the time? So we came out of YC, we raised probably $250,000. Um, maybe a little bit less. It was a bunch of people who knew me and felt bad for me. And like, maybe they were like scout checks and some stuff like that. So, uh, you know, I think we had a few hundred thousand dollars in the bank and we were at that point, we, we brought in one more engineer and then before our seed round, we probably got to like six and a half folks. So March, when we came out of YC, we did probably 20 to $25,000 in sales total. Total transaction volume. Then we did our seed round in, I want to say like August or September. That was sort of like the business started to inflect when we, we launched live, like growth went to like a hundred plus percent month over month. And probably in September we did 250 to 300,000 in sales. So gross, gross volume. Yeah. Our takes probably like 10% of that. Then, you know, continue to inflate. And then we sort of backed up by December of 2020, we sort of ended the year at $2.3 million in total sales. And the number of employees in the business would have been, I think about 17 or 18. Then we closed the following year at, um, 168 million, 2 million to a hundred, a hundred million plus. 163 million. And we would have closed that year at about 100 employees. So 10x employees too. And then, so, um, the following year we did a billion in sales.
Speaker 1What happened? How did you go from 2 million to 163, 163 to a billion? What happened?
Speaker 3The core live experience we build, this is really fun. And it, and on the seller side, uh, you know, transformational for, business building. And so if you're a seller, what was happening to you was you were very quickly starting on whatnot. And again, it's not for everyone, but for, you know, a lot of the people who invested deeply and, and, and, and tried to build a really large business, um, whatnot was a bigger channel than anything else you'd done. And, and that was also a time like this is during COVID. And so you'd have people like, Hey, I had a comic book shop and people stopped coming in now on whatnot. And my comic book shop is doing more sales on whatnot. And so you'd have people like, Hey, I had a comic book shop and people stopped coming in now on whatnot. And then it ever did in a physical brick and mortar shop. I'm closing down my brick and mortar
Speaker 1shop. You had the COVID forces everything online, but then you had the benefit of if I'm a, if I'm selling a niche thing, I'm going to find more buyers when I use the sea of the internet versus just whoever's in a five mile radius, 10 mile radius of wherever my shop is. So that helped
Speaker 3for sure. And that first year. Yeah. I mean, COVID definitely helped, but you know, our business has continued to do, you know, incredibly well. So I think anyways, the core value was there. And then I think we, we had a really good team. It's like the first 30 people we hired at whatnot are lights out good. And we knew we figured out how to like the big unlock was sort of how to, how do you launch multiple categories and what is the mechanism for doing that fast? And as you start to launch multiple categories on marketplace, people in each one of those categories start to cross pollinate and everything that you had working in one category sort of compounds across all the categories.
Speaker 4What did you have to change about your personality to grow? Because you went from being a very scrappy guy doing everything to being the CEO of a company that's worth a billion plus dollars. What had to, that you've just compressed a lot of personal growth in a very short amount
Speaker 3of time, I'd imagine. I think probably people overemphasize the, like, um, I need to change because I'm a leader of a large organization because I think they look, I think they look at certain models of what success looks like at really large companies. And those are sort of like stoic, slightly stilted people who operate in a corporate manner. And, you know, there are, there are definitely things that you have to learn and adjust as you go. But I would say I actually just generally try and be me. And, you know, the, the nuances to that, of course, though, are, and by the way, I had to learn this. I thought I would have to change more. Like, I think one of, one of the mistakes we made, um, early on in the business was just trying to be, you know, too corporate for lack of a better word, which is like hire some executives from well-known companies, hire people from well-known companies. And it's sort of like one of those things where the story sounds good, but the reality is, is often, um, you know, a lot different. Cause you, you'd sort of go like, oh, you ran such and such at this big company. You must know what you're doing. And that's actually turns out to be like broadly incorrect. Like, no, someone needs to know and be able to sort of articulate in specific detail what, what they're doing and how they're doing it. So one of, one of the biggest lesson that I've learned through the history of, of whatnot is to just be really maniacally focused on what the problems and opportunities are. And don't let anyone necessarily tell me what the right pathway is into those problems because running whatnot, I, I tend to have a much, and my team has a much better grasp of what the nuance and context around those things is. And so be focused on what we're trying to achieve. And then be really, really nimble around how to achieve it. As long as we know the details around it. Okay. Now back to your question, what do I have to learn and change? So one was actually not to change too much because actually we're pretty good at what we do. There's a re you know, again, we got really lucky, but you know, there's also a reason we were able to take advantage of the lock. Then the things that I had to personally adjust is, you know, the company's 1400 people today as an example, and you do need really good systems and process to run a company at this scale. And so you have to learn how to like, you know, one of the products you end up building is, you know, I've got my operating system. How do I run the company to make sure that we're moving in the right direction? We're making good decisions and we're executing at really fast pace. So I had to learn how to like construct an operating rhythm across the business. There were certain points in time in the business where the accountability wasn't high enough, growth drifted, people's focus drifted, and we had to like fix that. We're a pretty straightforward group of people. We always have been. If you went into the early slack of whatnot, when someone did bad work, we'd be like, you did bad work. This is bad. Let's fix it. And as you get bigger, the fortunate people at whatnot, there's a bunch of people who sort of like know me as like the person on Zoom they've seen in like a team meeting and like a title that would scare people. And so I've had to soften my approach to try and get the best out of people. And again, because we always want to get the best out of people. You want to get the best work. You know, what would have worked in the early days be like, yo, this sucks. We got to do better. Someone might cry today. If I do that, we don't want anyone to cry. And so you just sort of have to like know how to flex a little. Again, you don't want to be dishonest and you don't want to be like this fake person, but you have to know how to flex to get the best out of people. I think those are probably my biggest things is just like be maniacally focused on the problem, be conscious of the context and around how other people are going to view things and adjust that to make sure you're getting the best out of people in the company. There's so much corporate gobbledygook. I think most of it's bullshit. It's all about like, what's your problem? How do you solve your problem? How do you do it in the best way?
Speaker 4You, you, we've kind of coined this term. We call it like all shucks success. Like if you read Warren Buffett's book, you learn that even though he has this attitude that he, this image that he's like, oh, I just, you know, I just hold forever and I just buy good companies and you're like, oh, anyone can do it. And then you read about them and you're like, oh, well, you were a math prodigy at a very young age. And you've been, you know, you've been doing this for a long time. And you've been doing this for a long time. And you've been doing this for a long time. And like, you're just super high IQ and patient and you have this beautiful temperament. With you, you have that same thing where you sort of are like, you kind of have this Canadian Midwestern energy where you're like, you know, we were just, I think we just made decent decisions and we got a little bit lucky. And then, but the reality is, is that there's like personality traits or something underneath there that is like world-class. And it's very clear you have that. What would you say your reports would say or investors would say this guy's a world-class at blank?
Speaker 3I think one of the. And coming back to like my distaste in stories, one of the, one of the faults in human behavior is people tend to follow stories and they tend to follow other human beings. One of the things that I consider myself lucky with is I've, I've obviously learned of Sharonis Man over six and a half years, but I, I was put in this situation and there will be plenty of other people if they were put in the right set of situations would be able to learn. So that's, you know, the luck element. The things that I, I think we're, we're pretty good at are getting to the root. So when you. Like what is actually happening here and how do we know? So seeking the truth maybe as a, as a, as a simple form. And so one of the things that always breaks at whatnot is our discovery systems. As the company grows and grows and grows, you get more and more supply and you're balancing all sorts of like competing objectives. You gotta make comic books succeed and you gotta make women's fashion succeed. And you gotta make fresh food succeed. And you gotta make the UK succeed. And we have this feed that recommends people all of these things and our discovery team is very strong. They're very studious. They'll go really deep in the data. They'll AB test a bunch of things. I'll see something, a metric go down in the business. And I'm like, this looks like a discovery problem. I've seen this before. I'll talk to the team team. Like, no, we tested it. We know exactly what's happening. I'm like, now, how do you know exactly what's happening? Walk me through every little thing in the system. So what's happening to this seller? Have you gone and looked at every individual seller, how impressions have changed for that seller? How that's happened across category, how it's happened across country, how many lost this much impressions? How many gained? How many gained this many? Because just because the AB test as an example, so AB tests are notoriously bad on network systems. So if you like AB test a thing, you change the feed, which means you change what users see. And then people will all of a sudden start to go into different streams. Now, as they start to go into different streams, the sellers will behave in different ways, which means you pollute both sides of your AB test as an example. You know, there's an example where we start going through all this and, you know, we sort of get to the bottom. You know, every bit of seller behavior and like, okay, well, you know, maybe these sellers, their discovery changed a little bit. But these ones increased and increased engagement. I'm like, well, I'm looking at the metrics. The metrics say everything went down on a macro level, even if it's not in your AB test. How do you actually know that? Then we plot the elasticity curves of those sellers. We actually see that there are certain parts of the platform where if you, even if you improve buyer engagement, if you take away certain impressions from certain sellers, their businesses shrink more than the engagement drop. It increases it. And so you have to look at these things on much larger time horizons and in different ways. And so, you know, the, a classic way someone would approach that problem, particularly like a lot of the ranking companies are like social media companies that look at near-term engagement. And you go, okay, of course you're right. You've done this before. You've worked at Facebook and Google and wherever. And I would go like, I don't think, how do you actually know that? Everything's a little bit different. Let's go all the way to the bottom. And then we unearth like an incredible insight that will shape our discovery systems for the future. So that would be like the example. Just going immensely deep into the problem.
Speaker 1I love how like two minutes ago you were like, business is not that complicated. And then you're like, so we have, you know, our sellers in our fresh food department. So we plotted the elasticity curve. You know, it's like, yeah, super simple. Me and you, we do the same thing. Yeah, it's great.
Speaker 4You sort of answered the question in a way where your answer is probably true. You are world-class at that. But the real answer is the way that you answered it. You're just, I think you are very smart and more so your rate of success. Your rate of learning seems very, very, very high.
Speaker 3Yeah, look, you do have to learn fast. But even what I just described to you, if you whittle it down to simple components, all elasticity curves is like what happens to a seller when you increase their viewership and then you decrease their viewership? How much does their business grow or shrink? And that's like, you know, if you're running a platform where you have a feed and you're sort of directing traffic around things, it's probably a thing you should know. And it sounds more complicated because you use elasticity. But actually, like, how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink?
Speaker 1And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink?
Speaker 3And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? And how much do businesses grow and shrink? look at like my team of people, my team, I've been working with most of my team for four plus years now. And then most of their teams are pretty similar. And so you get like a really nice, no, this is how we do things here. This isn't meant to be mean. This isn't meant to like understand the truth because it's quite unnatural to be challenged at that level of detail.
Speaker 4Hey, can I ask you about that challenge? Because there's two phrases and words that I really dislike. One is first principles and two is contrarian. Because typically the people who talk about that stuff are either kind of dumb or they're smart, but they're an asshole when they deliver it. You seem smart and you seem like a pretty kind, likable guy. Was there a person or a book or something that inspired you to be disagreeable, but not rude? Because it's quite
Speaker 3challenging. I think for me, what I always try to do is imagine myself in someone else's shoes. And imagine when I had certain stuff like this happen to me. And what would enable me to do my best work? And I'm not saying I'm perfect at this. There are definitely times where I am not as nice and where I will sort of be at the end of my level of patience. I try to make it few and far between, but it happens. One of the examples that sticks with me for a while is, and it's actually one of the reasons I ended up leaving Facebook. I was in this big product review. With a bunch of very well-known and very senior people. And the thing I was bringing to a product review was a project that I unfortunately got stuck on, I did not want to work on. And it was one of the most politicized projects across the entire business. And I put together this thing and I spent boatloads of time because all these freaking VPs would never agree with anyone. It was just me running in circles like this. And you get to the review and the guy who's running the review basically just starts yelling at everyone. And I'm like, you know what? I've been up the past couple of weeks till past midnight. And I worked like hell on this. And no matter who you gave this thing to, it was going to be a absolute cluster. You know, now running my own large organization, I see what he did wrong. I know what I would do differently. But the way that was handled was never going to make me want to do more great work. And so I basically, at the end of that, I was like, I'm out of here. I'm not dealing with this. And so I just think about ultimately what you want to do is you want to get good work out of your organization. And being mean, nasty, or combative will almost never do it.
Speaker 4I know that you don't, you kind of said you don't like talking about numbers because you're like, there's still a lot to do. But of all the people who have done business, which is like billions of people, there's probably only like three or four or 500 who are worth over a billion dollars below the age of 40. And you're one of them. I think according to Forbes, you're worth like two or three billion dollars. Surely there's been a moment where you're like, this is pretty awesome. Have you had a moment
Speaker 3like that? From time to time, it's nice to reap some of the rewards of what's been built. You know, it's really nice to be able to take care of my family and take care of my family properly. And yeah, look, it's not lost on me that like, in six and a half years, we've been able to build something, you know, pretty massive. Millions of people build businesses, hundreds of thousands of people build businesses on Whatnot, making billions of dollars. You know, 1,400 people at Whatnot, a lot of people have been there for the entire journey. Yeah, you know, it feels good. But also, I think we still have a lot that we want to do. And again, I sort of, you know, you get a little, I don't want to get complacent. And so from time to time, I'll have a, you know, I'll reflect for about five minutes and be like, wow, this is pretty insane. But then, you know, I'm in my 30s still. There's 1,400 people who came to work at Whatnot, that I have high accountability for, raised a billion and a half dollars from investors who we have high accountability for. And so, you know, it doesn't do me any good batting myself on the
Speaker 1back. That doesn't get me to the next step. Sam, I'm going to start saying that I take care of my family. I take care of my family properly. I'll let you figure out what properly means. I'm just going to start using that ever. I enjoyed that one. That was good. You said, you had a good quote. You said, if you think you're moving fast, you're probably not. What do you mean by that?
Speaker 3Almost everyone who says they're moving fast is moving slow, if I'm being honest. If you have to talk about it, you're moving too slow. If you don't even have time to think about it, you're moving too slow. And frankly, you can always move faster. Right. Today's podcast is brought to you by my
Speaker 1friends at Mercury. They make the world's best banking product. I think you know this already. I use Mercury for all of my businesses. I think I have like maybe seven or eight businesses. We use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo in Chase. I'm just all in on Mercury. Why? I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife, very easy to spin up virtual cards. One click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more. Mercury is a FinTech, not an FDIC insured bank. Banking services are provided through and call them an A. Members FDIC. Hey, what's the weirdest trend of a thing that people are buying and selling on whatnot that an average person wouldn't even realize there's a craze going on or a behavior that you've seen on there? Yeah, I mean, probably the most popular thing this
Speaker 3year that other parents probably know about is like Neato's and squishy toys. I don't know if you guys have younger kids. You know, you brought up some of the other ones that I think are really fun, like just people selling crab and meat. I think there's like people
Speaker 4selling gold bars, aren't there? Like miners selling bars? Yeah, bars of silver, bars of gold.
Speaker 3Like, you know, like from the mine, like what's happening? I mean, you know, huge range could be anywhere from like a coin shop to, you know, there are there are like mints that like mint
Speaker 1coins and gold. Cutting out the middleman and just selling direct on whatnot. Is that the kind of the you think there's an opportunity like, you know, with Twitch, for example, people built stream labs, they built other like tools and companies on top to service the ecosystem that you weren't that the platform wasn't going to build? What do you think is a kind of good tool or business that somebody could be doing on top of the growth of whatnot? Yeah, I mean, I think so. So stepping back like
Speaker 3a macro level, I think you're going to see over the next decade that live commerce will be 30 plus percent of all of e-commerce. It means there's just like an absolutely enormous market. What is it today? I mean, you take the top three biggest players in the market across like U.S. and Europe, you're probably around 30 billion, something like that.
Speaker 1Sorry, but just to show the percent, you said it's going to be 30 percent. That means it's currently at what? Like how much room do you think there is? Single digit percentages.
Speaker 3Okay. So it's got a 5x from here at least. I think 20, 30, 30x plus. Okay. And the comp is sort of like what's happened in China and Asia. So in Asia, in China, it's about 40% of e-commerce. And if you looked at, you know, the growth of whatnot, the engagement of the platform, sort of looked like it's headed towards that direction. And so, you know, that's a market in the hundreds and hundreds, if not, you know, a trillion dollars into the future if you go outside of China. And so there's just going to be a, there will be a ton of opportunity. So the biggest live shopping businesses are going to, like the people who are selling are going to do a billion dollars plus in revenue. Like our biggest seller probably does a couple hundred million.
Speaker 4Do you say your biggest seller? Is doing nine figures?
Speaker 3Well, well over. Yeah. Many, multiple nine figure sellers. Selling what? Collectibles, you know, we have brands doing tens of million, a hundred million in fashion.
Speaker 1But are these like, these are not individuals, these are just like large companies? What's going on? Like, I guess, give us a hero story.
Speaker 3It's probably like the biggest are people who probably started as like individuals or maybe like two or three on whatnot. And just took advantage and grew it. So like the operation, the biggest operation that I can think of started initially as like three or four, three or four people. It's now probably 150 to 200 people, almost completely built on whatnot. And they're just like really savvy business people who sort of jumped on the live shopping train and build a really large business. And so if you, you know, if you sort of imagine a future where there's five, you know, three, $400 billion in sales in the U S off of live, there's going to be an. Immense number of, of really large businesses built. And like the biggest sellers in, in China will do a billion dollars plus a year as, as just like an example. Then there's, there's a bunch of peripheral services around there. So one of the things we're starting to see is like wholesale marketplaces directly supply, supplying our sellers is a really big opportunity because they need a lot of inventory. I've, I've definitely seen a couple of wholesale marketplaces get pretty. Substantial fundraisers and, uh, I know a huge chunk of that growth is off the back of whatnot, as an example. So I think there's, there's a lot of opportunity around helping these people source really great supply. And then you're sort of starting to see what they call MCNs around this stuff. So multi-channel networks, which is a bunch of people who specialize in helping people run their, their live shopping businesses. So I think all three of those will, will probably see a proliferation over the next decade.
Speaker 4This is nuts, you're just a killer. i didn't realize i knew what whatnot was i've used it i did not i guess i i saw the numbers but it's kind of like now that i see what you're saying i'm like this is insane this is so much like originally when sean first told me about this i had the reaction i imagine a lot of people did which is like this is silly this is small this this is nothing uh like a like a multi tens of billions of dollar company but this is insane and i understand why you have helped lead it there
Speaker 1sam you should start you should start your denim shop on whatnot yeah i buy um i buy a ton of i'm
Speaker 4an ebay power user i buy a ton of uh i collect old denim it's very weird but uh i guess i gotta
Speaker 3start using whatnot that's a popular popular uh segment do you have any hobbies do you like any
Speaker 4weird stuff now that you uh see all these other weird things that people buy and sell do you have
Speaker 3any uh interesting hobbies i mean i still collect things but you know nothing like obscene i've sort of been collecting type one photos which are like original photographs um that's probably one thing i've been purchasing most recently and then other than that my hobbies are are pretty pretty tame i'm canadian so i still play hockey sean you had a good read on him man winter energy i told you winter energy wow thanks for coming on man this is fun yeah thank you guys for having me it's a really fun conversation you guys made it
Speaker 4made it super fun well thank you we appreciate you that's it that's the pod i feel like i can
Speaker 2rule the world i know i could be what i want to i put my all in it like no days off on the road let's travel never looking back all right let's take a quick break i want to tell you about
Speaker 1marketing school it is a podcast that is part of the hubspot podcast network and it is run by neil patel and eric sue and these guys are both marketers who are running businesses and so if you want real world tactics from practitioners who are actually out there in the field doing it this is the podcast for you check it out wherever you get your podcasts
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