Benjamin Lauzier: commitment

Transcript context

…This episode is brought to you by Vanta. When it comes to ensuring your company has top-notch security practices, things get complicated fast. Now you can assess risk, secure the trust of your customers, and automate compliance for SOC II, ISO 27,001, HIPAA and more with a single platform, Vanta. Vanta's market-leading trust management platform helps you continuously monitor compliance alongside reporting and tracking risk. Plus, you can save hours by completing security questionnaires with Vanta AI. Join thousands of global companies that use Vanta to automate evidence collection, unify risk management, and streamline security reviews. Get $1,000 off Vanta when you go to vanta.com/lenny. That's V-A-N-T-A dot com slash Lenny. Kind of as a segue from that idea of quality, I want to talk about managed marketplaces, managed supply. So, I think the reason quality is such an issue for marketplaces is because you do not own the supply and control the supply your marketplace, you're not just selling something, quality is innately going to be a challenge. Airbnb doesn't own homes, Uber doesn't employee drivers. They can't even legally tell them exactly what to do because their contractors, so quality is always this ongoing challenge with marketplaces. So, there's always this push towards making it more of a managed marketplace. We give people a lot more instruction, maybe they own some of the supply, maybe they invest a lot in training, all that kind of stuff. And in a perfect world, not unlike an idealized world, quality will be best if you own it. But then you're no longer marketplace, your business model sucks. I guess just any thoughts on marketplaces that are considering becoming more managed? Any advice on when it makes sense to move towards that spectrum, and how far to go? I think when you're running a marketplace, you tend to sit in your ivory tower a little bit looking at stats and thinking, "If only we could get people to do X, it'd be better for everyone." And 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 intuitive. I'll mention another example, but we'd originally sell leads to pros like plumbers and electricians. And of those leads, obviously only a fraction would turn into actual jobs and revenue for those pros. So, we also saw that those pros were 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 marketplace move, going from some version of lead to a direct booking. And digital, great. We knew we were going to improve their ROI by something like 20% maybe, and we launched this and pros hated it. They hated it because they actually subconsciously, they liked the thrill of the sale. They loved this contact with customer, and they sometimes completely overestimated their ability to close the customer. They were like, "You took all those phone calls, they kept me busy. I felt like I was hustling, I was about to close this customer." And so, no matter what the data says of like, "Oh, we increased their 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 thing at Lyft when trying to make driver earnings less volatile, we had to fight a lot of that perception and a lot of that peak end effect. So, my call-out here is any attempt at control can be really tricky and backfire in ways that are unpredictable. You also touched on employment classification. In the U.S., when you talk about controlling supply, all the lawyers are like, "No, no, no, that's not something that we do. " Because if you control your supply, then there can be legally classified as employees and be entitled to a whole bunch of benefits. So, my take on this in general is I'm a huge believer, and it really depends on the type of company I should say, obviously, but my take is I'm a huge believer in market forces and empowerment. So, 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. So, lots of coaching tools that Lyft, Uber did it, like most marketplaces provide some sort of coaching. You have a review system perhaps, you have stars for your sellers, for sellers who fall below the threshold then coach them, provide them the right tools, the right guidance, what is the standard that you have on your marketplace and help them meet that bar. sellers, for sellers who fall below the threshold then coach them, provide them the right tools, the right guidance, what is the standard that you have on your marketplace and help them meet that bar. And for people who fall through the gaps that you have, then that's when you invest in more hands-on tools. And this is one of the things that we did at Lyft also with the rental company that we spent up. I'm happy to tell you more about that, that's interesting.…

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