Sarah Tavel: evaluation

Transcript context

…Yeah. And part of what's so hard about this idea focus is I'm lucky to meet with just incredibly ambitious founders. And the hardest thing I think about building these marketplaces is that the ambition can often feel like this sun, like the heat of the sun that's trying to warm everything up, and you're going after this big market, warming the ocean. And I think that, really, what the the best, ambitious founders do is they focus that ambition like a laser beam on a small market, the thimble. And what you do is like you're getting that thimble, you're getting the product market fit really, really right with this like small, constrained market. And if you heat that up really, really hot, then it expands from there. And part of this is that we have to accept a couple of points of scarcity. One is that, you can't raise hundreds of millions of dollars from the start, where we, especially today, live in a world where there is a constraint around capital. And so, you have to be able to take that capital in the beginning and make the most out of it. And the only way to do that is to be very, very focused. And the second thing is that the constraint is the founder's attention. And again, these things are really, really difficult to to get off the ground, and the only way that you can do it is by having myopic focus on a segment. And the example that I always think about was a very cool thing that we all got to see, which is when the food delivery wars happened, where you had companies like DoorDash and Postmates and Uber Eats, and then, the incumbents of Grubhub, take very different strategies. I make comparisons to Postmates and and DoorDash, both successful companies, but Postmates, from the very beginning, had very big ambition and went after all the big cities. They went after, not just restaurants, but restaurants and Apple and retail, bicycle. I remember, there were so many things that they went after all at the same time. And when you're playing that game, you're always being compared to whatever other substitutes there are in the market, right. And you're it and that just when you have constraint of capital and attention you're you're spreading yourself thin across a lot of different vectors of kind of preference for the customer and the seller. DoorDash on the other hand, famously and very controversially went after the suburbs in the beginning. And the beautiful thing about the suburbs is that there is very little competition because no one thought that you could do it economically. And they probably weren't wrong in the beginning, like DoorDash lost a lot of money in the beginning fulfilling delivery in the suburbs, just because the delivery times, the driving was so long, but by going after a market that other people weren't focused on, it let them get to a place where they were able to really make the customers on both sides of their marketplace happy enough that they retained. ng after a market that other people weren't focused on, it let them get to a place where they were able to really make the customers on both sides of their marketplace happy enough that they retained. And this word happy I use, I should expand on it a little bit because the realization I had as I reflected on this kind of feeling that GMV is really actually a vanity metric, it doesn't get at the core of whether you're building enduring value. It's like very clear and there's plenty of examples I could give where there are companies that had incredible scale and still were disrupted by a startup. And it's because actually, customers don't care how big you are, they don't care how many transactions you've accumulated. What they care about is when they have a transaction with you, how happy do you make them? How much better is the experience that you provide than any other substitute that they could use? And if you do a good job, then they're gonna keep coming back to you. And so I call it happy GMV. And that's actually the thing that I think you as a founder or product leader have to focus on, which is, what do I think is going to be the experience of a buyer or seller that leads them to retaining and tracking that as like the happy path and therefore, the happy GMV. Amazing. I love that concept, happy GMV. You also kind of extend this idea and I think you call it the minimum viable happiness is what you want to create when you're building this marketplace, this symbol of water that you're trying to boil into something incredible. What's the minimum version of that that creates really happy customers?…

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