Sarah Tavel: evaluation

Transcript context

…And then Faire is an awesome example too. It sounds similar to REKKI as you described, where Faire is basically a B2B artisanal items marketplace where boutique shops buy nice candles and blankets for their store to sell. And essentially they did what you described, where they signed on a store and they basically told them, "All your vendors can join for free and not have to pay any fees if they sign up for Faire, and it makes it easy for you to buy their stuff." And then on the other side, a candlemaker tells all the places they sell to, "Hey, you should use Faire. It's so easy to buy our stuff, and we can communicate through there." And they can sign up without any fees. So basically everyone just invites all their existing partners on Faire, and then everyone's on Faire. So yeah, there's a lot of ways to do it. I love it. And so the second type of loop, and again this loop works symbiotically with the growth loop, is what I call happiness loops. And I think of them almost as the kidneys for your marketplace as you grow. The happiness loop, the idea is you have a lot of new sellers coming in, and of course you have new buyers, but you want to make sure that you are matching your buyers with the sellers that are going to give them the best experience. And so, normally in a consumer social product, churn is heartbreaking. Once a user churns, they're almost never going to come back. And with a consumer social product, you're trying to get to massive scale. But when you're building a marketplace, actually, there's a healthy amount of churn that you want on the supplier side because there are just going to be suppliers who aren't going to create a great experience for the buyer, and you can't do anything about that. And so we've all had the Uber driver who you give one star to. That person you don't want on your marketplace getting matched with buyers. And so you're trying to then make sure that, as you grow, you have a natural mechanism in your marketplace to reward the suppliers that you want to reward and to churn out the ones that you don't. Of course your job is to do your best to set all the sellers up for success, but it's an inevitability. And so there's two great examples I think of in these happiness loops, which is around search ranking, and then reputation. Search ranking is just a very obvious one, which is, you're trying to understand what creates a happy experience for the buy side, and then reward the sellers that provide that experience. So I think an interesting example that ended up actually changing but still is illustrative, is that UberEats in the very beginning of their journey, thought that their advantage in the market was going to be about having really fast delivery, right? Because they already had this network of drivers and so they thought that that's where they were going to really lean in and have an edge over any competition. And so in the search ranking, they rewarded restaurants that prepared the food quickly, and so answered the Uber Eats request, and then actually got the food out as fast as possible so that Uber Eats became synonymous with the quickness by which you got the delivery. And so that restaurant that takes 40 minutes to prepare the food, they would get ranked low in the experience for Uber Eats, even if the food was really, really great. Okay, so we've been talking about tipping of the marketplace. Is there anything else there that you want to share before we move on to the third layer?…

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