How marketplaces win: Liquidity, growth levers, quality, more | Benjamin Lauzier (Lyft, Thumbtack)

[00:00] 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. 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 kind of intuitive. 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. [00:30] 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. [00:44] Thank you. [00:47] Today my guest is Ben Lazier. Ben was VP of Product and Growth at Thumbtack, where he rebuilt the product team and Thumbtack's growth strategy, re-architected the revenue model, and helped re-ex Thumbtack's growth within three years. [00:59] Prior to Thumbtack, Ben was at Lyft for over six years, where he was employee number 30 and led product and growth for the driver's side of the business, and at one point reached 1% of U.S. workers driving for Lyft every month. He currently spends his time advising marketplace teams and founders, teaching a Reforge course on marketplace growth, and most recently started a healthcare company called Nura that connects you to a care advocate to help you navigate the healthcare system in the U.S.

[01:29] of building and scaling a marketplace business, including what to focus on pre-product market fit, how to know which side of the marketplace to prioritize, what product market fit looks like, how to track liquidity, what causes most marketplaces to fail and how to avoid that, and a bunch of examples of really clever growth strategies, especially on the supply side, and some really interesting stories about how Lyft was able to compete with Uber early on with one-tenth of the resources. As a bonus, Ben also shares insights into how the European product [01:59] from the US product market and what he encourages European companies to change in order to operate more effectively and be more innovative. This episode is for anyone building or thinking about building a marketplace business. If you enjoy this podcast, don't forget to subscribe and follow it in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes, and it helps the podcast tremendously. With that, I bring you Ben Lazier. [02:23] Ben, thank you so much for being here. Welcome to the podcast. [02:29] Thank you so much. It's so good to be here. Thanks for having me. [02:31] It's absolutely my pleasure. [02:33] Okay, so you are one of the most knowledgeable and experienced product leaders in the world on [02:39] building and scaling a marketplace company. And so I want to spend the bulk of our time talking about [02:44] and essentially extracting as much wisdom out of your brain on how to build and scale a marketplace business so that founders and teams that are [02:54] struggling with building their marketplace company or just thinking about building a marketplace business can save a lot of time and a lot of pain.

[03:01] How does that sound to you? [03:03] That sounds amazing. That's a high bar, but I will try to live up to your expectations. I'm confident we will hit that bar. Let me start with just setting a little context. For folks that aren't super familiar with what is a marketplace business, they hear this term marketplace company, [03:18] What's the simplest way to understand what makes a company a marketplace company in a marketplace business? [03:24] I mean, like you mentioned, I love marketplaces. I think I've been building and scaling marketplaces for, you know, I think almost 15 years now. And I feel like they add just such a fascinating dimension to the challenge that we work on as PMs. You know, it's this hidden dimension that you uncover when you work on marketplaces. And I think on paper, what makes the marketplace 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. [03:52] So that's pretty simple sort of explanation. I think in practice, it's always a little bit more nuanced on the fringes. 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 in this exchange of value.

[04:22] places, I guess. This episode is brought to you by Epo. Epo is a next generation A-B testing and feature management platform built by alums of Airbnb and Snowflake for modern growth teams. Companies like Twitch, Miro, ClickUp, and DraftKings rely on Epo to power their experiments. Experimentation is increasingly essential for driving growth and for understanding the performance of new features. And Epo helps you increase experimentation velocity while unlocking [04:52] that no other commercial tool does. When I was at Airbnb, one of the things that I loved most was our experimentation platform, where I could set up experiments easily, troubleshoot issues, and analyze performance all on my own. Epo does all that and more with advanced statistical methods that can help you shave weeks off experiment time, an accessible UI for diving deeper into performance, and out-of-the-box reporting that helps you avoid annoying, prolonged analytic cycles. Epo also makes it easy for you to share experiment insights with your team, sparking new ideas [05:22] the A-B testing flywheel. Eppo powers experimentation across every use case, including product, growth, machine learning, monetization, and email marketing. Check out Eppo at getepo.com slash Lenny and 10x your experiment velocity. That's get E-P-P-O dot com slash Lenny. [05:44] This episode is brought to you by Paragon, the developer platform for building native,

[05:52] on your product roadmap, whether it's to ingest context from your users' external data and documents, or to sync data and automate tasks across your users' other apps, integrations are mission critical for B2B software products today. [06:06] But building these integrations in-house cost an average of three months of engineering, according to the 2024 State of Integration Survey, which results in difficult roadmap tradeoffs. This is why engineering teams at Copy AI, AI21, and over 100 other B2B SaaS companies use Paragon, so they can focus their efforts on core product features, not integrations. The result? They've shipped integrations seven times faster, all while avoiding the never-ending maintenance that comes with rolling your own integrations. [06:36] Use Paragon.com slash Lenny to see how Paragon can help you accelerate your product's integration roadmap today and get $1,000 in credit on their pro and enterprise plans. That's use P-A-R-A-G-O-N.com. [06:51] You've mentioned managed marketplaces and just how that becomes... [06:55] something marketplace started to think about more. I want to get back to that because that's a really important point. [06:59] But just to even clarify this point, a key part of a marketplace is that the company doesn't own the supply. [07:06] Right. That's. [07:07] in a sense, [07:08] kind of what defines their marketplace versus they're just selling stuff. Totally. Yes. Yes. And I think, again, like you have companies that claim to be sort of managed marketplaces, I think, depending on like 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

[07:27] gray waters. But yeah, the marketplace implies this concept of two independent and supposedly autonomous parties that you help connect and provide this exchange of value for them. Awesome. Okay. So let's come back to that because that's a really important topic. And it's something that every marketplace kind of [07:45] trends towards or thinks about is just like we're going to [07:47] control the supply we're going to manage it we're going to maybe own it in the future but let's get back to that [07:52] So, [07:53] You work with a ton of marketplaces. You've built a bunch of marketplaces. [07:57] What do you find is the biggest struggle to building [08:00] a successful marketplace business, the most common problem people run into? I think there's two types of challenges, I guess. [08:07] you know, 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? [08:37] if you don't have product market fit, if you don't have a good enough growth strategy for at least one side of your marketplace, [08:44] just forget about all this marketplace stuff, right? Focus on this core exchange of value, [08:48] 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. You see companies like...

[08:57] Airbnb and Themptac doing this with Craigslist pretty early on, to jumpstart their growth as just countless examples. But don't get distracted by this shiny and cool, intellectually challenging idea of working on the marketplace and nail the basics of your product market fit at first. So just to spend a little more time there to make this even more real. So... [09:17] You're saying that pre-product market fit before you find that anyone really [09:22] wants what you're building. [09:24] focus on figuring out a way to grow [09:26] one side of the marketplace. [09:28] So maybe just two quick follow-up questions. How do you know which side to focus on initially? [09:32] And can you give an example? I think Thumbtack may be a good example of this, of how they did that. Which side to focus on is, like, there's different approaches to this, but generally people will pick the hardest side. And so if, you know, for I'll take the example of Thumbtack because we're going to talk about it. So Thumbtack is a home services marketplace to help you find plumbers, electricians. [10:02] Like there is there's supply you can like sort of look for. You can open the yellow pages. You can like find plumbers somewhere. But the hardest question was, can we go out there and can we find people to, you know, to who want to do something in their house? We have like projects that need to be done. Right. What is the core growth strategy for us to 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 their home for them?

[10:32] the hardest side is sort of my advice. [10:35] And then how some companies sort of do this, again, like, 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, like, hack one side, play one player mode is what it's also called sometimes. [11:05] was partially one of them. And the idea was like, hey, we can find all those great pros on Themptac. When we have someone who wants a job, or 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 browsing Craigslist, looking for a job. We'll bring them to our platform. That's an example of how that way you worry around the core, you worry about the core value proposition of, can we get people to come back to the platform? [11:35] full exchange of value? Are people trusting us? Do we have the right checks in place to make sure that [11:40] 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 on 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. [11:52] When you say buying the hard side, [11:55] How do you find that? Any advice you can give founders and teams? [11:58] In general, I would say [12:00] And intuitively, like the teams know, like especially the teams are like in the weeds. They know they know like, well, 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, you know, someone else to like.

[12:16] make you think about it to reflect like 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 how where to find the supply boom that's that's the site that you should be focused on [12:27] Then you find a way to outsource your demand, subsidize it, find some other way and focus on this side that you have no idea how to grow. That you should have a reliable growth strategy for this side. In my experience, it's almost always the supply side is what you need to work on because once you have awesome supply, people are going to be really excited to grow. [12:47] tap it like Uber drivers, Airbnb homes, [12:51] professionals on Thumbtack. Is that your experience too? Yes, I would say supply is the hardest side, maybe like 80 to 90% of the time. Yeah, I totally agree. Yeah. [13:01] I was trying to think of counter-exemples, but I couldn't think of one. I just know that there are... There's one I know, which is Rover. [13:06] based on research I did, because it turned out it was really easy to find people who want to walk dogs and watch dogs for 50 bucks an hour or whatever. [13:14] It was like a very easy value prop. [13:15] And so they had a waitlist. They had just so many people. Also, TaskRapid is the one I know about where [13:21] They had so many people wanting to be taskers, whatever they call them. I was going to mention TaskerBit as well. I heard of that as well, yeah. [13:27] Okay, and then you talked about [13:29] There's a core part of figuring out how to grow that part, how to grow the hard part, generally the supply side. [13:34] You shared a couple examples. Are there any more clever... [13:37] things you recall that you might be able to share of just ways people grew [13:42] supply early on that could inspire people that are trying to figure this out right now. [13:46] Yeah, I think there's a couple of, you know,

[13:49] like common tactics that's like pretty early on that I think companies like rely on. So we've talked about jump starting one side of the marketplace with, you know, like maybe with some tech and lift also leverage job boards. [14:04] You have also a lot of companies 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 the thing that appeals everyone. So OpenTable did this really well with all the restaurant services. [14:34] pretty early on. So we tried that. It actually didn't work at Lyft, but I know other marketplaces have been pretty successful with that. Just to make sure people understand that one, it's a really interesting one. In the Lyft example, it'd be convincing drivers to become riders, convincing riders to become drivers, and mostly the latter, convincing riders to become drivers. [14:54] Yeah, exactly. In our case at Lyft early on, we had a wait list 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 are taken. People are making 50 bucks an hour right now. Do you want to hop on your car and drive?

[15:24] meaningful amount of supply coming from. Wow, how does that make you feel that Uber figured out a better way to approach this and made it work? And it's a different audience. You would think that the Lyft sort of passenger and driver is sort of more likely to flip back and forth between the two. [15:43] I don't know. I don't know. I don't know. [15:46] Some cam at Uber outdid you guys. Oh, no. Yes, on a couple of other things. And we did them on a few other things. So we'll talk about it. Okay, okay. That's right. [15:56] So essentially what we've been spending some time on here is just [16:00] When you're starting a marketplace, figure out which side you need to drive because you [16:05] That's what will unlock this opportunity. There's a hard thing that nobody's ever done before. And most of the time, it's build a bunch of supply that nobody has done before. And there's all these tactics for how to do that. [16:16] And all of this is, coming back to the main question I asked, we've gone on this awesome tangent. [16:21] is [16:23] pre-product market fit before [16:25] You even know this is a thing. Spend time [16:28] most of the time building supply to see if [16:30] demand. Customers actually want this thing. [16:33] Right. [16:33] 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 that we talked about instead of doing what we just talked about. For companies that have some sort of scale and product market fit, [16:52] to me that the, [16:53] 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.

[17:01] To me, liquidity is how marketplaces win. It's this measure of your ability to match buyers and sellers efficiently. 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. [17:31] for all the people who open the app with the intention to book a ride, how many of those actually turn into a ride, right? 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 why you exist as a marketplace. It's to connect the two, right? And it's also the ultimate engagement loop. The more supply you have, the more choice people have, the better the services, the more likely it is that it [18:01] It's really this incredible circle and [18:04] 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 an actionable playbook against it. Like, okay, how do I manage this? Okay, it's important, but what do I do about it, basically? [18:21] Is there a metric you recommend people specifically look at to understand liquidity? [18:25] I think the metric that I like the most is sort of a predictor of liquidity. So your liquidity might be like, it's typically a measure of demand utilization, right? Like it might be looking for, you know, like something on Airbnb, like how many of those searches with intent actually turn into a transaction, right? So it's your fill rate of your intentful demand, typically. And that's really indicative of the net output of your marketplace. And so that gives you a sense of like the health of your marketplace.

[18:55] influenced by a whole bunch of different factors, right? So if you think about, you know, for, you [19:01] For Thumbtack, it can be influenced by if there's a snowstorm out there, if the competition is bidding. There's a whole bunch of exogenous factors that come into play. And the metric that I think is slightly more actionable is a little harder to define, but so much more helpful in my opinion. It's what I call a market health metric. And this is basically, think of your proxy that is the best predictor of your liquidity. [19:31] 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 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 two minutes, if it's five, [20:01] Maybe you take the bus. [20:02] 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 the transaction happening. And that's the metric that you can predict. That's the 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 into the platform. I want to know if it's actually reducing ETAs in this case.

[20:32] and sort of limiting some of the effect of those exhaustion factors that I mentioned. [20:38] Awesome. So essentially, [20:40] Watch fill rate is the term that used that a lot of people love, which is just like people with intent converting. So the Airbnb example is exactly the way we did Airbnb. [20:50] We looked at people that are searching with dates as intentful. [20:55] users and then how many of them convert to a booking. So that's basically what you're trying to get to. And your point here is that's kind of the output metric. That's like where you know what you want to move. [21:05] But in order to move it, there's something that is the biggest lever to moving fill rate. And in your experience, and I've seen this exact same thing, it's usually amount of supply. Do you have enough good supply? And so in the case of Lyft, it's do you have enough cars? Do you have enough homes? Do you have enough plumbers on thumbtack? [21:21] And that's usually where you can actually impact the rate suite. Yeah, exactly. And that becomes the goal of the team, that becomes the focus of the company, basically drive that up in all the little markets you're in and all the categories you're in. [21:33] Exactly. Yeah, completely. Awesome. [21:36] You mentioned this idea of product market fit and things change pre-product market fit, post-product. [21:41] product market fit. Classic question. I'm curious if you have any insights here. Just like what tells you that you've climbed that hill of product market fit that you've [21:51] might have product market fit or you definitely have product market fit in a marketplace. [21:55] It's hard because to me, the two are most 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.

[22:25] And so to me, my answer would tend to be pretty classical. It would be like, measure your product market fit the way you would for a normal company. So like, yep, I like 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, you know, would be like significantly disappointed or have no other solution, right? So questions like this, I think, go to the heart of how valuable is your solution to users? [22:55] the supply side and the daemon side. My advice is typically like, [23:00] 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, like, relatively traditional and that's independent of marketplace sort of dynamics. [23:30] Thank you. [23:31] survey the Sean Ellis test of asking people how disappointed would you be if they left? [23:35] if the product didn't exist. [23:37] And I just love that you keep coming back to this point that I 100% agree with that [23:42] Most of the challenges you have with a marketplace business are [23:45] 90% are the same challenges you'll have with a non-marketplace business. And people over-focus on, oh, I need to think of this like a marketplace and all the marketplace...

[23:56] science behind all this stuff and really it's [23:59] All the same stuff every founder is dealing with. Product market fit, except you have two sides of it. Growth strategy, but you have two sides of it. [24:07] So I love that you keep going back to that. [24:10] Something that I definitely want to touch on is [24:13] When people are thinking about starting a marketplace company, [24:17] What are signals that a marketplace is a good model for the idea? Because I think a lot of people come into it and be like, I want to build a marketplace. Oh, I'm going to connect these two sides. It's going to be great. [24:28] There's no marketplace in this business in this vertical. [24:31] What are signs that marketplace [24:34] dynamic and a business model is right for an idea versus no, it's not. No one ever say like, "Oh, I'm going to build Airbnb for X." It's not something that people say. [24:46] I think the signs that come to mind are one, higher fragmentation. I think you want this long tail of buyers and sellers without a handful of big players controlling the market, because [25:04] 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, you know, services, service marketplaces like Themptac, because unlike eBay, where sellers, you know, they just want to sell very clear and distinct inventory. On Themptac, 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

[25:34] And so this makes for 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. 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 uniform set of needs. And the last one I'd mention is... [26:00] 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 do 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. [26:24] Awesome. I'd love to know if there's any examples you can think of of [26:27] bad marketplace ideas that people have tried. [26:30] But I'll summarize the three points you just made, which I love. So these are signs that this is a great opportunity for marketplace business. [26:37] that there's a lot of fragmentation on both sides. There's not just like, [26:41] a small number of [26:42] companies or customers on one side or the other because if there are, why do they need you? They'll just find. Like there's five airlines or whatever, you know, you don't need like... [26:52] marketplace to match with an airline. [26:55] Then two is there's uniform needs. The needs are basically consistent. Like I just want to stay in a home. [27:01] I want a car to take me somewhere. I want a plumber. [27:04] And then there's a barrier, there's complexity to the matchmaking and

[27:08] helping someone book the thing, work with them. Finding a car, I imagine, is like, I'm not going to just flag down a car. [27:14] There's challenge there. I'm not going to just go and ask someone, can I stay in your home? [27:18] There's challenges there. Exactly. Awesome. Are there any examples of companies you've seen that are just like that will not be [27:23] That will never work as a marketplace, or here's a funny example of a marketplace that tried to be a marketplace, and it's not. I don't have a great example of that, but I can give you a... [27:32] tangentially related example of a marketplace that I don't want to throw anyone under the bus. I respect the company and the effort, but Sidecar at the time was another ride-sharing company competing with Lyft and Uber. [27:50] There's, I'm sure, a whole bunch of lessons there. They ended up 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. [28:20] want a driver that's at least like you know this or newer and so I think the theory was you know 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 uh you know feel sort of forced in this like 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 like even further right and you have this like hyper fragmentation of your marketplace and I think

[28:50] hurt their SLA is like quite drastically. If you think about the ETA, when you ask explicitly, you're like, yeah, sure. I want a new car. And you're like, slide it to like 2020, not realizing that like 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 [29:20] 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. And I think the mistake is that you, you know, unknowingly fragment your supply in a way that has a much more meaningful impact on the health of your marketplace than you suspect. [29:42] I think this is another awesome example of this, like, don't over listen to users and do what you think is going to be best for the business. And this is not even a marketplace lesson. It's just generally, you don't want... [29:55] to give users more options than they will need to be successful and happy. [30:00] and [30:01] I think Sidecar did that because they were trying to differentiate from Lyft and Uber. They're like, "What can we do differently?" And they're like, "Let's give people all these options." I think they even let drivers choose the price that they're offering. [30:10] they're right at, which made it extra complicated. They're like, "Oh my god, all these cars at different prices." [30:15] But I respect their attempt because they were just the third wheel [30:19] No pun intended.

[30:20] It's also like, ironically, it's almost the opposite advice that I usually give to companies who struggle with market health. It's, you know, if you have like different verticals, like... [30:31] try if possible to like open up your supply walls like your user is telling you like x but [30:36] Try to give them something that is tangential to what you think they want, because odds are that they are actually fine with it. There's this amazing example from Thumbtack. It's the smoke machine example. So Thumbtack, now they specialize a little bit more in home services, but a few years ago, they were also doing a lot of events. So you had DJs, you had photographers, and a lot of people were hiring for wedding DJs on the platform. [31:04] and one of the check boxes was a smoke machine. And it turns out a lot of people are checking this. They're like, "Yeah, hell yeah, I want a smoke machine, 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 when we talked 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 ultimately going to like, remove half of the supply." [31:31] And so, you know, 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, you know, simplify their cognitive load by knowing like, hey, we know you prefer a smoke machine, but we're intelligent enough to know like it's probably not a deal breaker for you.

[31:54] I love that example. [31:56] The other thing that I think is important to talk about briefly is [32:00] when you're thinking about building a marketplace, a lot of times they fail because [32:04] The business model just doesn't work. I think about a company like Cherry that tried to do Uber for car washes. [32:11] And in theory, there's like a smart idea of I'm going to just do on-demand car wash. The problem is no one's going to pay what it costs to do that to the like a car wash person shows up and washes your car. I think cleaning is another example. [32:25] There's also just like... Exact is another one that comes to mind. Oh, exact. Yeah. Where it's just like someone will come and does stuff for you. [32:31] Something, yeah. [32:34] And so I guess, is there anything you want to add there? Just like, this is another reason your marketplace might fail. Maybe just let me expand on this question. Just what are the most common reasons marketplaces fail in your experience? [32:44] And I think it's important to say most marketplace ideas fail, just like most startup ideas fail. [32:49] The most ideas period fail. Most ideas period fail. Same. Coming back to most of the things you're going to struggle with are the same things that every company struggles with outside of a marketplace. So let me just ask is... [33:00] Maybe specifically within marketplaces or even just broadly. What are the biggest reasons that marketplaces fail? [33:06] I think three 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 the thing 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.

[33:36] battle until you 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 like, you know, doing that when you're sort of early on. But I see, you know, a lot of larger companies operating for too long as one sided businesses, you know, many large marketplaces only thinking about their demand side funnel. So they run ads, they get clicks, they turn those clicks into dollars, and they try [34:06] get enough supply 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 you know half of our users we forgot that sellers are people too and they're all leaving and now we need to completely transform you know our product uh to to save the ship and [34:36] So that's the other thing that I see is, [34:38] businesses realizing that they are marketplaces with true marketplace needs too late in the game. [34:44] 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 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.

[35:14] 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 shitty 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 my companies fail. 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, [35:44] compliance for SOC 2, ISO 27001, HIPAA, and more with a single platform, Vanta. Vanta's market-leading trust management platform helps you continuously monitor compliance alongside reporting and tracking risks. Plus, you can save hours by completing security questionnaires with Vanta AI. Join thousands of global companies that use Vanta to automate evidence collection [36:09] unified risk management, and streamlined security reviews. Get $1,000 off Vanta when you go to vanta.com slash Lenny. That's V-A-N-T-A dot com slash Lenny. [36:23] Kind of as a segue from that idea of quality, I want to talk about managed marketplaces, managed supply. [36:29] So I think the reason quality is so... [36:32] such an issue for marketplaces is [36:34] because you do not own the supply and control the supply, you're a marketplace, you're not just selling something. [36:40] Quality is innately going to be a challenge. Airbnb doesn't own homes. Uber doesn't control employee drivers. They can't even legally tell them exactly what to do because they're contractors.

[36:51] So quality is always this ongoing challenge with marketplaces. So there's always this [36:55] 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 [37:04] invest a lot in training, all that kind of stuff. In a perfect world, [37:08] Unlike an idealized world, quality will be best if you own it. [37:12] But then you're no longer marketplace, your business model sucks. So I guess just any thoughts on marketplaces that are considering becoming more managed [37:21] Any advice on when it makes sense to... [37:23] move towards that spectrum and how far to go. [37:27] 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. 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 kind of intuitive. [37:50] I'll mention another example, but we'd originally sell leads to pros like plumbers and electricians. [37:57] obviously only a fraction would turn into actual jobs and revenue for those pros so [38:01] 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 marketplace move going from some version of lead to a direct booking. And did it look great? We knew we were going to improve their ROI by something like 20% maybe. And we launched this and pros hated it.

[38:31] consciously 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 those phone calls they kept me busy i felt like i was like hustling i was like about to close this customer uh and so no matter what the data says it's like oh we increased the earnings by [redacted address] and it's the right to you know to feel however they want and we saw the same thing at lyft when trying to you know make drive earnings less volatile we had [39:01] 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 sort of employment classification, right? In the US, when we talk about controlling supply, like all the lawyers are like, "No, no, no, that's not something that we do." Because, you know, if you control your supply, then they can be legally classified as employees and be entitled to a whole bunch of benefits. [39:30] 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. [39:36] 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, you know, just to close those gaps more specifically.

[40:06] most sort of marketplaces like provide some sort of coaching. You have like a review system, perhaps you have like stars for your, you know, sellers, you know, for sellers who fall below the threshold, then like coach them, provide them the right tools, the right guidance. What is the standard that you have on your marketplace and help them? [40:22] you know, meet that bar. [40:23] And for people who fall in, for the gaps that you have, then that's when you invest in more hands-on tools. [40:33] 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. [40:40] I'd love to hear about that. [40:41] Before we hear that, is there any marketplace that has been very good at... [40:47] up-leveling quality. [40:48] without becoming managed. [40:51] that did this really well that you can think of. [40:53] Yeah, there's a talent marketplace called TupTal, and they are specialized in this. They have a really high bar for quality. They claim to only have the top 1%, top 3%, I believe, of talent out there. [41:23] they advertise something like maybe like a 3% pass rate for their talent. So they only onboard like 3% of the people who apply. And allegedly, their actual pass rate is even lower than that. But they thought that if they actually advertise the actual number, it would sound fake. And so they actually say 3% because 1% would sound too ridiculous and it would discredit their talent.

[41:53] for [41:54] You know, vetting quality early on with a ton of, you know, like different checks, but also maintaining that quality. So throughout with the right coaching tools, with education and things like that. [42:06] That's a really good example. And so basically they just vet and only approve [42:10] high quality supply in their case. It's mostly engineers, right, I think, on TopTal. [42:15] Correct, yes. It's mostly engineers and designers, I think. Which you can only do if you have so much supply that has so much interest in becoming part of your platform. [42:23] But that's a really cool example. Basically, it's just like only allowed really high quality supply. [42:27] Let's hear this rental car story. So this is Lyft trying to do rental cars, right? [42:31] Correct. Yes. Yes. Yes. So this is a little bit of context. I was leading the driver's side of product at Lyft and General Motors had invested half a billion dollars in our last round of funding. And this was Christmas Eve. I always remember I got a call from Lyft CEO and General Motors CTO. And we decided to build a rental company, essentially. And the reason for it was really fascinating. [43:01] but they were forced to sell at auctions. They didn't really know what to do with, [43:07] And from our perspective, we have this massive supply gap. We've talked about this before, but with this huge supply crunch, we were growing super fast and couldn't hire drivers fast enough, couldn't onboard drivers fast enough. And when we looked at the market, we realized that 50% of the job seekers and welfare recipients in the US don't have a car. Right. So that was like that was our supply gap. This was a huge pool of people that we just couldn't tap into because they didn't have a car. And so by renting cars, we could essentially manufacture our own supply. Right.

[43:37] We could dial this up and down. We could be very surgical about like, how many vehicles do we bring in? Which markets do we bring this in? At what price, right? We could even offer to pay for the car if they drove 30 hours a week and completely transformed the lives of those people, right? Now we allow them to have true mobility. They can go buy groceries. They can go take the kids on vacation. [43:58] a huge win-win for everybody with something like this. And I think in three months, we had built a rental company from the ground up. And within 18 months, I think we were the fourth largest rental fleet in the US. [44:12] But all of this stemmed from this gap that we saw. It's not about controlling the drivers in general. It's about, okay, we want to be surgical. We want to control the quality of the cars on the platform. So we talked about that. That's a great example. In the markets where... [44:27] we thought the vehicles of quality was too low. We knew we could onboard more rental vehicles that were more recent to raise the average age of a vehicle and platform. So it gave us more control in a much more surgical way, I guess. [44:43] So it's not that you are launching a rental car service. The idea was add supply and give drivers a car so that they can become drivers. [44:53] It was a bit of both. We actually launched, we had vehicles that drivers could rent from Lyft to drive on the platform and also to drive for their personal needs, essentially.

[45:10] Got it. Okay. And then did this actually work and have impact? Was this a good idea? Yeah. Okay. Yeah, yeah. It had a tremendous impact. Like I mentioned, I think we scaled this sort of exponentially to become, I think, again, like the fourth largest rental fleet in the US because it was so effective for us, both because we had the right amount of control, but also those drivers were incredibly loyal to us. [45:40] car, but only if you don't drive for the competition for Uber, and only if you drive at least 30 hours a week. So this again provided us with much greater retention, much higher engagement, and was a real incentive for us, but also for the drivers. Awesome. [46:00] Maybe the reason that's most interesting is this is along the spectrum of a managed marketplace. It moves closer to [46:06] like you guys sort of like are paying and covering costs of cars [46:10] it makes it less just like this simple, highly efficient marketplace. [46:15] Exactly. Yeah, it's the marketplace version of, you know, maybe like your black car fleet owner has like their fleet of vehicle and they have like people. So this was like the marketplace version of doing that. And it's also just a differentiator because Jim and you guys were close. And so you had this lever that Uber didn't have. [46:34] Amazing. Another area that I know you spend time on that I think is really interesting and I think could be helpful to people to hear is the mentorship program.

[46:43] and kind of the ambassador program that you had that lift. [46:45] and how that helped you scale much more quickly than other folks were able to. Can you share that story? Pretty early on at Lyft, this was 2014, 2015, maybe. [46:56] Uber was basically like 30X our size. They had 30 times more revenue, more people, more liquidity, like everything you can think of. They were growing like crazy. And we had a bit of this existential moment, as you can imagine, where we were wondering how we're supposed to compete with that. And we had to be super clever. Everything that you did at the company had to be 10 times more efficient per person than the competition just to survive. That was the bar, just not to die. [47:26] of pressure on us, but we basically found kind of a clever way of onboarding drivers at a fraction of the cost and resources. So let me give you a little bit of context on how the onboarding flow worked. So at the time, the last step to get onboarded as a driver was after you background check and your driving record check came back, you had to do a visual inspection of your car, a quick test drive, some light training, and we would check your documents. We would check that you are the person [47:56] And Uber at the time would launch a team on the ground. They would go and open an office and they would have DMV style group onboarding sessions and car inspections. [48:05] And we did this as well in our first three to four markets. But you can imagine the overhead, right, and the lead time. You had to go and you had to find office space, sign a lease, hire employees, right? Like huge, huge lead time.

[48:19] We thought about it and at the time, a huge competitive differentiator for us was our brand. As a passenger or as a driver, why would you use a platform with lower liquidity? [48:29] As a driver, you have lower earnings guaranteed. As a passenger, you have like longer wait times. Why would you use a service like that? You do because of the brand, right? Because of its values. It's how it makes you feel. And so we had, you know, the pink mustaches at the time. We had like this like very strong brand identity. I think a lot of that has been lost now. But we also had this amazing community of drivers who were fierce advocates for the brand. [48:59] supply engine where we would pay our best drivers $35 per mentor session. And mentor session was essentially replacing his onboarding flow. So it was basically another driver looking at your vehicle, to check all your documents, take photos of your driver's license and all that stuff and take you on a short ride along. And the benefits of this were absolutely mind blowing and kind of unexpected for us on all sides. First, the mentors were our very best drivers and they were [49:29] for the brand, right? So what they did was they would share like personal tips on when and where to drive, right? Oftentimes they'd share the contact info. [49:36] And this created some tremendous leverage and social proof for those new drivers who were on the fence about taking strangers into the car. It's actually quite funny because we had the brightest minds in the company, like writing the best marketing emails and copy, like, hey, like drive on, you know, hop on the car and drive this Saturday. And you had all those drivers, all those mentors. So, like, no, don't listen to those guys. Like, here's what you should do. Go, you know, on Tuesday at 2 p.m. Text me. I'll tell you where the good spot is. And this is like how you're going to get right.

[50:06] get rich and make a lot of money. And this recondition lever was just so much more powerful than anything we could be telling you. And so very, very efficient activation lever for the new drivers. For us, also very incredibly scalable. We could fly a small team to rigorously vet and onboard maybe 10, 20 top drivers, and then they'd fly to a different market. And we would let the rest of our drivers be onboarded by those mentors. [50:34] And even for those mentors, for those top drivers, it was an incredible recognition lever. For them, if you were like a 4.9 driver, you had enough rides, you knew you had a chance to make it into being a mentor. And this provided additional earnings opportunity for you. If you did two mentor sessions in an hour, you could make 70 bucks an hour. You could take a break from driving if you're tired and just do some of those. It felt like getting promoted at a job. And so it actually had a huge impact on the retention of our very best drivers, which was kind of unexpected. So [51:03] a lot of really, really interesting benefits. And we actually leaned into this and built a couple of really fascinating variations of this for a while. But this allowed us to match most of Uber's footprint with a 10th or a 20th of the resources at incredible speed, I guess. [51:21] That is an amazing story and it's such a great lever that I totally agree I don't hear people using and I wonder why. [51:27] So what I'm hearing is it was cheaper. [51:29] The drivers were making money. I imagine the drivers trained by the mentors ended up being better drivers. That's what we saw at Airbnb. Hosts that came in through a referral ended up being better hosts for whatever reason.

[51:42] And you're saying basically this is what allowed you to compete with Uber at a much smaller scale. [51:46] And... [51:47] and much less money raised. [51:50] Amazing. Exactly. [51:52] You said there's a couple of variations in it. Is there anything interesting there to share, just things that you built as a follow-up? [51:57] based on the success. So the next step in that journey was basically we [52:02] we're growing like crazy, but now we had, we had cracks like the activation phase, but now we had a whole bunch of people like dropping off in the phone, like before activation. Like, so they didn't enter their SSN or they didn't enter like the right info for us to run like all those checks and the previous steps of the onboarding flow. And so we built a team of, you know, hundreds of account executives and their job was just like pick up the phone and like call those drivers. And so we had the same, you know, aha moment, like, could we get, you know, some [52:32] this. And so we did this and we launched another role, we call them recruiters. And so as a recruiter, as a driver, you could just like, if this was quiet on the road, you could just hop on your phone and you would have a mini sales dashboard where you could claim leads. And this was a driver who had dropped off in the funnel. And you had a Twilio phone number, you could just call them and text them. And same thing, those guys were outperforming our very best trained salespeople,

[53:02] code, please?" It's like, "Hey, my name is James and I'm a fellow driver as well. Lyft told me that you have a complete application. Do you have any questions? Do you want to come to your house where we can do this together?" [53:13] And we would pay them 20 bucks, you know, per person that they like converted to activation. And so something like incredibly scalable for us. Another way for us to reward and recognize like our best drivers. And it also provided like a really interesting way for us to like smooth out the supply and demand. The problem with a marketplace like Lyft is that you have like this big spike. So like everyone wants to drive on a Tuesday at 2 p.m., but everyone wants rides, you know, on a Saturday at 2 a.m., right? [53:43] And so how can you manufacture demand during those low utilization times? This was a great way to do that. Now you could wait on the road and still make money while just saving your car while waiting for the next ride. So this was another iteration of this model that was really cool. [53:58] Amazing. That is so cool. I've just... [54:00] I just know the feeling of being on a team, coming up with this idea and working must feel so great. Just like, holy shit, look at this. Look at all these cool things that we can do with our supply. [54:12] Something I wasn't going to get into, but it might be interesting just to hear if you have thoughts on this. So I'm looking at, so I've been a huge fan of Lyft from the beginning. I used Lyft the very first weekend it came out in San Francisco and there was like five drivers. [54:24] It was like a beta test. [54:25] I was friends with someone that worked at Lyft early on, and it was just like, man, Lyft's the best. I was like... [54:30] All Lyft, Uber sucks. I hate that. I want to give the fist bump or the mustache. So great. Today though, I was just looking at market caps. So Uber is worth $150 billion.

[54:41] Lyft is worth $5 billion. [54:44] I'm curious if you have thoughts on just like, it feels like Uber has won at this point and I don't know where Lyft goes. I know you've, [54:51] your heart is with lift and you worked at lift for a long time. I know it's not, uh, it doesn't feel great to see how things have played out necessarily, [54:59] I'm curious just to hear your take on just like, what do you think Uber did if you look back that allowed them to basically win? And where do you think Lyft goes from here? What do you think happens with Lyft? Like they're still worth $5 billion. It's still a huge, amazing, successful business. But just where do you think things go? [55:14] Yeah, I think it all went south when I left the company. I'm just kidding. No, I, and again, I have to call out the fact that I haven't been close to like sort of Lyft and their business and strategy for like many years at this point. So, [55:35] take this to the grain of salt. This is my very naive perspective. But I think, to me, perhaps, like the biggest blow to Lyft's business was somewhat inherent to the vision. Lyft's vision was always anchored around transportation, people transportation. The founders were deeply passionate about moving people. They were passionate about transforming [56:05] like how cities are designed, how roads are designed. [56:08] And so that meant investing in dynamic shuttles and things like that. And there's a lot of experimentation that went to that. But it also meant that Lyft never invested in things like food delivery or like,

[56:23] in parcels and things like that. And I think that crushed them during COVID, essentially. I think Uber had, I think at some point, like their slogan was, you know, moving in like bits and atoms or something like that. But I think it implies this, you know, this notion of [56:44] being a logistics platform for assets in the world, right? For transporting people, for transporting things, for transporting like... And I think they've built, they've invested a lot in like... [56:56] trucks and food delivery and all those really exotic things that Lyft had never any intention to invest in, not even because of the lack of resources, but because this was in part like a distraction from our vision. We wanted to change how people move around in cities. We wanted to reinvent public transportation, where we did not want to be a DoorDash competitor and help you get the donuts during COVID. And a huge part of it also was leaning heavily in shared rides. [57:26] how do you reinvent public transportation? It's like every car is a dynamic bus. And now like there's no bus line. The bus line is like always running, right? It's always like by your house. So a lot of our investment, I think, and thinking went in like that direction. And the last thing that people wanted with COVID was to be in a car with like five strangers. [57:44] And but what people wanted is like food delivered to the house, right? And so that's sort of a, I know that the business like, you know, had a huge blow during COVID, whereas I think Uber was

[57:56] the business was. And so it's funny now because I think Lyft actually killed shared rides, which was just so core to their identity. They were like the first ones to launch this. And so, yeah, the new CEO, I think, killed the shared rides, which I'm really sad about. Yeah, so I think it indicates like a very different vision now, a very different direction for the business. And yeah, that's my take, I guess. Interesting. So essentially, COVID really [58:22] F them because their strategy was always about transportation. [58:26] And when nobody needs a ride and people want food, [58:30] uh, [58:30] Strategically, Uber made a really good move expanding into food delivery, which I think was a bigger business than rides for a long time. I don't know where it's at today for Uber. [58:38] And Lyft didn't have that. And it's hard to recover from a time like that. So it sounds like it's a combination of strategy was pointing Lyft in a certain direction and circumstances in the world, just like. [58:49] And losing me. [58:51] I'm losing bet. I'm looking at the... So you left in 2019, March 2019. [58:57] Is that one in public? Yeah. Yeah. And it's like all downhill from then. [59:02] And then during COVID, actually, when there was a big bump, which I think when people started writing again, [59:08] And then it went down again. So I think there is a correlation there. So there we go. That's the thing. Don't ever fire Ben. Don't let Ben leave. That's our takeaway. I was not fired. Yeah. Just to be clear. [59:19] I'm just, okay. I was just different ways you might leave a company. Don't let happen. I'm kidding. Okay. So there's two more things I want to spend a little time on before we close up.

[59:29] One is you, your work in Europe, so you're a product leader in Europe. And I want to hear a little bit about what it's like to be a product person in Europe. [59:37] And then too, I want to hear about the startup. So at this point, no one can actually fire you. You have your own company that you're running. [59:42] And I want to spend a little time here. [59:43] Usually we don't spend time on this sort of stuff, but you're working on something very cool. [59:47] I think is going to be really helpful to a lot of people in a really meaningful way. [59:50] So I'm going to spend a little time there. But before that, [59:53] So you're living in France now. [59:56] You... [59:57] Before you started your company, you were interviewing for CPR roles in France. You worked with a lot of French companies, European companies. [1:00:03] I'm curious what you've noticed might be different in the cultures of tech companies in France and Europe in general versus the U.S. It's been really fascinating. I think so. My entire career has been in the U.S. And I'm just starting to understand what the European and the French market in particular looks like. And my read so far is that product management has really exploded, I think, in Europe in recent years. [1:00:33] In the US, I think you have this inherently very liquid and dynamic market. I think that's my interpretation of it, but I think it leads to greater ownership and accountability for people and product at all levels. So, um, [1:00:49] Product managers and leaders, they join a startup and you're immediately in charge of a relatively meaningful piece of the business with genuine autonomy oftentimes.

[1:01:00] Doesn't always happen, but oftentimes I think that's the case. And if things don't work out, well, there's this expectation that you'll be managed out. This is just... [1:01:09] There are countless memes on LinkedIn about the tenure of CPOs at tech companies to illustrate that. I think in France, the market is much less liquid. So it's incredibly difficult to change jobs and it's very expensive to fire someone in France. So it seems to lead to two effects beyond the obvious job security. One is I think PMs tend to have less autonomy and ownership and a little bit more like micromanagement. [1:01:39] and I see founders and managers struggling to let go of control a little bit more, again, because it's understandable in a way. You don't have as much control as you do in the US. And so it is still a lot of really fascinating effects. You have startups who tend to wait a little bit longer before hiring, especially product. The art of product is a little bit less of a thing. [1:02:09] outside of the people who practice it. And you have a lot of, you know, really interesting outsourcing also. You see startups and companies of all sizes actually relying on great product studios like Mozza to build end-to-end products from the ground up, right? So something that's been sort of really, really interesting. [1:02:28] Another... [1:02:29] slide that I see is, you know, this like dominance of business over tech in France. There isn't as much of a cult of technology and software engineering in France as there is in the US. And so the French Ivy League schools are business schools, like I should say, and the most highly valuable skill that you get is soft skills around management and business. It's, you know, it differs from like the stereotype of the, you know,

[1:02:53] CS degrees, Stanford dropout that you have in Silicon Valley. And I think because of a few of those things that I just mentioned, less liquid job markets, but also less liquid financial markets. The last thing that I've observed that's kind of interesting is that's also around ownership, I guess, is equity is much less meaningful in France. So of the product leaders that I talk to, most of them consider their equity to be virtually worthless. None of them know of anyone who's made [1:03:23] thanks to their sort of equity. So it's seen as like a nice bonus, but it's not the token of ownership and the promise of future wealth that it can be in the US when you join a startup. For exec roles, I think it's often like sub 10% of their total compensation, whereas in the US, it's very often like more than 50% of your competition would be equity. So that's been kind of interesting in terms of the dynamic, but it's also been [1:03:50] Really interesting to just see how vibrant the startup culture is here in France. You have a truly exciting innovation happening, especially in AI. You have a lot of French companies at the forefront of this, like Mistral AI and Hugging Face and things like that. And also how... [1:04:04] how [1:04:05] It's been exciting to see how the government is leaning into that as kind of a catalyst for this innovation. [1:04:12] I think the French government has dedicated something like $2.5 billion in funding to support French AI excellence by 2030. So they're running a lot of internal government incubators to try to disrupt some of the government functions from the inside. And they're hiring top talents to do that. I've met some of the people working on this. It's just really fascinating. It makes me super excited about what a federal startup task would be inventing that DMV would look like.

[1:04:42] the whole space and how it differs from the U.S. [1:04:45] Fascinating. [1:04:46] So I know there's also like AI regulation that feels really strange in Europe, but I think that's EU based, right? Not like France specifically. [1:04:54] Yeah, that people are not excited about. There's just a lot of fear of AI, and so there's a lot of [1:04:59] regulation talk in Europe. I know, I'm a big Android guy and a lot of the features like Gemini and all this is only available in the US. Now that I'm in France, I see the difference a little bit. Interesting. [1:05:13] So the cultural differences you spoke of, [1:05:17] Thank you. [1:05:18] Do you think they're rooted in the fact that people don't move jobs often? Or is it like... [1:05:24] culture people just don't learn [1:05:26] to work in the way that people learn to work in the US in the product role. [1:05:31] What do you think is the root of why things are so different? [1:05:35] I'm not quite sure. It's a good question. My take, and I think this is, I'm sure, very naive and reductive. And I know this is one of my core principles, so I'm sure I also have a internal vision on this a little bit. But to me, one of the... [1:05:51] the biggest difference that I see is really around like this concept of ownership and accountability. Whereas in the US, and again, I saw it, I'm sure you saw it earlier, maybe you see a lot of companies, not everywhere, but [1:06:01] A lot of companies will hire you, give you a big chunk of the business, and it's up to you to prove yourself out. You have six months, you have a year. It's up to you to show impact. I think that the French employment model is less conducive to this type of dynamic because employment is much more rigid. So you have much less of this...

[1:06:23] you know, hire now and like prove yourself out. It's much more of like prove yourself like beforehand. And, and if you've made a bad hire than as a founder, like you become perhaps like a little bit cagey about like your vision. You want to like be more hands-on because you made a bad hire. It's not like someone perfect than like, [1:06:38] you'll kind of make your work, but it means like you'll be more hands on and like the work of PMs daily. And perhaps we'll think like, oh, maybe I don't need product managers who won't like own my vision. I'll hire project managers or something like that. Right. So it's perhaps like slightly more conducive, like those types of dynamics. [1:06:53] And you're saying that's in part because it's harder to fire people in France and in Europe. [1:06:57] Yeah, I think so. And it's not just about firing, I think, to be clear. I just think it's like culturally, the market seems like a lot less like liquid and dynamic. So people like people don't move around as much. They kind of stick around for a long time. [1:07:09] Yeah, exactly. Yeah. Got it. And it sounds like there's also just like a cultural difference of like founders. [1:07:16] innately or much more i am in control and i'm not going to hire people and trust you to take this thing off i am just going to run the show like it's basically paul graham's founder mode is like already instilled in everyone maybe yeah maybe maybe that's a little bit and i think also it's this culture of like business so like very business-centric sort of culture uh you have and again it makes sense right like the markets you have less venture capital you have less you

[1:07:46] you need to have like a strong business. Like the business gaze is at the center of your happy business. Whereas I think oftentimes in the U.S. you have, again, it's a little bit, um, [1:07:56] it's very typical but it's a very like tech or product centric view of the world or it can be uh you know a very like tech or product centric view of the world like we will be like this product this is like the vision of the product and sometimes even like you know the business model but like will follow right uh and uh and in france i think like the business model like has to be like front and center perhaps for each like be able to raise venture capital for each be able to like even exist right so it means like it attracts a lot of like business uh you know minded uh you [1:08:26] So perhaps then like tech-minded or product-minded entrepreneurs. Got it. [1:08:30] If someone wants to help their company in Europe and France, [1:08:35] operate more closely to the way companies in the US operate. [1:08:39] Do you have any advice for them? I know you talk and work with a lot of companies in Europe. What do you help them change and see differently? [1:08:47] yeah yeah it's a great question i uh i haven't like fully cracked that and i think it's uh it's a really hard question i'll give like some sort of small pointers uh that have helped at least some of the companies that i've talked to but the one is equity i think there's like a desire from a lot of the founders that i talk to to like to give equity uh to employees but because it's not in the culture yet like i think employees also have like an under appreciation for like equity uh like well yeah it's nice but like i don't know what's going to happen like i just

[1:09:17] there's less of this sense of, again, ownership that you can have in the US. And so I think leaning into that and investing in education around equity, it's the case also in the US. I'm convinced 80% of people just don't feel interested in their equity. But I think leaning into that, especially in Europe, to help people understand the value of their equity, help them by telling more about the story of the business, [1:09:47] for their future equity. I think anything along those lines, I think, can help cultivate this, like, greater ownership mindset, I think, for people. [1:09:58] And then, yeah, and then I think another big piece again is, at least to me, this is a big recipe to successful product teams is to develop teams that revolve around this concept of ownership and accountability. [1:10:28] to and to thrive. [1:10:29] Again, I usually don't spend time on this sort of thing, but I just think what you're working on is extremely cool. And I think it's going to be really meaningful to a lot of people. [1:10:38] And so I just want to spend a few minutes giving you a chance to talk about what you're working on now. You started a company. Is this your first company the year you started? [1:10:45] It is, yeah. First build company, then set projects. Yeah, yeah, yeah. There's an LLC, there's a C Corp, or yeah, it's like filed, there's paperwork. Amazing. Talk about what you're building.

[1:10:55] help people know how to find it if it's right for them. [1:10:58] Yeah, I have to say, like, entrepreneurship has been a very humbling journey. I think that the zero to one is way harder than anything else I've done so far. And I feel like when you're used to building and scaling products within companies, you kind of take for granted, at least I did, you take for granted that the problem space has already been validated, right? You have like some brand equity, even if you launch a new vertical, like, you know, there's like an existing user base, there's a validation of the problem space. [1:11:28] to be super overwhelming and lonely, but also super exciting. With tons of condensed learnings, it's been a really interesting journey. [1:11:37] What brought me there is my wife started to have some health issues, but three years ago now, it's partially why we decided to move to France last year, just for a couple of years. She's had this undiagnosed condition and chronic pain, and we saw just how much of a nightmare it was to manage her care and to navigate the healthcare system in the US. So we'd wait three months for an appointment for a neurologist, then they'd see her for maybe eight minutes. Average appointment time in the US is between 10 and 12 minutes. [1:12:07] say like hey Tesla look normal like sorry like you should just go see this other specialist instead [1:12:12] We'd wait another few months, see another specialist. And with a lot of anxiety, a lot of pain, as you can imagine, like all those things, you have another eight minute slot with someone. And it's like, oh, why didn't the neurologist do this test? Like, I can help you like this. You know, this makes no sense. And so you just like it ends up feeling like incredibly isolating. Like the whole time, you know, we just felt completely alone. It was just like us and Google. You know, we felt we kept getting conflicting advice from doctors.

[1:12:42] consider. I spent all my nights reading through research papers to say, "Hey, what is the academic consensus on this particular treatment that the doctors don't seem to know about?" And [1:12:54] Throughout this whole process, it felt like no one really had her back. No one within the medical system was fighting for her. The way that your family doctor might have fought for you 20 years ago, knowing everything about you and being like, Lenny, let's talk about this. I know your uncle had this. There's this sense of advocacy that came from your family doctor that just doesn't exist today. It's not uncommon for doctors to have thousands of patients that they see just a few minutes each year. [1:13:24] half of Americans have at least one chronic condition or have to deal with some sort of, you know, complex health issue largely on their own. You see a lot of those large online communities revolving around chronic conditions or chronic pain and trying to make sense of it and advocate for themselves. [1:13:42] I think I want to be clear, in my mind, the problem is obviously not about the practitioners, right? It's systemic. It's just growing financial pressure from private equity firms. It's just countless other factors. But you see the physicians being overwhelmed, overworked, burning out. And you see that pressure just only increasing, I think. So I basically spent the next six months just talking to hundreds of patients and doctors and experts. [1:14:07] And what we built is basically a platform to help people fight for their health. And so we want to close the gap between patients and the healthcare system. There's this critical layer of the system that's missing, I think. People are navigating life-threatening or debilitating conditions largely with Google. And at some point, you just get tired of fighting for yourself. So we connect people with complex conditions, typically, with their own health advocate. So it's essentially like their own health assistant.

[1:14:37] get your care so we find appointments for you we help you prepare your appointment we make sense of a diagnosis or test results we spend hours like you know researching solutions and potential treatments and just more generally we do everything we can to help you just better advocate for for themselves basically. [1:14:55] And yeah, we launched in the US an early version of this a few weeks ago. And the engagement has been really, really, really mind-blowing so far. We're helping cancer patients, people with a lot of those niche chronic conditions, and literally harassing the doctor's office. Like, hey, we still haven't received that referral. All the things that you just get tired of doing when you're dealing with so many appointments and when you're having to manage a condition like this. [1:15:25] this user was our partner or our parent. You'd likely spend all night coming to the research. You'd call all the providers in the state to be like, "Hey, who has an appointment?" Because there's no PT available for the next two months. We'll find you a PT available sooner. So we're building the engine to do that at scale essentially and make people feel like they're not alone and that someone is fighting for them. [1:15:45] Super cool. [1:15:46] It's sad that we need something like this, but we do because the healthcare system is so not ideal. [1:15:53] And so it's basically someone in your corner that's just, that's like in the inside that knows how these things work, that is there to help you through the process. What's the company called? Where do people find it? [1:16:02] Yeah, it's called Nura Health and our website is NuraNurra.me. Awesome. And we'll link to it in the show notes. And just to be clear, I'm not an investor. I'm just like excited about this thing because I think a lot of people need this. Just to loop back to what we've been talking about, it's not a marketplace. How would you describe this business in relation to marketplace companies?

[1:16:22] We're ignoring the marketplace dynamics. I'm following my own advice. I'm jumpstarting one side of the marketplace. The health advocates were jumpstarting this side for now, and we're only focusing on what I think is going to be the hardest side for us, and it's going to be demand. How do we find those people? How do we create the right value proposition for them? That's what we're focused on. In the future, there may be a marketplace component, is what I'm hearing. [1:16:49] Yeah, exactly. Interesting. Very cool. [1:16:51] Ben, is there anything else that you want to share, mention, leave listeners with before we get to our very exciting lightning round? [1:16:59] No, no, thank you. [1:17:01] Well, with that, we've reached our very exciting lightning round. Ben, are you ready? Woo! I'm ready. [1:17:07] All right. [1:17:08] First question. [1:17:09] What are two or three books that you've recommended most to other people? I'll give you books in different directions. One is Misbehaving, the Makings of Behavioral Economics. I'm really interested in behavioral economics. I love this intersection between economics and human psychology. It's a great analogy for products, so that's a great introduction to this field. The second book that I recommend a lot is Range, Why Journalists Triumph in a Specialized World by David Epstein. [1:17:39] a lot of things, but it's made me feel like I'm decent at many things, but I'm good at nothing. I'm very good at nothing. And so even in my career, I'd see all those PMs who are machine learning gurus leading conferences on weekends that are contributing to AI think tanks. I just feel like a generalist. So if you feel this way, this is a good book to make you feel a little bit better about yourself and your imposter syndrome, at least it did for me. And last one, nothing to do with business, but Immune by Philip Detmer.

[1:18:06] This is the creator of the YouTube channel, Kurskosakt. I don't know if I'm pronouncing this right, but it's a science channel. If you're even remotely curious about how your body works, how your immune system works, it's an amazing book that's really, really fun to read. Super entertaining and just great biology and fun book, I promise. [1:18:26] I've been trying to get the author of Range on the podcast. I have not had success yet. So if anyone knows him, his name is Epstein. [1:18:33] David Epstein, please connect me [1:18:37] I would love to have him on the podcast. I really love his message of just the most, like basically it's the most successful people are, [1:18:45] Is it that you should be a generalist or that you can be very successful as a generalist? Is that the message? You can be very successful as a generalist, yes. Yeah, great. I completely agree. That's been me too. [1:18:54] Next question. Do you have a favorite recent movie or TV show you've really enjoyed? [1:18:57] To be sure, I haven't seen anything lately that's been mind-blowing, but I'll share an old new one. I've re-watched The Last of Us recently, and it's an old favorite. I love the TV show. I like the game, played the game many years ago, and love the TV show. [1:19:11] When the heck's the next season coming out? I'm excited for that. I know because I know the game has more. [1:19:16] 2025. Oh man. [1:19:18] So long. Okay, good to know, though. Next question. Do you have a favorite product you recently discovered that you really love? Maybe a little bit behind the curve on this one, but I've been loving the Arc browser. I don't know if you use it. Oh, I love Arc. It's my main browser. Absolutely. I love it. Amazing. So, yeah, you know all about it. Yeah, it's been really fun. Yeah, it's like just the onboarding of the Arc browser is amazing.

[1:19:44] such a lesson in onboarding. They do such an amazing job. [1:19:48] That alone is a great... [1:19:50] thing to do as a product person, just see how they do onboarding. [1:19:52] I was like, I've been using Chrome for like 12 years or I don't know how many years. It feels like such high friction to change my entire life. In like eight seconds, it was done. It felt like home. I was like, wow, this is way faster than I expected. [1:20:04] Two more questions. [1:20:06] Do you have a favorite life motto that you often come back to, repeat yourself, share friends or family? I don't have anything particularly philosophical, unfortunately. I lived in Dahouf for a few years. I live now in the French Alps. So I have a frame with John Muir's quote, the mountains are calling and I must go. I feel like this is my grounding place. The mountains are my happy place. I don't share that work often. I don't like peace out in the middle of meetings like the mountains are calling, I must go. [1:20:36] sort of, yeah, more regals for me. [1:20:38] That's beautiful. My nervous system relaxes just hearing that quote. [1:20:42] And I know you live in a mountainy part of France, so you've done it. You've [1:20:46] Mm-hmm. [1:20:47] You've listened to the call. [1:20:49] Final question. [1:20:51] You live in France. The Olympics are just in Paris. Did you go to any of the games? Did you watch any of the games? Anything stand out to you but the Olympics that were not so far from where you are now? [1:21:02] Great question. I did not see any live events, unfortunately. Perhaps the highlight for me was I'm a big mountain biker, but in the biking realm, I loved the men BMX event where all three men on the podium were French. So this was kind of a...

[1:21:24] Great moment for France. I didn't even know that was an Olympic sports. It's a BMX, like, mountain... [1:21:29] like dirt by kind of race. [1:21:32] Yeah, yeah. [1:21:33] So cool. [1:21:35] Amazing. Ben, thank you so much for being here. Two final questions. Where can folks find you online? And what else are you doing that people can check out if they want to learn more? [1:21:44] And I can listen to this beautiful to you. [1:21:46] Yeah, you can find me two things that are perhaps helpful for people out there. One is I have a Reforge course. So if you're curious about Marketplace, if you want to dig deeper into Marketplace growth, I have a course on Reforge. We're about to do our fifth or sixth cohort, I think now. It's been going really well. We've been working with tons of really, really cool marketplaces going much deeper into some of the topics that we just talked about. So if you're interested in Marketplaces, I would say check this out. [1:22:16] Is it founders or is it like PMs at larger marketplace companies? Who is this perfect for? [1:22:21] We've had both founders and PMs and sort of like heads of product, but it's my strong recommendation. It's people that have product market fit. Again, per our conversation, if you don't have product market fit, wait a little bit before enrolling in this course. Focus on your core business before worrying about the marketplace dynamics aspect. [1:22:44] And then I get you off. There's something else you're going to point people to. [1:22:47] Oh, and just Nura, the company that we're building, anyone that you know or if you yourself have sort of chronic or complex conditions, and if you feel like you need help managing your health and navigating your care, you know, would love to help or hear how, what you need and how we can help you. And our website is Nura.me, N-U-R-R-A.me.

[1:23:09] And then how can listeners be useful to you? [1:23:11] If you have advice, if you know anyone in the space, if you're interested in learning more about this, if you have advice, if you have learnings, if you know anything about this, I would love to hear it. [1:23:20] If you have hot takes about Marketplace, if you disagree with any of what I've said, I'd love to also hear it. I love it. [1:23:26] Ben, thank you so much for being here. [1:23:29] Thank you so much for having me. It's been a dream come true, finally. [1:23:34] Same for me, Ben. Bye, everyone. [1:23:39] Thank you so much for listening. If you found this valuable, you can subscribe to the show on Apple Podcasts, Spotify, or your favorite podcast app. Also, please consider giving us a rating or leaving a review, as that really helps other listeners find the podcast. You can find all past episodes or learn more about the show at Lenny'sPodcast.com. [1:23:59] See you in the next episode.