Dan Hockenmaier is an expert on marketplace strategy and growth. He was previously the Director of Growth at Thumbtack as well as a partner at Reforge, where he co-created the monetization track. Currently, he is the Head of Strategy and Analytics at Faire. In today’s episode, Dan shares the building blocks of a growth model, important considerations when building your growth model, and how to get started. We also chat about retention best practices, the complexity of building a marketplace, the future of marketplaces, and when it makes sense to add a SaaS business to a marketplace, and vice versa.
Where to find Dan Hockenmaier:
• Twitter: https://twitter.com/danhockenmaier
• LinkedIn: https://www.linkedin.com/in/dan-hock/
• Website: https://www.danhock.com/
Where to find Lenny:
• Newsletter: https://www.lennysnewsletter.com
• Twitter: https://twitter.com/lennysan
• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/
Thank you to our wonderful sponsors for making this episode possible:
• Amplitude: https://amplitude.com/
• Flatfile: https://www.flatfile.com/lenny
• Eppo: https://www.geteppo.com/
• Reforge: https://www.reforge.com/
• Casey Winters on Lenny’s Podcast: https://podcasts.apple.com/us/podcast/how-to-sell-your-ideas-and-rise-within-your-company
• Faire: https://www.faire.com/
• Dan’s blog post on the future of marketplaces: https://www.danhock.com/posts/the-future-of-marketplaces
• Careers at Faire: https://www.faire.com/careers
In this episode, we cover:
(00:43) Dan’s background
(04:01) What is a growth model?
(07:20) The building blocks of a growth model for your own business
(10:22) The value in building your own model
(11:12) The importance of retention over growth
(14:49) Getting started building your model
(19:18) The growth model at Thumbtack
(20:36) The importance of the early user experience for retention
(25:02) Why is a marketplace a good business?
(28:23) Health metrics for marketplaces
(33:47) Supply and demand, and why you shouldn’t neglect demand
(36:23) The role of ROI equations and how to use them
(39:16) Why you should tread lightly when working with marketplaces
(42:43) Expanding marketplaces
(46:50) How marketplaces can add a SaaS offering, and why adding a marketplace to a SaaS business is trickier
(49:47) When is there an opportunity to unbundle?
(54:43) B2B marketplaces
(56:36) What is fragmentation?
(58:46) The future of marketplaces