Lenny's Podcast: Product | Career | Growth - How marketplaces win: Liquidity, growth levers, quality, and more | Benjamin Lauzier (Lyft, Thumbtack, Reforge)

Episode Date: September 29, 2024

Benjamin Lauzier has been building and scaling marketplaces for almost 15 years. He was the VP of product and growth at Thumbtack, where he rebuilt the product team and Thumbtack’s growth levers, re-architected their revenue model, and helped double the company’s growth within three years. Prior to Thumbtack, Ben was at Lyft for six years, where he led the supply side of the product organization to a point where 1% of U.S. workers were driving for Lyft every month. Currently, he advises marketplace teams and founders, teaches a Reforge course on marketplace growth, and has recently launched a health tech company called Nurra, which connects users with care advocates to navigate the health-care system. In our conversation, we cover:• What defines a marketplace business• Strategies for growing supply and demand in the early stages• How to measure liquidity and other marketplace health metrics• How to evaluate if a marketplace model is right for your idea• Lessons from Lyft, Thumbtack, and other successful marketplaces• The differences between product management in the U.S. and Europe—Brought to you by:• Eppo—Run reliable, impactful experiments• Paragon—Ship every SaaS integration your customers want• Vanta—Automate compliance. Simplify security—Find the transcript and show notes at: https://www.lennysnewsletter.com/p/how-marketplaces-win-benjamin-lauzier—Where to find Benjamin Lauzier:• LinkedIn: https://www.linkedin.com/in/benjaminlauzier/• Ben’s Reforge course: https://www.reforge.com/courses/marketplace-growth/details—Where to find Lenny:• Newsletter: https://www.lennysnewsletter.com• X: https://twitter.com/lennysan• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/—In this episode, we cover:(00:00) Ben’s background(02:24) Defining a marketplace(07:52) Challenges in building a marketplace(13:28) Methods for growing supply(15:57) Understanding marketplace liquidity(21:36) Identifying product-market fit in marketplaces(24:10) Evaluating marketplace business models(27:20) Common pitfalls and failures in marketplaces(36:23) Managed marketplaces and quality control(42:26) Lyft’s rental car initiative(46:35) Mentorship and ambassador programs(51:21) Driver recruitment strategies(54:12) Lyft vs. Uber: a strategic analysis(59:24) Cultural differences in tech: Europe vs. U.S.(01:10:30) Building a health advocacy platform(01:16:52) Lightning round and final thoughts—Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email [e-mail].—Lenny may be an investor in the companies discussed. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.lennysnewsletter.com/subscribe

I think when you're running a marketplace, you tend to sit in your ivory tower a little bit, looking at stats and thinking, I'm like, if only we could get people to do X, it'd be better for everyone, right? I certainly, you know, 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 counterintuitive. But my take is I'm a huge believer in market forces and empowerment. So provide guard rails 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 and hands-on tactics just to close those gaps more specifically. 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-architectedgeded the revenue model, and helped 3X Thumbtack's growth within three years. 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 this time advising marketplace teams and founders, teaching a re-forge 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. In our conversation, we go many layers deep on the many key elements 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 market is different from the U.S. 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. Ben, thank you so much for being here.

Welcome to the podcast. Thank you so much. It's so good to be here. Thanks for having me. It's absolutely my pleasure. Okay, so you are one of the most knowledgeable and experienced product leaders in the world on building and scaling a marketplace company. And so I want to spend the bulk of our time talking about 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 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. How does that sound to you?

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. And for folks that aren't super familiar with what is a marketplace business, they hear this term marketplace company. What's the simplest way to understand what makes a company a marketplace company in a marketplace business? 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. So that's pretty simple sort of explanation. I think in practice, it's always a little bit more nuanced on the fringes, right? You have all those interesting dimensions, like how involved is the intermediary, defines how managed the marketplace is. So something like Crixist 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. So I think that's how I see it. But there's all those sort of like fascinating, you know, variations of marketplaces, 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.

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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 us p-a-r-g-on.com. You've mentioned managed marketplaces and just how that becomes something marketplace to start to think about more. get back to that because that's a really important point. But just to even clarify this point, a key part of a marketplace is that the company doesn't own the supply, right? That's, in a sense, 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

of the other. But that's where you get into like, you know, sort of great. waters. But yeah, like the marketplace implies this concept of too independent and, you know, 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 trends towards or thinks about is just like we're going to control the supply. We're going to manage it. We're going to maybe own it in the future. But let's come back to that. So you work with a ton of marketplaces. You've built a bunch of marketplaces. What do you find is the biggest struggle to building a successful marketplace business,

the most common problem people run into? I think there's two types of challenges, I guess. There's, 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. 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? And here my advice is generally always, if you don't have park market fit, and if you don't have a good enough growth strategy for

at least one side of your marketplace, just forget about all this marketplace stuff, focus on this core exchange of value, 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. And you see, you see, companies like Airbnb and Themtack doing this with Craigslist pretty early on to jump out their growth is 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 you're saying that pre-product market fit before you find that anyone really wants what you're

building, focus on figuring out a way to grow. one side of the marketplace. So maybe just two quick follow-up questions. How do you know which site to focus on initially? 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. and the harder side there was demand. There is supply. You can look for, you can open the yellow pages. You can find plumbers somewhere. But the hardest question was, can we go out there and can we find people who want to do something in their house?

We have projects that need to be done. What is the core growth strategy for us to acquire these people to find them? And what kind of retention can we create? Can we create a delightful experience for them, you know, to come back to our platform and want us to take care of their home for them? Pick the hardest side is sort of my advice. 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. but try to find a way to tap into existing channels that have one side of your marketplace already latent. And so again, you have countless businesses that have been built off of Craigsist. I think Thumbtack was partially one of them. And the idea was like, hey, like, we can find, you know, all those great pros on Thentak. When we have someone who wants a job, oh, you want your kitchen remodel, we can like, you

know, behind the scenes go and post that job on Crixist. And then we'll bring on, like, you know, all the contractors. who are like browsing, Craigs is looking for a job. We'll bring them to our platform. That's an example of how, you know, that way you worry around the core, you worry about the core value proposition of can we get people to come back to a platform?

Can we create this delightful exchange of value? Are people trusting us? Do we have the right checks in place to make sure that 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 fly well on the supply side? And how do I manage and how do I make sure I have enough plumbers for, you know, per market or something?

like that. When you say the find the heart side, how do you find that? Any advice you can give founders and teams? In general, I would say intuitively, like, the teams know, like, especially the teams are in the weeds. They know, they know, like, well, yeah, we can get, you know, 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, make you think about it to reflect, like, actually, yes, you're right. Like, this side is obvious. We know how to get it. We just don't have the right supply for it and we don't know where to find a supply. Boom, that's the site that you should be focused on. Then you find a way to add source your demand, subsidize it, find some other way, and focus on this site that you have no idea how to grow.

That's that you should have a reliable growth strategy for this site. 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 tap it, like Uber drivers, Airbnb homes, professionals, thumbtack. Is that your experience, too? Yes, I would say supply is the hardest side, maybe like 80 to 90 percent of the time. Yeah, I totally agree. I was trying to think of like counter examples, but I can think of one. I just know that there are. There's one I know, which is a rover 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. It was like a very easy value prop. And so that they had a wait list. They had just like so many people. Also, TaskRapid is the one I know about where they had, so many people wanting to be taskers, whatever they call them. I was going to mention desktop as well. I heard of that as well. Yeah. Okay. And then you talked about there's a core part to figure out how to grow that part, how to grow the hard part, generally the supply side. You shared a couple examples. Are there any more like clever things you recall that you might be able to share of just ways

people grew supply early on that could inspire people that are trying to figure this out right now? Yeah. I think there's a couple of, you know, like common like tactics. It's like pretty early on that I think companies like rely on. So we've talked about jump-stalling one side of the marketplace with, you know, like it may be with thumbtack and Lyft also leverage job boards. You have also a lot of companies like building like value added services like pretty early on as like a core way of retaining supply like pretty early on. Like let's build, you know, a really compelling basket of value for this supply.

And this is going to be like the thing like appeals everyone. So, you know, like OpenTable did this like really well with like all the restaurant services. Other things that have seen people use like really well early on or like, you know, converting your supply into demand or demand into like supply pretty early on. So we tried that. It actually didn't work at Lyft. But I know other marketplaces I've been like pretty successful with like, you know, with that. Just to make sure people understand that one. It's a really interesting one is in the Lyft example, it would be convincing drivers to become riders, convincing riders to be.

become drivers and mostly the latter, convincing riders to become drivers. Yeah, exactly. In our case, that lived early on, we were, you know, we had a wait list on the demand side because we just couldn't, you know, onboard enough supply. And so we had this idea of like having a pop-up instead of saying like, no drivers available, it would be like, hey, sorry, all the drivers are taken. Do you want like, people are making 50 bucks an hour right now? Do you want to like hop on your car and drive?

And we had like some conversions, but it felt a little distracting to the overall experience and wasn't like a huge driver of supply. but I know that for Uber it actually was. I think they had like a non, like a relatively 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 lift sort of passenger and driver is sort of a more, you know,

likely to like flip back and forth between the two. I don't know. I don't know. Some cam at Uber out did you guys. Oh, no. Yes, on a couple of other things. And we have to do them on a few other things. Okay, okay, that's right.

So essentially what we've been spending some time on here is just when you're starting a marketplace, figure out which side you need to drive because 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. And all of this is, as you're coming back to kind of the main question I ask, we've gone on this awesome tangent is pre-product market fit before you even know this is a thing, spend time, most of the time building supply to see if demand, customers actually

want this thing, right? 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. we talked about instead of doing what we just talked about. For companies that have some sort of scale and product market fit, to me, the place where I see people are getting tripped up most often is the concept of marketless liquidity or how to manage the health of a marketplace.

To me, liquidity is how marketplaces win, right? It's this measure of your ability to match buyers and sellers efficiently, right? 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, right? So for, let's take the example of Lyft or Uber, because we talked about them, you know, it might be for all the people who open the app with the intention to book a ride, how many of those actually turn into a ride. And this metric, LiquidG, it's a direct multiplier on the efficiency of your marketplace. It's literally at the center of your vision. It's what you exist as a marketplace is 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 turns into a transaction. And the more likely it is that they come back. And so it's really this incredible circle. And what I see is people sort of missing hack-referral. 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, like, how do I manage this? Okay, it's important, but like, what do I do about it, basically? Is there a metric you recommend people specifically look at to understand liquidity? 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 maybe I'm looking for, you know, like something on there. Maybe 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. But it can be influenced by a whole bunch of different factors, right? So if you think about, you know, for for Thumbtack, it can be influenced by if there's a snowstorm out there. if the competition is like bidding, there's a whole bunch of, you know, 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 like a market health metric. And this is basically, think of your proxy that is the best predictor of your liquidity. So I'll use the example of Lyft. You know, you have your liquidity is, you know, your demand utilization.

It's, you know, how many app opens turn into a ride. And, and 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 we had, if the closest driver was at least three minutes away from you or closer, then we had hit a ceiling. You were more than X percent likely to convert and book a ride.

If it's more than two minutes, if it's five, then maybe you check at Uber, maybe you walk, maybe you take the bus. If it's two minutes, it doesn't make a big enough difference. you're just going to book the right anyway. So find this sort of like threshold, find this sort of predictor that tends to plateau that correlates strongly with retention, but with also like sort of the transaction happening.

And that's the metric that you can predict. That's a 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 a hundred supplies into the platform. I want to know what, you know, if it's actually reducing ETAs in this case. I can look at correlations like this

and, you know, sort of limiting some of the effect of those exhaustions factors that I mentioned. Awesome. So essentially, 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 is, we looked at people that are searching with dates as intentful 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 what you want to move. 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. You have enough good supply. And so in the case

of Lyft is, do you have enough cars? Do you have enough homes? Do you have enough plumbers on thumbtack? And that's usually where you can actually impact fill rate. Sweet. 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 you're in and all the categories you're in. Exactly. Yeah, completely. Awesome. You mentioned this idea of product market fit and the things change. Pre-product market fit, post-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 might have product market fit or you definitely have product market fit in a marketplace? 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. And so this will have a massive impact on the dynamics of your marketplace. And so to me, my answer would tend to be

you know, like pretty classical. It would be like, you know, measure your product market fit the way you would for a normal company. So like, you know, I like the, it's a bit of an art more than the 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, you know, 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.

And you can do this on the supply side and the demand side. I think here more advice, my advice is typically like 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. I love that. We actually just had Sean Ellis on the podcast talking about that exact survey, the Sean Ellis test of asking people, how disappointed would you be if they left if the product didn't exist. And I just love that you keep coming back to this point that I 100% agree with that most of the challenges you have with a marketplace business are like 90% are the same challenges you'll have with a non-marketplace business. And people overfocus on, oh, I need to think of this like a marketplace and all the marketplace signs behind. all this stuff. And really it's all the same stuff every founder's dealing with product market fit except you have two sides of it, growth strategy, but you have two sides of it. So I love that

you keep coming back to that. Something that I definitely want to touch on is when people are thinking about starting a marketplace company, what are signals that a marketplace is a good model for the idea? Because I think a lot of people come into it would be like, I want to build a marketplace, oh, I'm going to connect these two sides, it's going to be great. There's no, there's no marketplace in this business in this vertical. What are signs that marketplace 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, right? It's not something that people say. I think the signs that come to mind or one high fragmentation, I think you want this long tail

of buyers and sellers without a handful of big players controlling the market, because this is where you can provide value by doing this job of aggregation. I think you also want a relatively uniform set of needs. That means that your supply can be commoditized to some extent. This is what's so tricky, by the way, about services, service marketplaces like Thamtack, because unlike eBay, where sellers, you know, they just want to sell very clear and distinct inventory. On Thumbtack, you have electricians who only want certain types of jobs, but they only wanted if they're available that day. And they might take a job and cancel it because something better comes up. And so this makes for a very fuzzy definition of supply. And you have various, like, you know, different set of needs.

Like, one electrician wants something, the other one has a very different perception of the same unit of demand, right? 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 the form set of needs. And the last one I'd mention is a high enough barrier 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. The higher it is, 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. Awesome. I'd love to know if there's any examples you can think of of bad marketplace ideas that people have tried. 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. That there's a lot of fragmentation on both sides. There's not just like a small number of 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 a marketplace to match with a number.

airline. Then two is there's uniform needs. The needs are basically consistent. Like, I just want to stay in a home. I want a car to take me somewhere. I want a plumber. And then there's a barrier. There's complexity to the matchmaking and helping someone book the thing, work with them. Like, finding a car, I imagine, is like, I'm not going to just flack down a car. Right? There's challenge there. I'm not going to just go and ask them, can I stay in your home? There's challenges there. Awesome. Are there any examples of companies you've seen that are just like that will never work as a marketplace or here's like 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 so like a tangentially related example of a marketplace that I don't want to throw anyone in the bus. I respect the company and the effort, but sidecar at the time was another redsharing company competing with Lyft and Uber. And there's, I'm sure, a whole bunch of lessons there. They ended up sort of 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. You could decide, like, I want a card that's, you know, at least like 20, 15 or newer. I 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, 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 it hurt their, you know, their SLA is like quite drastically. If you think about the ETA, when you're asking 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, you know, we had a great driver, but they have a Honda Civic from 2018 and it's, you know, not the special that you wanted. So I think, you know, people who build marketplaces tend to want to give a lot of control to the users because this is what users want or this. This is what comes up oftentimes in user feedback.

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 into 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. 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 to give users more options than they will need to be successful and happy. And like, I think sidecar did that because they were trying to like differentiate from Lyft and Uber. Like, what can we do differently? And they're like, oh, let's give people all these options. I think they even let drivers choose the price that they're offering the ride at, which made it extra complicated.

They're like, oh, my God, all these cars at different prices. But I, you know, I respect their attempt because they were just the third wheel no fun intended. 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 try if possible to like open up your supply walls. Like your user is telling you like X, but try to give them like 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 the Thumbtike. it's the smoke machine example. So a thumbtike 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. And one of the checkboxes was a smoke machine.

And it turns out a lot of people are checking this. You're like, yeah, hell yeah, I want a smoke machine in my wedding. And unknowingly to them, obviously, like only five. of our DJs had a smoke machine. And so you would carve out like 95% of our supply. And if 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 automatically going to like remove half of the supply.

And so, you know, work on ways to like 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, you know, tweak the experience. but 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. I love that example. The other thing that I think is important to talk about briefly is when you're thinking about building a marketplace, a lot of times they fail because the business model just doesn't work.

I think about a company like Cherry that tried to do Uber for car washes. 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, do that to the like a car wash person shows up and washes your car. I think cleaning is another example. There's also just like the going. Exactly is another one that comes to mind. Oh, exact.

Yeah. Where it's just like someone who comes does stuff for you. Something. Yeah. 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?

And I think it's important to say most marketplace ideas fail, just like most startup ideas fail. The most ideas period fail, I think. 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 struggle is with outside of a marketplace. So let me just ask is maybe specifically within marketplaces or even broadly. What are the biggest reasons that marketplaces fail? I think three things come to mind. One is this concept of liquid. that we've talked about, right? So you need to kick off this flywheel. You need to build enough of that sort of density within your marketplace. And depending on a business, you can take a lot of

time or money. And without the right to diagnostic framework, you can end up running out of both. And so it's like, that's the same 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. Otherwise, like, we know it's kind of a losing battle until we 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, you know, marketplaces only thinking about their demand site funnel. So they run ads, they get clicks, they turn those clicks into

And they try to get enough supplies 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 half of our users. We forgot that sellers are people too. And they're all leaving. And now we need to completely transform our product to save the ship and to create a compelling

by the proposition on their side. So that's the other thing that I see is businesses realizing that they are marketplaces with like true marketplace needs like too late in the game. 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, you know, don't have necessarily that intentionality. And you have this constant push of, you know, supply. If only we lower our bar a little bit, we could get like more supply, right? And so until you end up, 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 shady 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 feel. This episode is brought to you by Vanta. When it comes to ensuring your company has top-notch security practices, things get complicated fast.

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Get $1,000 off Vanta when you go to vanta.com slash plenty. That's VANTA.com slash Lenny. Kind of as a segue from that idea of quality, I want to talk about managed marketplaces, managed supply. So I think the reason quality is so, such an issue for marketplaces is because you do not own the supply

and control the supply, you're a marketplace, you're not just selling something. Quality is innately going to be a challenge. Airbnb doesn't own homes. Uber doesn't control. Employed drivers. They can't even legally tell them exactly what to do

because they're contractors. So quality is always this ongoing challenge with marketplaces. So there's always this push towards making it more of a managed marketplace. We give people a lot more instruction. Maybe they sort of own. own some of the supply, maybe they invest a lot in training, all that kind of stuff. And like in a

perfect world, not an idealized world, quality will be best if you own it. 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? Any advice on when it makes sense to move towards that spectrum and how far to go? I think when you're running a marketplace, you tend to sit in your ivory tower a little bit looking at stats and thinking, I'm like, if only we could get people to do X, it'd be better for everyone, right? I certainly, you know, 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 at, I'll mention another thing like example, but like we'd originally sell leads to pros

like plumbers and electricians. And of those leads, obviously only a fraction would turn into actual jobs and revenue for those pros. So we also saw that those pros were always great at converting leads into jobs. And so naturally, we thought that we could provide a more consistent experience for customers and for pros by improving their ROI and selling bookings, right, directly to those pros. It's a common sort of marketplace move going from, you know, some version of lead to a direct booking.

And did it look great. We knew we're going to improve their ROI by something like 20%, maybe. And we launched this and pros hated it. They hated because they actually subconsciously, 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 the customer. They were like, you took all those phone calls. They kept me busy.

I felt like I was like hustling. I was like about to close this customer. And so no matter what the data says, it's like, oh, we increase their earnings by 20%. Like the pros don't feel this way 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 to, like, fight a lot of that perception and a lot of that peak end effect. So my call out here is any attempt at control can be really tricky and backfire in ways that are unpredictable. You also touched on sort of employment classification right in the U.S.

When we're talking 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 there can be legally classified. as employees and be entitled to a whole bunch of benefits. So my take on this in general is I'm a huge believer, and it really depends on the type of company, I should say, obviously. But my take is I'm a huge believer in market forces and empowerment. So provide guard rails 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 and hands-on tactics, you know, just to close those gaps more specifically. So lots of like coaching tools that Lyft Uber did it like 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, you know, meet that bar? And for people who like fall in.

for the gaps that you have, then that's when you invest in like sort of more hands-on, you know, sort of tools. And there's a great, 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.

I'd love to hear about that. Before we hear that, is there any marketplace that has been very good at up-leveling quality without becoming managed that did this really well that you can think of? Yeah. There's a,

marketplace called TopTal. And they are specialized in this. They have a really high bar for quality. They claim to only have like sort of the top 1% top 3% I believe of talent out there. And they have really amazing sort of like set of checks and processes. There's this sort of funny story from them.

But apparently they advertise something like maybe like a 3% you know, sort of a pass rate for their talent. So they only like on board like three percent of the people who apply. And allegedly their actual pass rate is even lower than that. But they thought that if they actually advertised the actual number, it would sound fake. And so they actually like, they actually say three percent because like one percent would sound like too ridiculous and it would discredit sort of like their town. So there are one company that does a tremendous amount of work for, 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, you know, education and things like that. That's a really good example. And so basically they just vet and only approve high quality supply in their case. It's mostly engineers, right? I think on TopTel. Correct. Yes. It's most engineers, 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. But that's a really cool example. Basically, it's just like only allowed. really high quality supply. Let's hear this rental car story. So this is Lyft trying to do rental cars, right? Correct. Yes. Yes. So this is a little bit of context. I was leading the driver's 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. GM had all those vehicles that were coming off of lease and that they were forced to sell at auctions. They didn't really know what to do with. And from our perspective, we had this massive supply gap. We've talked about this before, but we had 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 U.S. 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? 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, you know, offer to pay for the car if they drove 30 hours a week and completely transform 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. So 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 like

the fourth largest rental fleet in the US. But all this sort of stemmed from like this gap that we saw. I'm like, okay, it's not about like controlling like the drivers in general. It's about like, 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 we thought the vehicles of quality was too low, we knew we could onboard more rental vehicles that were like more recent to like raise

the average sort of like age of a vehicle on platform. So it gave us more control, you know, by, you know, in a much more surgical way, I guess. 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 could become drivers. It was a bit of both. We actually launched like it was we had vehicles that drivers could rent from Lyft and to drive on the platform and also to drive for their personal needs essentially. But yeah. 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 U.S. because it was, you know, it was so effective for us, both because we had the right amount of control, but also those drivers were incredibly loyal to us. We had a whole bunch of other incentives that we could do. We could offer to pay for the car, but only if you don't drive for the competition for Uber, for Uber. And only if you drive at least like 30 hours a week. So this again, like provided us with, you know, again, like much greater retention, much

higher, like engagement. And was a real incentive for us, but also for the drivers. Awesome. And maybe the reason that's most interesting is this is along the spectrum of a managed marketplace. It moves closer to like you guys sort of like are paying and covering costs of cars. It makes it less just like this simple, highly efficient marketplace. Exactly.

It's the marketplace version of, you know, maybe like your black car fleet owner has like their fleet of equal and they have like people. So this was like the marketplace version of doing that. And it's also just a differentiator because GM and you guys were close. And so you had this lever that other, let's say, that Uber didn't have. Amazing. Another area that I know you spent time on that I think is really interesting and I think it'd be helpful to people here is the mentorship program and kind of the ambassador program that you have that lift. 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 Uber was basically like 30x size. They had 30 times more revenue, more people, more liquidity, like everything can think of, right? 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 like super clever. everything that you did at the company had to be 10 times more efficient, like per person than the competition just to survive. Like that was that was the bar, just not to die.

And put a lot of pressure on us, but we basically found kind of a clever way of onboarding driver, drivers 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 back on 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, like, you are the person of the driver's license and all those things. 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. And we did this as well in our first sort of like three to four brackets. But you can imagine the overhead, right, in the lead time. You had to go and you had to find office space, sign the lease, hire employees. You had like huge, huge lead time. And we thought about it. 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? As a driver, you had lower earnings guaranteed.

As a passenger, you had 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 high it makes you feel. And so we had, you know, the pink mastact. 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. And so what we did is leveraging this community and building essentially a self-onboarding supply engine where we would pay our best drivers $35 per mentor session. And mentor session was essentially replacing this onboarding flow. So it was basically another driver looking at your vehicle, the check all your documents. take photos of your driver's license and all that stuff and take you on the short right along.

And the benefits of this were absolutely mind-blowing and, you know, kind of unexpected for us on all sides. First, the mentors were our very best drivers and they were evangelists 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. And this created so tremendous leverage and social proof for those new drivers who were on the fence about taking the trenches into the car. It's actually quite funny because we're the brightest minds in the company, like writing the best marketing emails and copy, like, hey, like drive on the, you know,

hop on the car and drive this Saturday. And you had all those drivers, all those mentors. Like, don't listen to those lift guys. Like, here's what you should do. Go, you know, on Tuesday at 2pm, text me. I'll tell you where the good spot is. And this is like how you're going to get right. This is how you're going to get rich and make a lot of money, right? And this recondition lever was just so much more powerful than anything we could be telling you, right? And so very, very sort of like efficient activation lever for the new drivers. For us also very, you know, like incredibly scalable, right? We could fly a small team to rigorously vet and onboard maybe like 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.

And even for those mentors, for those like 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 a job, right? And so he actually had a huge impact on the retention of our very best drivers, which was kind of unexpected. So a lot of like really, really interesting benefits. And we actually lean into this and build like a couple of really fascinating variations of this, you know, for a while. But this allowed us to match most of Uber's footprint

with like, you know, a 10th or a 20th of the resources at, you know, at incredible speed, I guess. 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. So what I'm hearing is it was cheaper. The drivers were making money. I imagine the drivers trained by the mentors ended up being better drivers. That's what we said, Airbnb host that came in through a referral ended up being better hosts for whatever reason. And you're saying basically this is what allowed you to compete with Uber at a much smaller scale and much less money raised. Amazing. You said there's like couple variations. Is there anything interesting there to share just

like things that you built as a follow up based on the success? So like the next step in that journey was basically we were growing like crazy, but now we had, we had cracked of 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 floor. 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, a hall moment, like could we get, you know, some of our best drivers to do that for us and empower them to like, you know, to be a part of this. And so we did this and we launched like another like sort of role with we call them recruiters. And so as a recruiter, as a driver, you could just like, if this was quiet, you know, on the road, you could just like hop on your phone and you would have like a mini sales dashboard where you could like claim leads. And this was like a driver who had dropped off in the funnel. And you had like a tool you phone number.

You could like just call them and text them. And same thing. Those guys were outperforming our very best like train sales people because it's not like, hey, it's Ben from Lyft. like hop on the road please. It's like, hey, my name is like, you know, James and I'm a fellow driver as well. Like, Lyft told me that you have a complete application. Like, do any questions? Do you want to come to your house where you can do this together?

And I knew 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. demand. The problem with the marketplace like Lyft is that you have like this big spikes, right? 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. And so how can you manufacture demand, you know, like during those low utilization times? Like this was a great way to do that. Now you could like wait on the road and like still make money, you know, while just sitting in your car while waiting for the next ride. So this was another sort of iteration of this model that was like really cool.

Amazing. That is so cool. I just I just know like the few. of having, being on a team, like, coming up with this idea and being 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. 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. It was like a beta test. I was friends with someone that worked the Lyft early on. And it was just like, man, lifts the best. I was like, 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. Lift is worth $5 billion. I'm curious if you have thoughts and just like it feels like Uber has won at this point. And I don't know where Lyft goes. I know your heart is with Lyft and you work the lift for a long time. I know it's not, it doesn't feel great to see how things have played out necessarily. I'm curious just to hear your take on just. 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. Yeah. But just where do you think things go? Yeah. I think it all went south when I left the company. I'm just kidding.

No, I, and again, I have to, I have to call it the fact that I haven't been closed, like, sort of Lyft and their business and strategy for many years at this point. So I think this is the grain of soul. 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 like transportation, people transportation. The founders were deeply passionate about like moving people. They were passionate about transforming the way people, you know, move around in a city.

They wanted to just change, like, how cities are designed, how roads are designed. And so that meant, you know, investing in, like, dynamic, you know, like 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, goods and 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 being a like a logistics platform for like assets in the world, right, for transporting people, for transporting things, for transporting like. And I think they built, they invested a lot in, like, you know, trucks and, you know, food delivery and, like, all those, like, really exotic things that Lyft had never any intention to invest in, not even because of the lack of resources, but because this was, like, in part, like, a distraction from our vision.

We wanted to change, like, how people, like, move around in cities. We want to reinvent, like, public transportation, but we did not want to, you know, be a door-dash confederate and help you get the donuts during COVID. And a huge part of it also was, you know, leaning heavily in like shared rides. And so like this was like, you know, again, 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. 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 able to, like, rebound much more quickly because of how diversified 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 like to launch this. And so, yeah, the new CEO, I think killed the shared rides, which I'm really sad about. But yeah, so I think it indicates like a very different division now, a very different, like, direction for the business.

and yeah, that's my take, I guess. Interesting. So essentially COVID really F them because their strategy was always about transportation. And when nobody needs a ride and actually people want food, 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. 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 made it. And losing me. And losing Ben. I'm looking at the, so you left in 2019, March 2019. And is that one in the way in public? Yeah.

Yeah. And it's like all downhill from then. And then during COVID actually when there was a big bomb, which I think when people started writing again and then it went down again. So I think there is a correlation there. So there are you. That's the thing. Don't ever fire Ben. Don't let Ben leave.

That's her takeaway. I was not fired, yeah, just to be clear. 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. 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. 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. And I want to spend a little time here. Usually we don't spend time on this sort of stuff, but you're working on something. something very cool, I think is going to be really helpful to a lot of people in a really meaningful way. So I want to spend a little time there. So, but before that, so you, you're living in France now. Before you started your company, you were interviewing for CPR roles in France. You work with a lot of French companies, European companies. I'm curious what you've noticed might be

different in the cultures of tech companies in France and Europe in general versus the US. It's been really fascinating. I think so my entire career has been. been in the US and I'm just trying to understand, so I'm like what the European and the French market in particular is what looks like. And my read so far is that product management has really exploded, I think in Europe in recent years, but the market dynamics are still quite different.

In the US, I think you have this inherently very liquid and dynamic market. I think this is my interpretation of it, but I think it leads to greater ownership and accountability, for people and product at all levels. So, you know, product managers and leaders, they join a startup. And, you know, you're immediately in charge of a relatively meaningful piece of the business with genuine autonomy oftentimes, right? It doesn't always happen.

But, you know, oftentimes, I think that's the case. And if things don't work out, well, you know, there's this expectation that you'll be managed out. This is just there are countless memes on LinkedIn about the tenure of CPO's at, you know, tech companies to illustrate that. I think in France that the market is just 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. And they're also less business owners than they can be in the US. And I see like sort of founders and managers struggling to let go of control a little bit more, again, because you know, it's understandable in a way. You don't have like as much sort of a control as you do in the US. And so it is still a lot of like really fascinating

effects. You have startups who tend to wait a little bit longer before hiring, especially in product. The art of product is a little bit less of a thing. You have a lot of amazing PMs in France. But the recognition of the craft is, you know, is a little bit different 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 Muzza to build end-to-end products from the ground up, right? So something that's been sort of really, really interesting. Another side that I see is, you know, this sort of 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 or business schools, like as you 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, CS degree, Stanford dropout, you know, that you have instead of Silicon Valley. And I think because of a few of those things that I just mentioned, less liquid, you know, job market, but also like less liquid financial markets. The last thing that I've observed, that's kind of interesting is, you know, that's also around ownership, I guess, is like equity is much less meaningful in

friends. So of the product leaders that I talk to, you know, most of them consider their equity to be virtually worthless. None of them know of anyone who's made a down payment in a house thanks to their sort of equity. So it seems 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, you know, a startup. For exact roles, I think it's often like sub 10% of their total compensation. Whereas, you know, 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 really interesting to just see, like, how vibrant the SOAR culture is here in France.

You have, like, a truly exciting innovation happening, especially in AI. You have a lot of, like, French companies at the forefront of this, like, Mistrel AI and Heggingface and things like that. And also how it's been exciting to see how the government is leaning into that as kind of a catalyst for this, innovation. 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 like top talents to do that. I've met so the people working on this. It's just really fascinating. It makes me super excited about, you know, what a federal startup task with would be inventing the

DMB would look like. So it's been really excited. to like see the whole space and how it differs from the US. Fascinating. Do you? So I know there's also like AI regulation that feels really strange in Europe, but it's EU based, right? Not like France specifically. Yeah.

Yeah, that people are like not excited about. There's just like a lot of fear of AI. And so there's a lot of regulation talk in Europe. I know. I'm a big Android guy. And I, a lot of the features like Jim and I, all this like is only available in the US. And now that I'm in France, I see the difference a little bit.

Interesting. So the cultural differences you spoke of, do you think they're rooted in the fact that people don't move jobs often? Or is it like culture? People just don't learn to work in the way that people learn to work in the U.S. in the product role. Like, what do you think is the root of why things are so different? 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 I, this is like, you know, one of my sort of core principles. So I'm sure I also have a new tunnel vision on this a little bit. But to me, like one of the biggest difference that I see is really around like this concept of ownership and accountability. Whereas in the U.S., and again, I saw it. I'm actually said it.

Maybe you see a lot of companies, not everywhere, but a lot of companies will, you know, hire you, give you a big chunk of the business. And it's up to you to like, you know, prove yourself out, right? Like you have six months. You have a year. Like, you know, it's up to you to. like show impact. I think that the French employment model is less conducive to like this type of dynamic because employment is like much more rigid. So you have much less of this like,

you know, higher now and like prove yourself out. It's much more of like prove yourself like beforehand. And and if you've made a better higher than as a founder like you become perhaps like a little cagey about like your vision, you want to like be more hands on because you made about higher. It's not like someone perfect and like you'll kind of make your work. But it means like you'll be more hands-on in like the work of PMs daily and perhaps we'll think like oh maybe I don't need product managers who won't like on my vision or higher project managers or something like that right so it's perhaps like slightly more conducive like those those types of dynamics and you're saying that's in part because it's harder to fire people in France and in Europe yeah I think so

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 yeah exactly yeah Got it. And it sounds like there's also just like a cultural difference of like founders innately are much more I am in control. And I'm not going to hire people and trust you to take this thing on. 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, like very business centric sort of culture. You have. And again, it makes sense, right? Like the markets, you have less venture capital. you have less, you know, less liquidity in the financial markets as well.

And so when you raise funding, you need to have like a strong business. It's 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 stereotypical, but it's a very like tech or product-centric view of the world. Or it can be, 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 will like, we'll follow, right? 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 able to like even exist right so it means like it attracts a lot of like business minded you know, entrepreneurs much more so perhaps than like tech minded or product minded entrepreneurs. Got it. If someone wants to help their company in Europe and France operate more closely to the way companies in the US operate, do you any advice for that? them. I know you met when you talk and work with a lot of companies in Europe. What do you help them change and see differently? Yeah, it's a great question. I haven't not fully cracked that and I think it's a really hard question. I'll give you like some sort of small pointers that

have helped at least some of the companies that I talk to. But the one is equity. I think there is like a desire from a lot of the founders that I talk to to like to give equity to employees. But because it's not in the culture yet, like I think employees also have like an under appreciation for equity. Like, well, yeah, it's nice, but like, I don't know what's going to happen. Like, I just work for the CEO anyways. There's less of like this sense of, again, like ownership that you can have, you know, like the in the US. And so I think like leaning into that and investing in like, you know, education around equity, it's the case also in the US. I'm convinced like, you know, 80% of people just don't feel interested in like their equity. But I think like

leaning into that, especially in Europe to like help understand how people understand like the value of their equity, help them by, you know, telling more about like the story of the business, you know, the trajectory of the business, why it matters for their future equity. I think anything along those lines, I think, can, you know, help cultivate this like greater ownership mindset, I think, for people. And then, yeah, and then I think another, like, big piece, again, is at least to me, this is a big recipe to successful product teams is to, like, develop teams that, revolve around like this concept of ownership and accountability teams that are like clearly owning a

huge you know or it doesn't have to be huge like a slice of the business like not feature teams like you know shipping maybe desks but teams that uh have clear accountability with clear consequences but also like clear ownership and leeway to do their best and to and to thrive again i usually don't spend time on the 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 and so i just want to spend a few minutes giving you a chance to talk about what you were going to know. You started a company. Is this your first company the year you've started?

It is, yeah. First build company. Then like set projects, but first. 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, how people know how to find it if it's right for them. 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 have 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 brain 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. I think going to truly zero is like,

felt at least to me like super overwhelming and lonely, but also super exciting, right? With tons of condensed learnings, it's been like a really interesting journey. So what brought me there is my wife So I'd 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 like how much of a nightmare it was to manage, you know, like her care and to navigate the healthcare system in the US. So we'd wait, you know, three months for an appointment for a neurologist. Then they'd see her for maybe eight minutes. The average appointment time in the US is between like 10 and 12 minutes. They dump a bunch of

jargon, see like, hey, test it'll look normal. Like, sorry, like, you should just go see this other specialist instead. We'd wait another three 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 that neurologist do this test? Like, I can help you. Like, this makes 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 kept getting conflicting advice. doctors. And I was spending all my time researching specialists, what solutions to consider. You know, I spent all my nights reading through like research papers to like, and it's like, hey, what is the academic consensus on this particular treatment that the doctors don't seem to know about, right? And yeah, throughout this whole process, it felt like no one, you know,

really had her back. No one within the medical system was, was fighting for her, the way that your family doctor, you know, might have fought for you 20 years ago, knowing everything about you and be like, Lenny, like, you know, let's talk about this. I know your uncle had this, right? Like, there's this sort of like a sense of advocacy that came from your family doctor that just doesn't exist today, right? It's not uncommon for doctors to have thousands of patients that they see like just a few minutes each year.

And so digging into this, we just realized like we're, you know, it's not an isolated case. You have nearly half of Americans have at least like one chronic condition or have to deal with like some sort of like, you know, complex health issue largely on their own. You see a lot of like those, you know, large online communities. revolving around like chronic conditions or chronic pain and trying to make sense of it and advocate for themselves. And 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, you know, burning out. And you see that pressure just, you know, only increasing, I think. So I basically spent the next six months just talking to hundreds of patients and doctors and experts. And what we built is basically a platform to help people fight for the health. And so we want to close the gap between like 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, right? So we connect people with complex conditions, typically, with their own health advocate. So it's essentially like their own health assistant. They're available 24-7 to help you navigate your care. So we find appointments for you. We help you prepare your appointment. We make sense of a diagnosis of test results. We spend hours like researching solutions and potential treatments.

And just more generally, we do everything we can to help you better advocate for themselves, basically. And yeah, well, just... In the US, early version of this a few weeks ago, and the engagement has been like really, you know, really, really mind-blowing so far. I know, we're helping cancer patients, people with a lot of those sort of like niche chronic conditions and literally harassing the doctor's office, like, hey, like, we still haven't received that referral, like all the things that you just get tired of doing when you're dealing with, like, so many appointments and when you're having to manage a condition like this.

And our mental model is, what would we do if this user was, you know, our partner or our parent, you'd likely like spend all night how to make the research you'd call like all the providers in the state, you'd be like, hey, who has an appointment? Because there's no PT available for the next two months, like we'll find your PT available sooner, right? 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. Super cool. It's sad that we need something like this, but we do because the healthcare system is so not ideal. And so it's basically someone in your corner that's like in the inside that knows how

these things work that is there to help you through the process. What's the, what's the company called? Where do people find it? Yeah, it's called Nura Health. And the website is Nura N-U-R-R-A.m-E. Awesome. And we'll like to tune 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 allude back to what we've been talking about, it's not a marketplace. How would you describe this business in relation to marketplace companies? We're ignoring the marketplace dynamics. I'm following my own advice. I'm Jim, starting one side of the marketplace. The health advocates were, you know, like,

jump-starring 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. Like, how do we find those people? How do we create the right value proposition for them? So that's what we're focused on. So. And so in the future, there may be a marketplace component here is what I'm hearing. Yeah, exactly. Interesting. Very cool. Ben, is there anything else that you want to share, mention leave listeners with before we get or very exciting lightning round. No, no, thank you. Well, with that, we've reached our very exciting lightning round.

Ben, are you ready? I'm ready. All right. First question. 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 interesting in behavioral economics.

I love this intersection between economics and human psychology. Like, it's a great analogy for products. 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. I've always felt curious about 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 see all those PNs who are like machine learning gurus, leading conferences on weekends that are contributing to AI think thanks. I just feel like a journalist, you know. So if you feel this way, This is a good book to make you feel a little bit better by yourself in your Postal Syndrome, at least it did for me.

And last one, nothing to do with business, but Immune by Philip Detmer. This is the creator of the YouTube channel Kurskazaks. I don't know if I'm pronouncing this right, but it's the science sort of channel. It's if you're even remotely curious about how your body works, how your immune system works, it's an amazing book that's really fun to read, super entertaining and yeah, just great sort of biology and fun book, I promise. 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.

Yes. Okay. David Epstein, please connect me. 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 or 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 journalist. Yes. I completely agree. That's been me too. Next question. Do you have a favorite recent movie? your TV show. You've really enjoyed. TV show. I haven't seen anything, really, that's been

mind-blowing, but I'll share an old new one. I've re-watched The Last of Us recently, and I just, it's an old favorite. I just, I love the TV show. I like the game, I played the game many years ago, and love the TV show. When the heck's the next season coming? I'm excited for that. I know, because I know the game has more.

2025? Yeah. Oh, man. Yeah. It's so long. Okay. You get 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 such a lesson in onboarding. They do such an amazing job. So like that alone is a great thing to do as a product person. Just see how they do onboarding. I was like, I've been using Chrome for like, 12 years or I don't know how many years like 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 two more questions do you have favorite life motto that you often come back to repeat yourself share friends or family I don't have anything like particularly philosophical unfortunately I lived in dahou for years I live now in the french alps so I have a frame with john mirro's quote the mounds are calling and I must go I feel like this is uh it's my sort of grounding place like the mountains are my happy place. And so I don't share that work often. I don't like piece out in the middle of meetings like the mountains are calling on this

go. But it's been sort of like a grounding, you know, sort of a mode, I guess. That's beautiful. That just my nervous system relaxes, just hearing that quote. And I know you live in a mountaine part of France, so you've done it. You've listened to the call. Final question. You live in France.

The Olympics were 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? Great question. I did not see any live events, unfortunately. I perhaps like the highlight for me was I'm a big manned biker. But in like the biking realm, I love the men BMX event where like all three men on the podium were French.

So this was like kind of a great. moment for friends. I didn't even know that was an Olympic sports. It's a BMX like Malm, like dirt bite kind of race. Yeah, yeah. So cool. 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? And I can listeners be useful to you. Yeah. You can find me two things that are perhaps helpful for people out there. One is I have a report course. If you're curious about marketplace. If you want to dig deeper into market plus 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, I'll check this out. And on that real quick, is the customer ideal? Is it founders or is it like PMs at larger marketplace companies? Who is this perfect for? It's, 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, you know, wait a little bit before enrolling in this course, focus on your core business, before worrying about the market-post dynamics aspect. And then I get you off. If there's something else, you're going to point people to? Oh, and just, uh, Nura, the company that we're building,

uh, anyone that you know or if you yourself have, of chronic or complex conditions. And if you feel like you need help, managing your health and navigating your care, you know, I would love to help or hear how, you know, what you need and how we can help you. And our website is nura.m-n-U-R-R-A-A-M-E. And then how can listeners be useful to you? If you have advice, if you know anyone in the space, if you're interested in, like, learning more about this, if you have, like, advice, if you have learnings, if you know anything

about this, I would love to hear it. If you have, like, hot takes you about marketplace, if you disagree with any of whatever. said. I love to also hear it. I love it. Ben, thank you so much for being here. Thank you so much for having me. It's been a dream come true, finally. Oh, wow. Same. Same for me, Ben. Bye, everyone. 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 lenniespodcast.com. See you in the next episode.