Colin Gardiner, who scaled Outdoorsy, says marketplace founders must hit a 10%+ take rate with $100+ average order value, and build organic traffic to 60-80% of demand. Many investors don't understand marketplace economics, so founders need to translate unit-level data into a clear narrative.
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What were some of your key learnings from Outdoorsy that you've taken with you to now advising and investing in marketplaces?
Oh, I don't even know where to start. There's so many. You know, I think a lot of what I learned, not just at Outdoorsy, but through, you know, scaling like a few marketplaces and was really on the, like the fundraising side and like what it means to storytell and how to articulate how marketplaces work. Because I think one of the biggest problems that I see is that investors, like ironically, there's not as many sophisticated investors around marketplaces as you might think. And so when you as a founder of a marketplace that one is very specific to a vertical, but two, you like have all these dynamics that are just a bit different between each of them. It's actually kind of hard to go and like tell your story and articulate your numbers in a way that like makes sense to them. I'm sure probably everyone in this crowd has had some investor that's like, hey, what's your ARR? And you're like, oh, you're funny. I don't have recurring revenue. I only have, you know, GMV, you know. And so I think that's one of the things I learned a lot was like how to articulate meaningfully marketplaces and to investors. And so that's something I've been helping. Like, honestly, the thing I like, it's not my expertise. Like my expertise is in product and growth. But I think I find myself spending more time helping people and founders like articulate how their marketplace works and the numbers that they need and the metrics behind it than I do actually helping them with the specific mechanics. So that would be the number one thing I'd say is like, you gotta like how to articulate how marketplaces work to investors is really important. And that's something I learned a lot about and we can go more into that. The other thing I would say, you know, it's really specific to like B2C marketplaces is that, you know, at scale for B2C marketplaces to work, they need to be predominantly driven by like organic direct and referral traffic, like upwards of 60 to 80%, right? Like to make the CAC work, you really need a lot of organic traffic or like reason, like retentive stickiness, like video or livestream, like to keep people around so you can drive tack down. And I think that's one of the things I see a lot of like B2C marketplaces falter on is one, the take rate is really low potentially or too low and that they're not doing enough traffic from like organic direct referral sources and they're doing too much paid. And that's fine, like in the early stages if you can get fundraising to do that. But for in the world where you can't, Like you really need to focus very early on getting these flywheels in the business that are organic, right? They just have to be true because if you're sitting at like a 10% take rate and like an AOV of anything under $100, it's gonna be really hard to scale like in any paid channel and even up to $1,000 like AOV, really hard. So What do I tell people like pretty early on is like, try to get your take rate up as soon as possible because that's how you're gonna fund your business. And 2, like really come up with like and focus on how you're gonna grow your business organically. And that can be, when I say organically, it doesn't have to be like organic search. It can be like referral, word of mouth, like so organic social, like whatever that flywheel is, you need to get it set up early because it's gonna be, it's much more painful to set it up later.
