Insights From Launching Facebook Marketplace With Deb Liu | EM Group Chat #184

Welcome back to Everything Marketplaces, where we talk with founders and leaders from some of today's top marketplaces. So this is episode 184, which is a really great group chat that we had with Deb Liu. Deb was recently the CEO of Ancestry, and before that was at Facebook for over 11 years, where she led the launch of Facebook Marketplace. Prior to Facebook, Deb was also at PayPal and eBay, so she has some really incredible marketplace experience. So this is a great chat with Deb where we went back to her early experience at eBay and some of her key learnings. Deb shared about her experience at Facebook and walked us through how they ideated and launched Facebook Marketplace, what some of the biggest challenges were as Marketplace gained adoption. We discussed lots of topics like vertical versus horizontal marketplaces, focusing on transactions versus GMV, marketplace frequency and retention, how AI is impacting marketplaces. Deb shared lots of tips for early-stage founders, and we also had a great group Q&A. I really enjoyed this conversation, and you're going to find it a great watch to the end. So, Deb, as I mentioned to you right before we started recording, you've been one of the most requested group chat guests since your past group chat, which is of course Off the Record. So, you know, this is a real treat to have you join us here today. I want to start off by saying a huge thanks for taking the time to do so in advance. We have a lot that we're going to dive into with all of your incredible marketplace experience, but I thought it'd be great if we could start off by briefly sharing your background for those here that might not know you.

I started my career at PayPal and a week later we were acquired by eBay. So I worked at PayPal leading the eBay PayPal integration on the buyer side for many years and eventually leading that relationship from a product perspective. Eventually, went to eBay where I led the buyer experience. And so for a couple of years, I was actually the head of buyer experience and just loved— I was also a power seller. So I had a business on eBay itself as well, which I took wholesale eventually. Went over to Facebook and worked on a number of different things. Ads is not often seen as a marketplace, but it's a very— I'm happy to talk about that experience building an ads product and liquidity around that. And then my passion was to build Facebook Marketplace and Instagram Shopping. And so spent a long time lobbying for that. Eventually in 2016, started working on that and now has over a billion people using it. So it's been pretty exciting as a journey. I love marketplaces. I've invested in some, I advise some. So, you know, it's just a passion of mine right now. I advise a couple of marketplaces as well, kind of niche. But I just love the— I love marketplaces because it's taking 2 things and actually bringing magic to it and then really sitting in the middle and seeing it happen. And so big fan and I just love seeing all the ideas you guys have. So I've been going into the group now that I have a little bit more time. I recently stepped down as the CEO of Ancestry after 4 years, not a marketplace job. And I hope to get into marketplaces back someday. So we'd love to talk to you. So let's get started.

Yeah, I know that's a really incredible background. So thanks for sharing with us on that. And lots of topics, of course, that we're going to get into. I guess, you know, going back to eBay, I'm sure there were lots of learnings there, but you know, what were some of your key learnings from your time at eBay?

Yeah, well, I think the most important thing is people think eBay is one marketplace, but it's actually many sub-marketplaces. And you probably have heard this. So as you do the work, you're thinking, oh, eBay just, you know, dominates. But actually it is many, many, it's like 30 or 40 kind of real categories where there's complete liquidity within those categories. But then there's some categories where just there isn't enough demand and supply. And what was really fascinating was that people treated it as one marketplace, but the ones who were really good at their niche really won that category. I advise one startup, it's a friend of mine, he sells baseball cards. He's the highest volume baseball card seller. And really incredible, you know, what he does. But, you know, his customers are there for him. And yes, occasionally they'll buy some other things. But I think it's really interesting. People have really made a name for themselves at eBay. I think one of the big challenges though is that what does it mean to be able to get people to shop in a second category? And that was one of the insights was there was something we called category of first purchase. And then there's kind of can you get them to purchase in other categories? Can you get them to see beyond, you know, and I think that's a very important thing to really understand is like the dynamics is you start one place and if you stay there, you're actually worth a lot less than if you get buyers to really look at the, the completeness of what you're doing. I think the other thing that's really important is that eBay just brought a lot of casual people to sell and buy, but marketplaces are anchored by really big businesses now. And so you have to understand that small Small businesses are not good at serving customers. And so you have to understand, I think a lot of people want to serve, you know, SMBs, which is great, or small businesses. But I also think that from a reliability perspective, you end up having, you know, if you're successful, you're going to have anchor tenants in each of these categories. And that's a very important part of your strategy as well. Can you bring the anchor tenant? Can you get them to stay? And I think that that's also, you know, and then the last thing I would say is I wrote an essay and I send it out to people, Lessons from Building eBay. which I've shared with Mike, which is all of the things that we did wrong, written by former executives and senior leaders at eBay. And we wrote it together as a way to really understand, unpack what went wrong in the years that we were there as well, which I'm happy to share. But I think the biggest thing was, you know, feedback is not a gift for buyers, and it was actually driving people from the site. And so it seems like it was community commerce, but community commerce only goes one way when the buyer has paid, paid for the purchase. And so there were just a lot of really interesting lessons as you build out what kinds of frauds and scams, how to prevent things like that. You know, what does it really mean to, to build out liquidity category by category?

Yeah, you mentioned lots of great points there. I did want to kind of highlight one that you mentioned as far as, you know, it's like kind of power sellers. So, you know, if we kind of think about like today in this point in time, I know eBay kind of proved that out, right? So how do you, you know, maybe advise founders to think about, you know, focusing on the kind of individuals versus maybe the kind of professional segment of supply?

Well, you know, I think it's Airbnb's running into this problem, right? And also this opportunity, which is Airbnb was kind of people renting out a room, which was great except for the part where at some point people, corporations started acquiring a bunch of inventory and listing it on and now you're losing the community feel. So how do you distinguish that, right? Do you want to stay with a family or do you want to just get in a place? And people's motivations are very, very different. And so I stayed in a place where they just, it was completely done through text. You know, I was locked out of the place and I had to call somebody. There was like a call center. I was very confused, but it was ultimately a great stay. It just, you know, but it was very soulless. I ended up meeting the person who was renting it out and he's like, oh, I have this company that rents out my other room and rents it out on Airbnb. And it turned out I knew him. So the point is, it was a small world and we worked together at Meta. The point is, I think that sometimes, you know, you have to find the right balance because what customers are looking for and what you're offering as your brand is changing, Airbnb used to be stay in someone's home. It's a more intimate experience. And now it's, you know, maybe it's a corporation who has just acquired a room and is renting it out for, you know, $200 a night when there's no hotels and stuff. That's a very different model. And it's also a very different experience. And I think being able to serve people and meet them where they are and meet their expectations where they are as well.

Certainly. And transitioning over to, you know, to Facebook, can you walk us through the original ideation process for Marketplace? you know, what it was like launching it, given the sense of scale that Facebook was at. And also too, you know, what some of the initial learnings were from the launch of Facebook Marketplace.

Yeah. So I think first, Sheryl jokes that the first time I met her when I was interviewing at Facebook in 2009, I pitched her Facebook Marketplace and she's like, we're hiring for a totally different job. What is she thinking? And so I pitched it from then until 2016 when we launched it every year, every hackathon, because I really believe in community commerce. I, as a mom, was buying and selling things locally quite a bit, actually. And so So, you know, and I remember the chief product officer, Chris Cox, saying to me, like, why would anyone want to buy anything on Facebook? And I'm like, what do you mean? I buy tons of stuff on Facebook. And I realized that, you know, sometimes you see something other people don't see, a niche and a need. And so really trusting that instinct. And so over those years, I really, you know, invested in building the idea that we should have a marketplace because there were tens of thousands. In fact, there were like over 100 million people were using these kind of groups to buy and sell on a regular basis already. And so, you know, one of the things was how do you aggregate that? The biggest issue was liquidity aggregation. So these mini marketplaces had too few buyers and too few sellers. And the issue is without liquidity, as you know, that's one of the biggest challenges. And so one of the things we had to do was drive liquidity into a central marketplace. And so we had this thing we, we call cross-listing where for months before we launch a marketplace in a city or in a state, we would say, would you like to also cross-list this? We tested like opt-in, opt-out, and people wanted to cross-list. I mean, they didn't want to cross-list like a $5 item, have some stranger come to the house, but they cross-listed like furniture because they want, you know, max, they need to get it out of their house. They cross-listed cars because cars, liquidity is very, very important in high-ticket items. They cross-listed things like rentals because again, liquidity, you know, and so one of the things that we realized was high-ticket items where you needed the, you would, it was like trust for small items and liquidity for big items. And so we thought, well, maybe we can do the best of both worlds. It ended up that Marketplace was so successful that the groups actually became harder and harder to sustain because we lost liquidity in a lot of the groups. And so, you know, Groups Commerce still exists and, and they are still successful. But, you know, in terms of how strong that is relative to the full Marketplace, the full Marketplace has taken over. Ironically, by the way, my son likes to tell me he's in college. He just went to Boston College and he said the only reason young people use Facebook is a lot of them use Marketplace. And so I said, well, in some ways it's really great to see that the next generation is still into thrifting. And for me, one of the things that was really important and I talked to the company a lot about was, you know, we are creating value in the world by basically having less stuff in landfills. We are actually like getting people to recycle and reuse. And I actually think that's a, you know, we have saved so much, you know, reuse and buying new things for the world. And I'm really proud of that.

Yeah, that's a really cool story. So that's cool to hear. And definitely, I self-admittedly a power user of Facebook Marketplace myself, definitely as a, you know, as a buyer and seller. So, so, and it was cool to hear some of the initial strategies, you know, for, for building liquidity as far as like with cross-listings, you know, and such. But I guess like as it, you know, gained adoption, like what were some of the challenges, you know, a little bit kind of later, you know, post-launch for Marketplace?

Well, I think the biggest challenge we had was there was tons of fraud. There was not actually a lot of fraud in Groups Commerce. And even when we launched locally, but there was a lot of people defrauding, you know, when when we launched. And so we had to really get that under control. And every fraud, you know, and any marketplace when you have anonymous people, you know, and one of the things we had was you had to have an account and we had some checks like you had to have the account for 30 days or you had to visit, you know, we had all these rules. But still people are going to age accounts and then they're going to try and defraud people because once there's a place to do that, they will try. And so a lot of it was like, how do we validate? How do we give people trust signals? How do we have feedback? And so it's very important that, you know, friends of friends, like things like that. So community was a very important part of it, but you can't prevent everything, right? The minute you allow people to exchange money for goods, people will defraud each other. And so it's really important that you have those checks in place.

Certainly. As far as, you know, when it comes to trust and safety, that's something that we're, we're always talking about here in the community. So do you, do you maybe have any kind of tips, you know, from, from your, from your time at Facebook Marketplace as far as when it comes to, you know, how founders can kind of think about building trust and safety from, from the early stages?

Yeah. You know, one thing that we, we did was we tried to do like account verification. And actually, like, you know, we realized that even with account verification, people can fake verification too. And so it gives you a false sense of security. So actually, the thing that was the most valuable, if you're actually buying something on Marketplace, is the tip. Look and see how long the person had an account. That is one of the big— how many friends they have and how long they've had the account are 2 of the biggest signals for actually trust. And so for your marketplace, what is that? Right? You know, do you do a running reserve? So, you know, early on Stripe and I think Braintree allowed anyone on their site to buy, to basically collect payments, but they had a large running reserve until you actually validate yourself until they could see the cash flow. So what is that for you? Figuring out and nailing that so that you can protect your customers and refund them, whether it's escrowing or anything like that. I think that bilateral trust is so incredibly important. And the other part is not externalizing risk to your customers. I know it's very easy to say, I don't want to lose money, but you know what happens when you lose money? You will fix it. When other people lose money, you don't. And one of the biggest challenges eBay had was that early on when there was fraud, they would, you know, people would just lose money, but then they would leave the site. And so one of the things that eBay did eventually was they said, you know, we're going to stand behind these transactions from these sellers. And then they had to figure out how to do that. And eventually they figured it out, but it was costing them money. So they put a team on it. And I think, you know, if it, if something hurts you, you're gonna invest in that. And so really think about who, whether you're externalizing risk or not.

That, that's a really good point there. So I like how, I like how you mentioned that. So, so I guess, you know, I'm, I'm sure there were lots of learnings from Facebook Marketplace, but if you were to kind of summarize, you know, what are some of your key learnings from, from Marketplace?

I think the biggest thing is having the right level of buyers and sellers is so important, right? You're laddering up, like, Look, you know, Facebook Marketplace, one of the things that's great about it is that there's tons of traffic, but do you have the right traffic? Are people over-contacting? Are they under-contacting? Is it too frictionless? And so you really want, you know, sellers just want to sell the thing. They don't want to talk to people. They, you know, they, they have a mission and buyers are like very, if you have too many casual buyers, you're actually ruining the experience for them. They're like, I just need to get rid of this couch. I don't want to talk to 10 people. Right. And so one of the things that's important is how do you get that signal as quickly as possible with you know, the right amount of friction. I think the other part is really having, you know, if you have too many things for sale and nobody looking at it, you're really, once you lose liquidity on one side or the other, you're really going to struggle. And so often marketplaces have no problem with supply. They have a problem with buyer demand. And so really taking care of buyers. What Amazon did really, really well is they took extremely good care of the buyers. They're like, we'll just refund you. We will punish the seller. Like they, they were very much buyer-centric, whereas eBay was, I think, too seller-centric early on.

And now they've really So, so many good learnings in here. So this is going to be really helpful. And to kind of transition into, you know, today, so you mentioned that you're, you know, advising and investing in earlier stage marketplaces, you know, so what do you look for in marketplaces maybe when you're, when you're working with them today?

I think the most important thing is do they have liquidity? Like, do they really have true liquidity? And when I talk about liquidity, it's like, and, and by the way, you know, one of the marketplaces that I advise, one of the most important things that we do is I said when they put too much stuff out there, it actually lowers the value. Like, they actually get fewer sales because I think it's overwhelming. And so one of the things that's important is really understanding, nailing what is the right level of liquidity. And it doesn't have to be a lot. It just has to be enough. And so, you know, what are, what is your DAU to MAU? Because marketplaces, it lives and dies by how many buyers are coming and whether you're putting the right things in front of them. Liquidity is the way that you measure whether people are coming, And whether people are looking and looking to buy and whether you have the inventory. And so really, I look for those metrics. It's like, are people coming back on a frequent basis? What is your cohort? What is your 30-day, 90-day retention on, you know, MAU? And what's your MAU to DAU, DAU to MAU ratio? Those are all really, really critical. You can almost always get supply because supply is highly concentrated and will go where the buyers are. The question is, can you get sufficient buyers to satisfy the sellers that you have to make it worthwhile?

Also to a related topic on that, that I, that I had, and I know you've mentioned this in the past, like I believe in one of your past talks, which is, you know, focusing on transactions kind of versus GMV. So could you maybe share a little bit more on that?

Yeah, I remember there was a story of Flipkart where in India they were valuing GMV over transactions. And so one of the things you have though is that you then wanted to sell high-priced items, you know, but eBay, eBay was, was focused on GMV and ASP. So those are the 2 metrics, but Amazon was really focused on transactions. And this is the Coca-Cola, like Coca-Cola, I think early on they did a strategy many, many years ago, maybe in the '90s, that said you have 64 ounces of drinks that you drink every day. We want a place in every category. So they're like, you drink orange juice. So I think they brought Tropicana. They, they're like, you drink, you know, X drinks. So they bought Snapple. I think like they bought all these different things. Like they had a water brand because they want to be part of your 64 ounces. Well, a transaction-based model like Amazon is like, how many items do you buy? And what is our transactional share of that? When you— they want you to buy soap, they want you to buy toilet paper because they're like, everybody needs soap and toilet paper, and they want you to buy books and, you know, all those other things. And so they look at your transactional share and say, what share of your life are we powering that transaction for? And I think that's a really powerful way of looking at it because it forces you to say, okay, what are the things in this category? So we want to be your one-stop shop for X. You know, so what is that transactional share? Are you spending it all here?

So I guess on that too, to kind of expand, you mentioned as far as like categories, right? So how do you maybe advise kind of founders to think about, you know, categories and maybe even like initially kind of when it comes to category selection and then, you know, when to, when to potentially expand?

Yeah. Well, first, I mean, people forget that Amazon was purely a bookseller, then books and CDs, you know, and I think you can expand when you feel like you've really gotten traction where you are. You know, you really have to nail the first use case before you go for further TAM because I think sometimes people lose focus on that. But if you look and see what happens is it's, it's kind of, I think it was Marc Andreessen who said there's like 2 ways to make money, bundling and unbundling. You know, when you bundle, you're like Amazon or eBay, you have everything, one-stop shop, right? The perfect store, all of those things. And then when you actually unbundle, you have things like Reverb, You know, I worked on the musical instrument category when I was a category intern in 2000 at eBay. And we, and I built the used musical instrument category and they lost it to Reverb, right? Like, again, because someone was even more focused on what people care about. And so I think you have to really nail your one use case really well first before you earn the right to go outside of that category. Because if you don't have a killer use case, then you don't have an anchor tenant to your mall before you That's a good point.

And it kind of goes back to your, your initial point earlier that you mentioned as far as eBay, like a common misconception of being like one marketplace where it's really kind of, you know, multiple marketplaces kind of bundled up.

Yeah.

Well, cool. So another topic that I wanted to talk about, otherwise you and I could just kind of get in the weeds on a few, is AI. And of course, that's something that we're always talking about today. So, you know, do you see any opportunities for marketplaces to kind of leverage AI today?

Yeah. Well, I think the most important use case, by the way, is ranking. Marketplaces, you only get 1 or 2 people come. If they see there's something they want, they stay. And so if your ranking in search is not good, they will just leave. And so that's incredibly important. And AI, I think, can help that. But by the way, customers, I think we are okay in tech. We're like really in love with AI, right? We're like, we slap AI on everything, AI powered. When you actually look at the customer research, customers are actually very suspicious of AI. And I see this happen a lot where people say, oh yeah, it's powered by AI. Like, I see criticism of companies, like somebody will say like, you know, somebody will say something like the search results on Ancestry aren't as good since they used AI. I'm like, they're actually the same. We don't use AI for that. So, but people will say that because they're suspicious of AI because they're like, I guess they thought people used to hand-tune things. I'm not 100% sure. But the point is, you know, when we, I think sometimes if you actually look, people are less likely to buy a product if it says AI. You notice that Apple uses Apple intelligence, not AI. Because they talk about the use cases, the solutions, not the technology used to solve the problem. And so I think sometimes we use AI because that's the hot thing and you can raise money on it and this is where all the VCs are. But customers are not those people. They are, you know, a lot of the people at eBay were middle America. They were at the time when I was there, they were on dial-up. You know, it's like 10% of our users were on dial-up and I was like, this is insane. And so One of the things I think that was really important is really thinking about, you know, what does that mean for you to— it's fancy and exciting to put in a deck, but what does it mean for your customers? What is the problem you're solving? I actually think ranking and search are 2 areas where companies, especially smaller companies, have a really hard time. And so if you can get that right, you know, you can use AI. I think that's super powerful. I think the other thing is, and I'm— this is gonna change over the next few years, is, you know, SEO is gonna change so much. Because AI can just churn out SEO. But in the meantime, be the person who can win that game, you know, while there's still a game to be played. I think over time though, I think this degradation and the move towards AI might make that worse. But if you can really get quality SEO done for much less, I think that for your category, that could also be really powerful. Publish things that other people don't have, stats, information, that stuff gets really picked up very well and it's much more authentic and it's not being kind of eroded with these kind of generic articles Lots of good opportunities to leverage AI.

So as you mentioned, we're, we're still early, so it'll be, it'll be cool to see, kind of see it play out. So I guess, you know, somewhat related to, to that topic on, do you have like a request for, for marketplaces?

Well, first, I've been thinking about this. If I build a company, I just like, there's just like all these things that I think marketplaces could solve, but it's very hard. And so one area, like, for example, I have a tonal, right? And it's like a super expensive machine that I got And I've invited many, many friends to work out on it because I'm like, you can have infinite. But I'm like, actually, I should rent this thing out because I've spent so much money on it. But it's great. But I only use it like, what, half an hour a day, right? I could just put it— I'm like, but there's like, you have all of these things. So, and the other thing is I bought— so I was hosting an event for Andrew Yang. So I bought all these chairs from Costco, which are very nice because I just needed to host it. And I was like, well, should I rent chairs or not? So I ended up buying the chairs because it's cheaper. And now I have like 40 chairs, which I just like give, like, whenever someone needs to borrow it. But like, there are so many things that we have in our lives that like could be used by someone else that are just sitting there. I wish there were a marketplace to borrow things because I don't need 40 chairs in my garage. Okay? I really don't. I could loan that out very easily. The other thing, like, there's a marketplace idea around, and I was looking for this because my son is in college and then he's going to come home for the summer. But where am I going to put all his stuff? And so he can't ship it home and now he has all this stuff. So my friend is like, oh, you know, just drive it to my house. And I was thinking there should be storage or something for college students that live by a college, right? People just sell all their stuff. Like apparently people who leave the company just sell all their stuff and come back and get it. And I was like, that is— so there's like all these opportunities for marketplaces. A lot of it's hyperlocal, which is very expensive to get started. I think that's the biggest issue. And I think if someone can really nail that, really bring all this hidden inventory out in the open, that could be so powerful. The other thing is, you know, I, I, so as you know, I have tons of ideas about these. It's just like we have an extra couple bedrooms. Like I would just like to like rent it, not even rent it out, like let people stay there. But I'm like, how do I vet who's staying there? Like, I don't, you know, like my husband's like, well, we can just like when people come visit, you know, the area and they have friends of friends. But like, how am I going to even figure out how to do that? I don't care about the money. It's just that it's just sitting there. And so I think that people, there's a lot of assets in the world that are locked up. And so how it's kind of like fracking America was not a big creator of energy until the energy prices were so expensive that fracking had to happen. And now we're the biggest producer of, you know, oil. And it's because the supply and demand got to the point where it was worth it to go figure out how to crack all the shale to like figure out how to get to the, to the oil.

Well, we're all here as founders to, you know, figure out how to crack the next marketplaces. So awesome. We're going to get into the group Q&A here in a, in a little bit. But, but I guess right before we do, did you have any, maybe a few tips that, that you like to share with the early stage marketplace founders?

You know, I think the thing that I would, I would do is figure out exactly how you're gonna get your liquidity, like really nail that, talk to customers, what is gonna make them come to you? What do you bring? And really getting the, the special sauce, right? Because if you talk about any marketplace, there's like a, a killer use case that you just have to use them for. And so like, as I said, like Airbnb, what was really interesting was that You know, for me, I travel with Airbnb. There's a lot of frustrations with some of the, the things, but like, you know, I travel with kids and like laundry, super important. And then the other thing is I travel with my sister's family and like actually having a place to hang out. In a hotel, you can't do that, right? So that was a super important use case. And until my kids are older, I cannot not use Airbnb. And so they had this amazing killer use case, right? You know, the thing about Uber is cabs were really hard to use. And so now they just like a car just shows up at your door and it's amazing. It's the same price as a cab. And so there's like, do you have a killer use case? And by the way, at least in this area, I heard that something like a third of the trips on Uber and Lyft are just like to the airport, right? Like that, it's like you're not leaving your car there. So I think that there's just like these, could you nail one thing and nail it super well and make sure that that use case is the one that's like the killer app so that you have an anchor to it.

Awesome.

It's gonna be great tips. Hey, Olivia, I saw you use the raise hand. Do you wanna come on?

Yeah, for sure.

Thanks, Mike.

And thanks so much, Deb, for jumping on and, you know, sharing your learnings with us. This has been an awesome group chat. So I had a question, you know, you were talking a little bit about product in the beginning of the conversation. So I was wondering how your take on how founders can effectively use feedback loops to drive continuous improvement and innovation in the marketplace. And then if you can share any examples of where you've seen this done well. Yeah, so I'll show you 2 examples of it done well. One done well, one done poorly. Okay. So at eBay, we had something we called Voices. And the, there were these sellers that would email and anyone could subscribe to these Voices. So it was managed by a team. There was like somebody who managed kind of, it's like user feedback. And what ended up happening was people would email like, hey, this thing is broken. So that was great. But often it was a lot of sellers that would complain. The problem with Voices was it was very seller dominated and the buyers never complained because they were just buying Right? And so what was happening is it actually skewed the roadmap very seller-centric at a time when they should have been more buyer-centric. And eventually they corrected that. Separately though, one of the big challenges for us at Facebook Marketplace was how do we actually— people buy and sell on a frequent basis. So they were both buyers and sellers. So we created a group and people would talk about the issues they had. And so it was actually, we were able to surface a lot of the issues much quicker, but people were both buyers and sellers. I think One of the things is who are you listening to? And so eBay has gotten much, much better at balancing those things. But early on, I think there was a period where it was so seller-centric that, you know, it was really hurting the buyer experience. And so really getting a way to get rapid feedback, but also understanding that you're not hearing all sides. And so knowing how to balance that is important.

That's a great question. Appreciate it. Hey, Molly, do you want to come on?

I've seen a lot of your writing on balancing kind of work life and just wondering if there's any founders that you can point to that really do that well, specifically in their early phases? Like, is the grind really necessary, or have you seen it be done in a bit of a different way? Well, first, I feel like founders, it's like, you know, when you found something, it's like your baby. And often babies at the very early stages need a lot of 24/7 caring and feeding, and everything is just decision is up to you. I think that often, look, there is going to be a time when you do that. It's kind of like, you know, So you're going to need a period, but the question is you can't do that for like, you know, 10 or 20 years. And so really learning how to delegate, learning how to actually figure out how to get support and help is really important. I think founders feel like they are— this is the whole like key person risk, the key man risk, right? It's like, that's actually a recipe for failure because you will never scale. And so I've, you know, taught some of the founders I've advised, and like one of the things you need to do is who is your second? Who can make decisions in your place? Who can you rely on to get things done? And I've seen that the founders that learn how to scale learn to scale their company and themselves at the same time. But if you're controlling everything and you feel like you have to work all the time, then like you literally on a treadmill and the minute you stop running, the whole thing falls apart. And that's a very dangerous place to be. So really finding that moment when you say, okay, it's 6 months, these are the things I'm not going to be doing that I need someone else to do. In a year, this is what I hope to be out of the— the great thing about kids is they don't— they eventually sleep through the night, they eventually get out of diapers, they eventually eat on their own, and then they cook. This is great. So like, but what is that timeline for you? And for some people, like, oh, it's just next 30 years. Like, that doesn't seem reasonable. And so finding those points for yourself and then picking Awesome.

Hey, Deb, I actually wanna ask a question for a founder that couldn't join, but they added it to the Google Doc in advance. It's Ajith, and he was asking as far as curating and maintaining the quality of supplies. So they're building a marketplace for home chefs. And so that's something that they're thinking about as a team kind of as they, you know, start to scale. So do you have any tips when it comes to that and doing so in an efficient manner?

Yeah. You know, what's interesting is, you know, selection over quality is really how do you think about that, right? But early on, Quality is one of the most important, one of the most important things because a bad experience will turn your buyers away. And so you want every experience to be a great experience and you want those people to turn into evangelists. And so like I would have less supply and more quality if possible, if you had to choose early on, because once one person's like, hey, I bought this thing and it was not what I expected, or I got this Home Chef and it was not good. They're turned off from the entire platform, not just that one chef, right? They don't, you know, they don't blame that. You know, it's like early on you, you were like, oh, Uber is terrible if you had one bad ride. But now you've had like 1,000 rides, like one bad driver is just a bad driver. So I think you, your reputation is dependent on that. And so especially early on, really cultivating and curating that experience. And this is why Amazon did a really great job. They're just like, look, we're just gonna refund everything if you lose, even though we lose a ton of money. Because at the end of the day, that's the most important thing is a great buyer experience because we want them to keep coming back and evangelizing us.

That's gonna be really helpful. And then another related question that was actually added is on frequency. And do you have any maybe tips for founders on how to increase that frequency?

I think one of the things that's important is like, are you nudging people in that direction, right? Because I think sometimes like a lot of sites feel very transactional. And so how do you actually get it so that it feels like, hey, this is something I need to do every week. What is the right cadence? Right? And, you know, one of the things that, for example, a lot of shoe companies run into this. You buy one pair of shoes and then you're like, you're done. Like, I have a pair of Rothy's and they're great. And then I bought a pair for my daughter and then I'm like, okay, I'm great. And I've had it for like 4 years now. And so I'm like, oh, there's a hole. Should I get another one? And I'm like, okay. So I've bought like 3 pairs of shoes for them and they're great shoes. Don't get me wrong. But I've spent like $300 and they probably spent like $200 to acquire me. Right? So like, And so I think, well, what, you know, they're amazing shoes, but then what? And so then you have to have like, you know, other lines and other things. And so you have to give people a reason to come back. One of the things that we did for Facebook Marketplace was actually our metric was not transactions or GMV. It was actually weekly active users, how many people are actually coming back to look. And the reason is because you don't buy a couch that often, right? Like, and we weren't sure how often people, but if you're coming back to browse, we call that potential energy. And so we were looking at, and because it's a browse marketplace, so there's like search marketplaces and browse marketplaces. Browse marketplaces are, you just put stuff in front of people. And because it's Facebook, people just came and browsed because it was right there. And so one of the things that was really important in the browse marketplace was just how frequently they came. And so we, our metric was wow over meow. That was it. And so we did not expand until wow over meow was sticky enough that we felt like people were browsing enough that if we put the right thing in front of them, they're going to buy And so we worked super hard on that first. We did not focus on transactions. We figured at some point you're gonna need a car, but if you're looking, we're gonna show you the car on that day, right? Because you're gonna search at that moment. And so it was a very different metric. I think depending on, you know, is it a dynamic marketplace? Is it like, you know, a search marketplace? Like really thinking about where you sit in that category. There's just a bunch of like, you know, you're not gonna go to say Reverb unless you're gonna go buy, you need an instrument, right? You just don't go browse unless there's like a group of people that might browse, but like there's other marketplaces places like that sell collectibles where people would just buy an infinite number of collectibles. And so then it's really like engagement that's really important.

Cool. Hey, Dimitri, do you want to come on? So you raise your hand.

Thanks, Mike. My question is about why we see so few kind of procurement or in search of marketplaces. So by that, I mean, there's a lot of platforms like eBay where anyone can list an item for sale, but there aren't very many where a buyer can list an item that they're willing to purchase, maybe along with a price that they're willing to pay.

Yeah.

And so eBay will like let you save a search and get an alert if there's something new. But as far as I know, they don't really expose that demand information to potential sellers.

So eBay shipped Wanted Now many years ago, and I think they also shipped a second version years after. So I was there for the Wanted Now where people would list a wanting item. The challenge was that people had no incentive to keep it fresh. And it was very hard to— it is very hard to keep that dynamic. And I think that's been the biggest issue is that you have to get critical mass for that. And then you have to make it so that it's good enough for a seller to be able to say, I have that. But it is very, very hard to do that well. And so you see kind of these mini marketplaces, like I'm in the Stanford housing group, you know, so Because I had rented out a room at one point in my, my, for my in-laws. And so, you know, it's like a lot of people searching for apartments over the summer, basically, because people come to Stanford to do whatever they're doing. And so, you know, so I had rented out a couple of places there, but it is very hard to get liquidity on that and then to maintain that. And so often you just see that fail because people just aren't incented to like maintain the listings and then to keep it fresh. Thank you.

Awesome. That was a great question. So another question that was actually added to the doc was around the future of kind of social and commerce. And, you know, this is kind of mentioned as far as, you know, it seems to be that we're headed more towards like a direction of kind of discovery and connected commerce and consumer. So, you know, is that something that you kind of see? And, you know, how do you think the future of social and commerce will kind of play out?

Yeah. Well, I think that one of the things that, you know, in a world where now there's so much AI, I actually think authenticity is going to be more in the future. Like now, you know, and this, I love Etsy. Like I buy a lot of things on Etsy and my kids love the stuff I buy from them. I think one of the biggest challenges I have is that now there's like a whole bunch of stuff on there that seems like it's made by AI and I worry that it's like low quality, right? And it's a really hard problem to solve. Like I don't, I think that that's one of the biggest challenges, but I wanna like shop from like a real artist, right? Who actually made the good. And now I can't tell if someone stole it or not. I'm, I'm like so much more suspicious now, you know, because I can't tell if someone ripped that off or they built it themselves. So there's this like poster I really wanted for my back wall and now I'm like paralyzed. So I might have just, I actually emailed the artist and I was like, can I just hire you to do one, a custom one for me? Because I want to know that you did it. And it's not made by AI. And so she's like an actual watercolor artist, so I can actually get something. But authenticity is going to be super important in a world where you can't tell who's behind, you know, they say like no one knows if you're a dog on the internet. Well, now you don't know if you're an AI on the internet. And I just worry that that's going to erode so much trust. And when it erodes trust, then like authenticity. So then, you know, how do you find authenticity? How do you find, like, how do you find experts? Right. And so I think we're just, it's like before everything was getting commoditized and now I think it's going to move towards expertise and that, which is great. But, you know, So faking that expertise is also much easier too. And so I think the world is changing really fast. And I think part of it's like, are you a place where people trust? Are you a place where there is authenticity? Because fake accounts are out there now. It's easier to like create bots and things like that. And so I do think that that is why a marketplace is going to be important because authenticity and having some place where you're like, they vetted this as opposed to I've been to many artists' websites that I find on Instagram and I'm like, can I really buy this? Like, is it real? You know, and then on Etsy, at least you get to see reviews and things like that. And so I think that each marketplace really plays a role in that.

That's a great point. So it can be, you know, super helpful as far as the, the role that trust and safety plays for, for marketplaces. So another kind of a last, last question that I wanted to ask here, that's a kind of a fun one. But, you know, are there any big misconceptions that you see right now with, with marketplaces?

One of the things that I, I talked to some investors in marketplaces and it's like, it's kind of fallen out of fashion, line in the VC world. You know, everybody is like, oh yeah, marketplaces and fintech are so yesterday. And I'm like, people don't need money and they don't need to buy things anymore. Like, that's crazy, right? And so I said, look, this is, I, I just, you know, and, and I think that you see that in the valuations. People have gone public. You've seen that in, in investing. But there's so much magic in a marketplace that I think duration and durability is going to, to outlive this era. But it's going to be hard, you know, it's going to be hard for a period of time. And I think that that's very frustrating, you know, and so it doesn't mean that you can't build something really special. It just means it's going to be harder and the expectations around building the liquidity is going to be higher for a period of time.

Yeah, no, definitely. Well, that's a great way to kind of wrap up the, the group chat here. So we really appreciate, you know, taking the time to join us here today. So I know we tried to pack it in, you know, with all of your learnings and, you know, also kind of bouncing around with some of the topics and then the questions. But we really appreciate it. This is a real treat for us all here today. And then I actually had one last question for you before we wrap things up. And that's my usual kind of closing question, which is that if you could go right back to before you entered the world of marketplaces, what would you tell yourself about them specifically?

You know, I wish I knew just how magical they really were because eBay just existed for so long and I interned there and I was just like, but now just seeing where it's gone in the last 20 years, Because I interned there, as I said, in 2000, which is 25 years ago. But I think one of the things that's really magical about it is that there's just such opportunity. And I probably, you know, there are so many different marketplaces that could be created, and I would have gotten faster into it.

Great way to wrap things up. And then, you know, last but not least, time for a quick plug. Where can we keep up with you at?

So I have a Substack newsletter, devlu@substack, and then I'm also in your group. So if anyone I think I have group messaging or chat messaging on so people can also, uh, I'm on everything marketplaces, so you can find me there too.

Uh, that, that's a, that's a great plug. So I appreciate that. Probably get lots of messages. Yeah, we once again really appreciate it. So this is, this is an awesome chat. Now, thanks everyone for the, for the questions.