Jack Greco argues for high-touch marketplace strategies over low-touch ones. He emphasizes in-person engagement, customer lifetime value, and building strong relationships with high-value users rather than chasing broad acquisition.
So I've been going through the Marketplace School and I had a question about low-touch versus high-touch marketplaces and what would be the different approach from a founder's perspective and from an investor's perspective to both?
So I'm primarily a high-touch guy. I think early on, you know, this is why you need grinders who are willing to go and work the hours and put the time in because I think the only way you can get away with low touch is if you are certain that you can build as strong of a relationship on it. Now, I don't want to confuse low and high touch with, I got lazy people and they don't want to do anything, right? When I think of high touch, I think of it as in-person involvement. I think of it as you look at your customer acquisition costs and you expect there to be Let's just say months of development around that, you know, and it's much less of a volume game. I think it's just always tricky to get, like, no matter how big the lifetime value of a customer is, you gotta get somebody to say yes, and then you gotta get 'em to keep saying yes, right? So I think of it very much as this like engagement period early on where you want to keep working with them. So like for me, I really stay away from low-touch, high-volume, low-LTV type situations because I just don't think that, I think that goes immediately and directly against all the things that make marketplaces great, which is building relationships, building a place where you don't, I don't need to have a relationship with you, Amanda. I just know because you're here, you're a good person, so I trust the relationship. I don't know if that answers your question or not. I guess I could have just said like, maybe that's one of the things I look for. Like, I want to know it's high touch. I want to know that there's personal relationships between the entity and the individuals. And I think you got to be very cognizant when you look at your lifetime value compared to like your acquisition or what I think of as your retention costs. I don't see customer retention costs enough when I talk to companies. Like, okay, what did it cost to get them to do it one time? It's entirely different than what's it cost to get them to be a raving fan, you know, or at least build this into their process. And so I think that there's different segments of investment for you to go from, I don't know who in the hell you are, to signing on and trying this once, from trying it once to building it into your workflow, to building in your workflow to the point where they become a champion. And I, and so I think high touch is just how deep into How deep down that path you end up going, which they end up becoming the core, that whole 80/20, was it Pareto principle? I'm constantly just trying to just get more of the 20s and just like let the 80s die, which I think, I don't know, I'm not great at it with these, but I don't know if that answers your question or not, but. It does.
And it, it really ties into what you said at the beginning about businesses. You're in the business of people and relationships, so the high touch makes a lot more sense.
