Nick Huzar explains how OfferUp won by focusing on NFL markets first, using Facebook ads for hyper-local targeting, and keeping its growth playbook secret from competitors. Dominating dense coastal cities made the platform defensible nationwide against rivals like Letgo and Facebook.
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It's a pleasure to meet you, Richard Abusi, founder of Citizen Shipper. We're a pet transportation marketplace and a huge congratulations on the success of OfferUp. You know, something you said early on about working for 2 years for T-Mobile and never wanting a boss again, that's something that really resonates with me. Before I moved to Texas, I worked for a big company in the UK and pledged I'd never have a boss again. And so far I never have. So for the last 20 years, I have a similar story. Nick, I'd love to hear more about your, what were the most popular acquisition channels in your early days? You know, how did you get customers to, or people to use you? And then I'd also like to hear a little bit about defensibility. You mentioned a little bit about trust and safety, but, you know, was there anything else you did to really sort of secure OfferUp from potential competitors coming in?
Yeah, it's a good question. So You know, I go back to the early days. I believe that we didn't have to win everywhere. We just had to take out the biggest cities in the US, like NFL cities. So we did a lot of research on what cities really mattered. And no offense to anybody in Middle America, but we didn't really care. We're like, somebody, if Amazon comes and gets Middle America, great. But we want all the coastal cities because they're the biggest ones. They have the most stuff where the mouse should benefit. You know, and so there's more population density. So our theory was like, if we could take out the whole, most of the big cities in the country, then the US would really, you know, we'd be pretty defensible. And so that was the playbook that we basically ran for multiple years before ultimately Letgo came in the US and then we ended up acquiring them. They were the next largest competitor. And then I didn't see Facebook coming, to be clear. But, you know, so that was the strategy we ran. And I'm so happy we ran it because when Facebook came in, that's what they— that's where they were way bigger, definitely in the middle of the US. But, you know, we definitely have a lot of markets where we're much bigger than them here in the US. And I think a lot of it was that strategic thinking through like, oh no, no, we got to get after these big cities. You know, I think in terms of just overall channels, you know, you should try all of them. Don't feel like, and then try them again, by the way. Sometimes we try a channel like years later and all of a sudden it's better. And so, like I said, we got really good at targeting locally and running against multiple channels. Ultimately for us, I think Facebook, you know, is and continues to be some of the best in terms of targeting. Now the cost has gone up, but still you can be, you can really hone in a lot more. We tried TikTok, we've tried Snapchat, everything. But that one seems to perform, you know, pretty well. And so that's the way I would think about it is just, you know, we got in there early, we got in there early. We were very aggressive in our approach and also very quiet in terms of like PR. We didn't want to tell everyone else what we were doing. And luckily that playbook, basically everything, if I go all the way back 10 years, everything we thought would happen has kind of happened. So we were pretty fortunate with that. And even when, by the way, Letgo came in, they had spent considerable capital trying to unseat OfferUp in the US, which they should because they were trying to play catch up. But even then they couldn't, they couldn't kind of overcome where we were in those markets. So you kind of get economies of scale. Like if all of a sudden people are using OfferUp, like once the word of mouth starts going, then you really, that becomes pretty hard because you could, yes, you could be that next competitor that comes in. But people are going to go, well, why? How's this different than OfferUp? And like, do they have more users? Well, no, everyone's already using OfferUp. So that's kind of the hard— that's kind of the hard part until you have a competitor like Facebook that already has, you know, way more users than OfferUp, way more capital, way more engineers. So that was a big serious threat. But again, our belief was, you know, Facebook, that's one thing for them, but then they've got TikTok and Now they got something to compete with Twitter. Like, this is just one of 20 different initiatives. So I've always told our team, let's be the best at local. Let's— this game is not gonna be won in quarters, it'll be won in years. Let's keep plugging away and we're gonna be fine. And it's a massive market out there, right? You know, we don't all shop at Walmart, is my point.
