Pete Flint Q&A On Navigating Market Changes With Supply & Demand

Hey Pete, thanks for the time today. My name's Kenny Hanson. I'm the founder of a company called MentorPass, which is like ClassPass for startup advisors. And my question is around the supply-demand changes through a downturn. In a market like this, what you would expect to see is demand side probably pulls back as startups and companies get a little bit tighter with budgets. And on the supply side, you have a lot of people that are now looking for a side gig as their portfolios tank and they say, oh, I can make $500 an hour advising startups. This is a great side gig for me. I'm wondering if you have any specific tactics or strategies that you've seen be effective in managing that supply-demand shift with an economic downturn.

Yeah, I think it's— I mean, it's hard to be precise on the business, but the sort of principles that we think about are the following. So the classic proven framework for building marketplaces, pick an industry with proven demand, and then use technology to unlock new supply. So, you know, hotels, you know, let's, let's use technology so people can rent out their room. And hence Airbnb was built. Uber and taxis, you know, again, using technology to unlock. So it's often much easier to be in a category where it's like you don't need to create new demand. You are literally leveraging this significant preexisting demand. And then again, using technology to unlock, unlock that new supply that could be just matching or access or something else. So that would be the kind of core principle. The other, the other thing to do is often in these economic downturns, the transactions can be quite episodic. And so the more you can maintain the stickiness on both of those areas, you know, supply and demand, if possible, the better it is. You know, example from, you know, from the Truly experience is like, no one was buying houses in 2008. So we're like, there's no demand. But that said, there was a ton of supply. So the tactics for us was like, okay, on the one hand, on the supply side, we would like, we would integrate into the databases, the MLSs, of the real estate industry and get, you know, near real-time feeds of their inventory. So they were desperate to find incremental marketing channels at low cost. So that way, there's a platform, just upload your feed. And, and we'll market it to millions of users for free. You can buy some premium products, sure. But basically, like, and once it's integrated, they're not, they're not coming off. Because it's free. And the homeowners will hate it and the agents will hate it. So we integrated the database and it was— that was incredibly sticky. And then on the demand side, sure, people weren't buying. But they were looking, they were interested because they were like, you know, how much is— what's going on in the market? How many foreclosures? This is awful. It's like, you know, it's very voyeuristic. And so we would be pretty aggressive on getting people to sign up to emails and say, okay, we're not— if they're not going to buy, they are watching the market. And we're going to, you know, do a lot of the sort of like, you know, the unlock features, if they added their email address and registered, send them new insights on emails, but other stuff that might be on the area. So we end up building this massive, massive email list over that period. And then as things kind of bounced back in 2009, 2010, we were like, okay, people were like looking for bargains. And so we would, we would literally send out 50 million emails a week to folks. When there's 5 million transactions a year, that's a hell of a lot of emails. And so we were able to basically— so thinking about you're in these lockup supply, try to lock up demand and try to basically be front of mind when things do come back.