20 VC 072: Super Angel, Fabrice Grinda: The Future of Startup Investing

Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors with over $300 million in exits and 200 angel investments including the likes of Alibaba, LendingClub and BrightRoll. Fabrice is currently investing in startups and building companies through FJ Labs, which he cofounded with business partner Jose Marin. Fabrice is also co-founder and executive chairman of Beepi, a next generation used car marketplace which recently raised $60 million in series B funding. Prior to FJ Labs and Beepi, Fabrice was co-founder and co-CEO of OLX, one of the largest websites in the world with over 200 million unique visitors per month. Submit Your Startup To Fabrice In Today's Episode You Will Learn: 1.) How did Fabrice make his entry into the world of investing? 2.) How important is it for investors to have entrepreneurial experience? 3.) What are the most common problems Fabrice's portfolio companies face? 4.) What is Fabrice's selection criteria for startups when investing and what determines the valuation of a startup? 5.) How does Fabrice respond to the allegation that he is a clone collector? 6.) With Fabrice's $1m syndicate, does he believe syndicates have the potential to replace VC? Items Mentioned In Today's Show: Fabrice's Fave Book: What If by Randall Munroe, Think Like A Freak by Stephen Dubner Fabrice's Fave Newsletter: TechCrunch Fabric's Most Recent Investment: Flexport As always you can follow Harry, The Twenty Minute VC and Fabrice on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow Harry on Instagram here!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Harry Stebbings?

  You're listening to the 20 Minute VC with your host Harry Stebbings and today we return to the world of New York investing with the welcoming of super angel Fabrice Grinda onto the show. Fabrice is among the world's leading internet entrepreneurs and investors. Just to hit you with some numbers, he has over $300 million in exits and has made over 200 angel investments, including in the likes of Alibaba, Lending Club and Brightroll. Fabrice is currently investing in startups and building companies through FJ Labs which he co-founded with business partner Jose Marin. Fabrice is also co-founder and executive chairman of BP, a next generation used car

• 0:42Harry Stebbings?

  marketplace which recently raised an astonishing $60 million in Series B funding. Prior to FJ Labs and BP, Fabrice was co-founder and co-CEO of OLX, one of the largest websites in the world with over 200 million unique visitors per month. But before we dive into today's show with the legend that is Fabrice, I want to talk to you about my favourite law firm, Vidar Law. The reason they're so great is because they assist startups to build a solid legal foundation and take away all the hassle and worry of any legal conflicts or issues that might arise in the startup journey, allowing you, the startup, to grow and focus on your business and transition to the next phase.

• 1:23Harry Stebbings?

  It really is worth taking a look at www.vidarlaw.com or by following at Chris underscore Vidar, V I D A R, Law on Twitter. But ladies and gentlemen, without further ado, it is time to welcome the super angel himself, it is of course Fabrice Grinda.

• 1:48Speaker 01

  You have now arrived at your destination.

• 1:51Harry Stebbings?

  Well Fabrice, welcome to the 20 Minute VC, it's an absolute pleasure to have you on the show.

• 1:56Speaker 02

  It's a pleasure to be here.

• 1:58Harry Stebbings?

  And I'd love to kick off today's show by hearing a little about your background and how you made the move from founding three startups and exiting OLX to making over 200 investments, I believe it is now.

• 2:11Speaker 02

  Yeah, I mean, the the reality is, um, I still define myself as an entrepreneur, not as an investor. Uh, I started becoming an entrepreneur seventeen years ago when I built my first startup, which is an eBay type site for friends, uh, then built a mobile content company in the US and then build Oalox. But actually, the reality is, over the last two years, I've co-founded four more startups, uh, in the US and my day job remains, uh, being operational in in startups that I found. That said, throughout my life, even from the early, from the very beginning, by virtue of being a visible and successful entrepreneur, other entrepreneurs came to me and asked for advice and asked me if I could invest.

• 2:54Speaker 02

  And so I became, I started being an angel investor from the very beginning, even the ninety, ninety eight, ninety nine, two thousand timeframe, uh, and scaled that up as I became more successful and actually had capital to deploy in startups. So after I sold Zingy, uh, in, uh, in, uh, June of oh four, I started investing more and and increased, uh, the volume and pace of investments as I came up with the Natus program and started working with my partner, Jose Marin. And so, starting in oh eight, oh nine, started doing twenty, thirty investments here. Now, it's, it it it scaled way beyond that. Um, and so it's not as though I transitioned from being an entrepreneur to being an investor. Uh, I've always been both, but I started, uh, but I guess, uh, started being, and I am mostly

• 3:39Speaker 02

  an entrepreneur, who happens to do angel investing at night.

• 3:42Harry Stebbings?

  And that's very interesting, because, you know, not all investors have that entrepreneurial experience. So how important do you think it is for angel investors and for VCs to have that operational experience to fully understand the the startup experience? Do you think it's crucial?

• 3:59Speaker 02

  I think there there are different ways to attack this, and many investors who've only been professional investors are fantastic at it. And, uh, the the reason it helps to have had operational experience is it it helps to relate to the entrepreneur and understand, and to be helpful when they're facing issues, to be helpful, like, when they're, when they're, when they're iterating on a product or they need... They have technology decisions to make or they're faced with a dilemma in terms of like. Whether or not they should sell their company, which is their baby, having been in their shoes. I I I can relate better and gives me more empathy for the position they they find themselves in. By that said. There are amazing, many amazing um investors who've never been entrepreneurs before. So it's just a question of approach.

• 4:42Speaker 02

  Uh obviously, I I don't know otherwise, uh and but it allows you to relate, I suspect, better to most entrepreneurs.

• 4:51Harry Stebbings?

  And you said there about startups facing problems and then angels and investors helping them out. What problems have your startups, which you've invested in, most come up against? What's the kind of core problem that keeps coming up?

• 5:04Speaker 02

  The the the main problem that we help with and the main, the main thing that startups fail or or face is that. Startups have a tendency to lose money in the early years, and so they need to be basically fundraising on a constant basis and. They, the startup doesn't control the general macro environment, doesn't control the general funding environment. It also doesn't control the trends that are, to me, that are supposed to be considered to be interesting and or sexy at that time. And so. In a way, startup founders are always raising money, startup founders are always selling. And and we need to be in in a position to help them and think through, okay, how much capital they need to raise, who do they need to raise from?

• 5:46Speaker 02

  When is the right time to raise? What is the right valuation raise? Because it's actually, especially if the company is doing well. Um it can be a trap to to want to raise too much money at too high a price and price yourself out of exits. Price yourself out of uh upcoming subsequent rates. So being thoughtful on the fundraising is something that that we've uh. We spend most of our time um helping startups with, because it's also where we can have the most value add. With the least amount of work that we need to do, because it's all about a like relationship and also talking about experiences that we face time and time again.

• 6:21Harry Stebbings?

  And valuations is obviously a much talked about and controversial point. So how do you price startups?

• 6:29Speaker 02

  Well, startups obviously are not the, or not profitable. So it's definitely not discounted cash, net present value of discounted future cash flows. There is an element of a supply and demand in the sense that we don't, we typically don't lead the rounds as we don't typically price them. That said, we have a sense of whether or not a price is right based on what is the experience of the team, how big, what, how big a market are they playing in? Are they the leaders in the category or are they not the leaders in the category? How much traction do they have and what do the unit economics of the business look like? What is their fully loaded customer acquisition cost versus the net contribution margin per

• 7:14Speaker 02

  customer and what on an 18 month basis, a mini LTV if you want of that customer? What is the net contribution margin look like and how does that compare to the fully loaded customer acquisition costs? And a, obviously the more traction you have, the more experience the team, the, the more stronger your leadership position, the higher valuation. And when we find fundamental disconnects between valuation and traction, team experience, et cetera, we, we have a tendency to pass and we've remained reasonably disciplined from a, and, and price sensitive as we've realized that most startups do fail and you need to make sure that you, you, the startups that you do succeed with actually help to cover

• 7:59Speaker 02

  all the losses that you make otherwise. And if you invest at way too high a price, you're not going to, to cover all the other failures that you have otherwise.

• 8:07Harry Stebbings?

  And talking of valuations and then you not investing due to valuation, I'd love to delve into your personal investing strategy. So what's the selection criteria for you to invest?

• 8:19Speaker 02

  I mean, first of all, you need to realize that because I have a day job as an operator in a startup, I only invest in categories that I understand. And so, obviously, my expertise in intraprenders has been building two-sided marketplaces. And so, the main area of focus over the years and definitely recently has been especially investing in vertical, transactional, consumer-facing marketplaces, mostly in the US and a little bit in the rest of the world in large markets. And Brazil, Turkey, Russia, India, China, UK, Germany, and France. The, on average, we're stage agnostic, so we'll invest at any stage.

• 9:04Speaker 02

  By volume, though, by virtue of the funnel, we invest more in the seed stage than in the A, more in the A than in the B, and more in the EB than the later stages. Check sizes vary, but on average, it's about 200K at seed, 300K at the A, 500K at the B, and then 1 to 5 million in the later stages. Because we're rarely leading the brands, we don't compete with the VCs. I mean, someone else is leading it and they invite us to join. So, we never want to write a check size that's going to be threatening to the lead investors because we want to bring in or come in alongside them. So, in a typical seed round, which is 1 and 1.5 million, we're going to write 200K. The lead is going to write 750 or a million.

• 9:50Speaker 02

  You know, there's no conflict there and we can be helpful. And same thing, in A, there's going to be a 5, 8 million dollar round. We're going to write a 500K check. We're in the very later stages where the company's raising 100 million and we're writing a 1 or 2 million dollar check. We're again not competing with the main investors. And as I mentioned earlier, I mean, we don't want board seats, we don't want observer seats, et cetera. And so, we're very friendly and easy to work with. And even though we're not active on the board, many of the intraprenders think we're extraordinarily helpful because we help them, we take the entrepreneurial approach in terms of the problems that they face and we can introduce them to other companies in the portfolio. Now that we have more than 209 startup investments,

• 10:34Speaker 02

  we can help introduce them to VCs or potential acquirers.

• 10:38Harry Stebbings?

  And you said there about being invited by VCs and lead investors. Are there any investing houses or VCs in particular that you'd like to co-invest alongside?

• 10:48Speaker 02

  Um. Yeah, I mean, the reality is by virtue of the volume of deals we we or investments uh we've made. We have a tendency to work with a lot of VCs, be very friendly with them. Um, and and and so by by the main VCs that we work with are um. Ambassador Venture Partners, General Cadless, Andreessen Horowitz. Um, we we we work with Red Point, uh, and we work with DN Capital in Europe. And those would be the ones we spend that we share the most deals with. But the reality is, you know, everyone from Axel to Benchmark to Matrix to Venrock, et cetera.

• 11:30Speaker 02

  To Spark or or or VCs that we work with um over the years and given the number of deals we do. And so we're very friendly with a lot of VCs. And I guess the ones I mentioned are the ones we spend the most time working with.

• 11:43Harry Stebbings?

  And then in terms of your portfolio companies. The Observer wrote an article saying that you're a clone collector, choosing proven business models and adapting them to to other markets. How do you respond to that?

• 11:58Speaker 02

  Well, I mean, the the it when we invest outside of the US, which is a minority of investments, it's like thirty percent or. Not not even these days, rather than twenty, twenty-five percent. Uh, in in non-US markets, we have a tendency to take ideas of improvement elsewhere. Adapt them to the market and invest in those. And that's why I think they they are sometimes they can be considered closed, even though frankly there's more genius to it. Because you do need to adapt them for the local market conditions. But the reality is, it's not the core of uh of what I do. The core of what I do is invest in next generation disruptive marketplaces in the US. And all these are innovative ideas.

• 12:40Speaker 02

  In fact, uh, uh, companies I co-founded have been disrupting in market new businesses. You know, so I co-founded a year and a half ago a company called BP, which is an end-to-end car marketplace of which I'm executive chairman. And if it's actually quite the opposite, we are the the disruptors in that model and that category. And we've been cloned countless times, both in the US and abroad.

• 13:05Harry Stebbings?

  And how do you then respond to that competitive threat rising? Does that concern you?

• 13:12Speaker 02

  Well, not not not really. I mean, the reality is the genius isn't the execution. It's not in in the idea. If you have an idea and you don't do anything with it, um, someone else is going is going to i- i- i- i- is going to is going to execute and defeat you. And so the the barrier to entry, in fact, if we look at how we select companies to invest in, and there's a bunch of criteria, um, barriers to entry is not one of them, because the barriers to entry are something you build by virtue of executing. You build a brand, you build a customer base, you build operational excellence and expertise. And that's the way that you build those barriers to entry. Um, the idea itself i- i- i- is not is not key. I mean,

• 13:54Speaker 02

  uh, Edison, who is a genius in his own right, one of the people who came up with the most ideas, the most patents, once said that genius is one percent inspiration and ninety nine percent perseverance. It's all the hard work that is actually that makes a difference between between success and failure.

• 14:11Harry Stebbings?

  And you said there about earlier about board seats and you didn't like to take them. Why why don't you like to take them? And should startups be willing to offer board seats more willingly? Or should they reserve some back, do you think?

• 14:24Speaker 02

  Well, those are two really different questions. The reason that I don't want to take board seats is, again, uh, my day job is to be an entrepreneur, not an investor. I don't have the time to sit on many boards. My partner doesn't have the time to sit on many boards. We're investors in two hundred and nine companies right now, I think two hundred and ten maybe.

• 14:40Harry Stebbings?

  Yeah.

• 14:41Speaker 02

  And uh, there's no way we can sit on the board of that many companies. And also, we need to realize, we we invest two hundred K as part of whatever, a a million, million and a half round, we own a few percentage points of our company. I- i- i- it doesn't make sense from a time allocation to be on the board of a company like that. And the reality is, you can be very valid for a company without being at a board. They value your like like if we invest seed, they're gonna need to raise a series A round. And so the intros, the the aforementioned VCs are very, very useful, but because they're going Get meeting now and and and whether or not they raise is a different issue, but that's extraordinarily helpful to them more so than

• 15:23Speaker 02

  being being on the board. Now in terms of when and how should your board be composed and when should you offer board seats? I I keep boards small in general, like three or five people. Uh, I'd offer board seats to the lead VC if you have one seed. Uh, and maybe the lead VC and A, maybe have the guy from the seed round actually drop off the board and have uh two VCs who are doing it. Either A lead it uh be on the board and then you have uh two investor board board members and three from the founding from the founding team.

• 15:56Harry Stebbings?

  And you said before that you don't follow on, but you you have made some follow on investments. So what is the criteria for being able to follow on? What makes you lead a follow on round?

• 16:07Speaker 02

  The, well, we don't lead the following, but not the one pricing it, but wh- whether or not we follow on frankly. We do make, we have made some follow on investments. The frankly, the reason we don't typically follow on is usually, especially in frothy times, the amount of information you get between the seed and the A. Uh, it is not enough to know that this is a clear winner. Um, so uh often, so the price increases dramatically, the parata of our investment would be frankly often greater than the investment we made originally. And we don't have that much more information. So we may not follow on the A and actually follow on the B or the C if it becomes more proven.

• 16:51Speaker 02

  Um, the the frankly, the the the one main criteria for do we follow on is it like obvious that this is an awesome company? And it's a total double brainer. If it's a total double brainer, we're gonna do it. If not, we're not gonna do it. The just because I don't have enough capital, I mean, you need to remember Jose and I are investing your own capital. Not not a funds capital. And so we need to be thoughtful about how much capital do we deploy? What do our cash flows look like, etc. I mean, to date, uh, I firstly invested thirty million dollars uh with. Which is a large portion of my net worth in startups. And so I I um I I I I don't have enough capital to just follow on and everything.

• 17:34Speaker 02

  And and yeah, I do understand that the if you knew upfront, which of your which of your companies were winners, doubling down on them makes a lot of sense. But often, we don't have enough information to be able to make that such a call. Definitely not between the C and the A. Often, though, between the C and the B, we do get enough information and we start following on that.

• 17:53Harry Stebbings?

  And you mentioned there about Jose, uh and you work very closely alongside, obviously, Jose. He's your investing partner. So how important do you feel it is for investors to have kind of co-investors to the partners?

• 18:06Speaker 02

  The, I mean, the reality is our it it's not important or essential. It just so happens that it makes our lives easier. We we get better deal flow. We have another set of eyes uh uh to to look at companies. We can take call when one is busy, the other can take calls. And at the same time, we have slightly different expertise and interests and and Jose is really good at dealing with all the um. I mean, he's really good in general, but beyond that, he's also really good at dealing with all the the the legal aspects of things and re reviewing the LOIs and the stock purchase agreements, et cetera. Where frankly, if I read one, you know, three words, I'm already asleep and and couldn't cure loss.

• 18:49Speaker 02

  So having someone who has the expertise, diligence and interest in in making sure that that uh all the I's are dotted and all the T's are crossed makes makes a lot of sense.

• 19:02Harry Stebbings?

  And you mentioned there about your deal flow and having two helps the deal flow. How do you handle your deal flow then? Is is most of it through referrals in your network?

• 19:11Speaker 02

  The deal flow frankly comes from a number of sources. So first of all, I'm actually known as a as an angel investor and and reasonably visible. So actually, a fair amount of deals come directly to us through Facebook, LinkedIn. And actually, we have a on my blog, there is a submit your startup forum and we we get a lot of deal flow there as well. Number two, at this point, we backed two hundred and nine startups, which means we backed five hundred entrepreneurs or so. These entrepreneurs come for the second time around or they send it to their friends. And so existing companies or entrepreneurs we backed send us a lot of new deal flow, be it themselves the second time around or their friends. And number three.

• 19:55Speaker 02

  We work with the other early stage VCs that we share deals with like Softec. We work with the later stage VCs, like as I mentioned before, from Andreessen to general catalyst to Bessemer, who send us either deals that are too early for them or they invite us in deals where we have expertise. So if it's going to be, if it's a consumer facing marketplace or if it's something in Brazil or Turkey or Russia or Germany where we can help, they might invite us for a small check. So the combination, it's a combination of these three sources.

• 20:29Harry Stebbings?

  And talking of co-investors, your angel list syndicate now has 1.3 million behind it. Do you feel this syndicated model of investment could replace the VC industry in the future?

• 20:41Speaker 02

  It's a very long way away from being able to replace the VC industry. And the VC, every year on average, you have about $50 billion of VC investments. Last year, I think the syndicated model total between all different sites like Funders Club and Angel List were like 200 million. And maybe this year it'll be a couple hundred million more. So it's definitely playing a role in the seed stage, but it's very far from playing a role in the A, the B, the Cs, the Ds, et cetera. I think it'll complement the model the same way, frankly, that other alternative sources of capital like Kickstarter or crowdfunding sites where people were doing pre-sales, et cetera,

• 21:24Speaker 02

  are also complementing the traditional liquidity based funding model. But it will not replace it. It'll just add liquidity, it'll add depth and it'll add and it'll make it more efficient. But it's not going to replace that venture model in time soon. That said, we've been very happy and successful with this model. I mean, we've raised over $10 million through Funders Club and Angel List across different companies, might even be close to 20 million at this point, between the various multi-company funds and the specific investments that we've made through these platforms.

• 22:02Harry Stebbings?

  And looking back at your investing career so far now, what would you say are the biggest takeaways or lessons that you've learned from the experience?

• 22:11Speaker 02

  The, well, the, the, sticking to your knitting and sticking to your approach makes a lot of sense. So i- i- i- in, in, in our case, you know, we have a consumer-facing marketplace expertise. And in when we've invested, things we understood, we've done well. When we've, uh, when we've been seduced by great founders, et cetera, we've done last well. And it's not, they, just because we didn't have expertise, we didn't necessarily know what we were doing. And so we've, we've typically, typically been valuation-sensitive, uh, focused on, on the various heuristic. And so the way we decide whether we're going to invest is, do we like the team? Do we like the product and we expect the product to be live? Um, do we like the business?

• 22:53Speaker 02

  And that subdivides in nine, some nine, um, business selection criteria. And, uh, do we like, do we like the deal terms? And so when, when these are met, we typically done well. And, and over the years of invested, as I said, around two hundred and ten startups, we've actually made money in over fifty percent of the exits. Uh, on average today, we've done about seven X and, uh, over seventy or eighty percent of IRR. So like complete top, top, top, top percentile in terms of performance because we've stuck to our knitting. And a few times that we've strayed, um, if not, not done nearly as well. But clearly in our case, what we've learned is diversification makes a lot of sense.

• 23:35Speaker 02

  So the more investments you have, the more you're likely to have the few deals that return most of their, uh, that do most of the return. And so how, making a lot of investments has paid off, uh, pretty dramatically for us. And also in our case, funding the people we know and trust has done, uh, has worked really, really well for us as well. And so entrepreneurs that we, we've known personally, uh, that we've been close to and that we've, that we've backed, um, have, have done very, very well for us.

• 24:01Harry Stebbings?

  And if it's okay with you, we're going to dive into a quickfire round now.

• 24:05Speaker 02

  Yeah, go for it.

• 24:06Harry Stebbings?

  So your favorite book and why?

• 24:08Speaker 02

  The so the reality is the same way I don't have a favorite movie or a favorite song, etcetera. It evolves. I have a favorite, you know, fifty books and it and it varies all the time. I can tell you my favorite book of two thousand fourteen was a book called What If? Which is by the ex K C D author. It's a it it it's so funny and so smart. It's basically a former NASA physicist who's asked ludicrous questions, which he answers seriously. Uh, and it was amazing. I also had a blast reading a fiction book called um. Um, called The Martian by Indore in twenty fifteen. Um, two books that I I'd recommend are probably uh.

• 24:52Speaker 02

  Think Like a Freak, which is a nonfiction book, which is the the sequel to Freakonomics and Super Freakonomics. Uh, by Stephen Lovett and Dubner and a wonderful. A historical fiction novel called Circling the Sun about this amazing woman who in the nineteen twenties. Uh, was, uh, um, I guess she was a a horse racer and and pilot. She was the first woman across Atlantic and and and so being a feminist and avant garde woman in in in her own right. An amazing, amazing role model for many.

• 25:28Harry Stebbings?

  Your best productivity tip and tool?

• 25:32Speaker 02

  The best way to be productive is to monotask and doing one thing at a time. And to be completely and entirely focused on that task. So it means turning off all notifications um on LinkedIn, on Facebook, on WhatsApp, on your phone. If you're in a meeting, turn your phone off or put it in airplane mode, even if even if it's. If the rings are off, if it's vibrating or if it beeps, it's going to distract you. You need to have your attention solely focused with the task at hand, whatever that task may be. And you need to be in the present, and that means all notifications to be off on on Skype. Uh, by default, every time someone likes it, you see the little name that needs to be off.

• 26:15Speaker 02

  On emails, if emails are coming in, you you typically get like a little box. Uh, it it shows you that they're coming. That needs to be off. Everything needs to be off, such that you can be focused on the task at hand.

• 26:27Harry Stebbings?

  Your most read blog or newsletter?

• 26:32Speaker 02

  The it's TechCrunch just by virtue of being in the tech sector where I need to be aware of what's going on and in the space. And it's a great way to know who's getting funded, where the ideas that are that are top of mind, et cetera.

• 26:48Harry Stebbings?

  When I say successful, who's the first person that comes to mind?

• 26:53Speaker 02

  So it's interesting, success means a lot of things for a lot of people. You could be successful in politics, you could be successful as an artist, you can be successful in business. Now, if you mean successful business in general, I'd probably say Bill Gates, both as a philanthropist and as a businessman. If you think in terms of of of politics, you know, be someone like Octavian or Augustus, who single-handedly created the Roman Empire and the civil war, Genghis Khan, that that created the largest empire in the history of humanity. And and and and create a structure that in a system that actually outlasted its dead half by many, many years.

• 27:28Harry Stebbings?

  The best piece of advice to entrepreneurs starting out in the industry?

• 27:34Speaker 02

  Today is the best time ever to create a startup, it's cheaper than ever before, you have a larger market than ever before. The the the technologies are easier to use and available more available than ever before. And and and so just go for it. Now, in terms of what it's going to take, it's not intelligence, it's often not the idea. It's actually grit, tenacity and resilience that's going to make the difference between success and failure. Now, in terms of the idea, even if your idea is not fantastic, by repeated iteration of everything, or iteration on the product, iteration on the business model, iteration on the product market fit, you ultimately find something that sticks. If you throw enough things on the wall, something ultimately sticks.

• 28:17Speaker 02

  And so multi-varied testing rapidly and rapidly iterating will lead you to find something that works. And so just have the grit, tenacity and passion to see it through.

• 28:29Harry Stebbings?

  Your most recent investment and why you said yes?

• 28:33Speaker 02

  The company I recently invested that I really like is Flexport, which is an end-to-end freight forwarding company. So marketplaces have been evolving from these horizontal listing models where the sites, Craigslist-type site if you want, where they're multi-category, people put in what they have available and like other people ping them, and it's a lot of work for the buyer and the seller. So there's been an evolution towards first vertical listing models like Monster, HomeAway to vertical transactional model to like Airbnb or stuff up where the site does the transaction. And now you have these next-generation marketplaces

• 29:18Speaker 02

  where the site does a lot of the work for the buyer and/or the seller, and often to the buyer, the service, it looks like the site is the provider of the service. And that's true of Uber if you think of it, or Handy. It doesn't look like Uber is a marketplace, even though it is a marketplace. It looks like Uber is the provider of the service. And that trend has been extending itself to the B2B world, and Flexport is the forefront of it. If you look at the freight forwarding industry, it's massive and it's completely fragmented. And there are many pieces of the component. If you want to send something from a factory in China to a retail store in New York, the number of people that need

• 30:01Speaker 02

  to touch the product along the way is huge. It's like eight pieces, no one's online except there. So having an end-to-end solution for that makes a lot of sense. And so a lot of the thinking we were doing on the end-to-end consumer-facing marketplaces, we're now starting to apply to the B2B marketplaces.

• 30:19Harry Stebbings?

  Well, Fabrice, it's been absolutely fantastic having you on the show. Thank you so much for joining us on this very special episode.

• 30:25Speaker 02

  Well, thank you for having me.

• 30:26Harry Stebbings?

  What an amazing episode with Fabrice and as always, all the items mentioned in today's episode can be found on the blog at www.the20minetc.com. But before we leave today, would you like to focus on growing your business and having peace of mind with regard to the legal side of your company? Then head on over to vidarlaw at www.vidarlaw.com. I use Vidar myself and Chris Werner, a partner there, is a good personal friend of mine. He's an amazing chap and they are always on hand at Vidar with decades of experience to advise and guide on anything from copyright infringement to employment law to mergers and transactions.

• 31:07Harry Stebbings?

  And you can find them on Twitter at @chris_vidarlaw or you can email Chris at chriswerner at vidar, v-i-d-a-r, law, dot com. Thank you so much as always for your continued support and we look so forward to seeing you in the next episode.