Whatnot founder: This is the future of e-commerce

$1M Attention Guide: 15+ ways to get eyeballs on what you're building https://clickhubspot.com/brcv Episode 863: Shaan Puri ( https://x.com/ShaanVP ) and Sam Parr ( https://x.com/theSamParr ) talk to Grant Lafontaine ( https://x.com/GrantLaFontaine ) the founder of Whatnot. — Show Notes: (0:00) Intro (1:00) Grant turned down Shaan’s investment (2:12) Shaan buys a crab on Whatnot (3:58) First 1,000 users (19:07) Black hat growth tactics (28:52) 30 sales to $2.3M in year 1 (34:03) $2.3M to $163M in year 2 (34:56) $163M to $1B in year 3 (37:02) How to be a billion-dollar founder (42:04) Going all the way deep on a single problem (45:44) Don’t let people use fancy language (49:48) Being disagreeable but likable (50:43) The reason I left Facebook (53:39) “If you think you’re moving fast, you’re probably not” (54:13) Trends: NeeDohs, squishies, gold bars (56:21) 9-figure sellers — Links: • Whatnot - https://www.whatnot.com/ — Check Out Sam's Stuff: • Hampton (joinhampton.com): My community for founders. Average member does $25m/year. Many of the guests are members. Get after it...apply: http://joinhampton.com/mfm — Check Out Shaan's Stuff: • Shaan's weekly email - https://www.shaanpuri.com • Visit https://www.somewhere.com/mfm to hire worldwide talent like Shaan and get $500 off for being an MFM listener. Hire developers, assistants, marketing pros, sales teams and more for 80% less than US equivalents. • Mercury - Shaan uses Mercury across all of his companies. you can too: http://mercury.com/ Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group, Column, N. A., Members FDIC • I run all my newsletters on Beehiiv and you should too + we're giving away $10k to our favorite newsletter, check it out: beehiiv.com/mfm-challenge My First Million is a HubSpot Original Podcast // Brought to you by HubSpot Media // Production by Arie Desormeaux // Editing by Ezra Bakker Trupiano /

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

• 0:00Shaan Puri?

  You built a company that is worth $20 billion. But just to put it out in perspective, that is more than if you add up the entire market cap of Wendy's, Under Armour, Hertz Rental Car, Harley Davidson, American Airlines also. Isn't that bananas when you hear that?

• 0:18Speaker 01

  Yeah, I think it's absolutely nuts.

• 0:29Shaan Puri?

  What I find interesting about you is that you went from a guy who was a kid who was working in a deli, almost failed out of high school, to now you've you built a company that is worth $20 billion.

• 0:41Speaker 01

  In all honesty, I try not to focus on the number because I just like if you focus on it sort of seen zipsy and then you're like, well, I've, you know, done a lot already, I'll pat myself on the back. But I think we're pretty early in what we're doing. And so I just try not to think about it and just sort of look at like the problem ahead and put one step, one foot in front of the other. And yeah, we started this thing six and a half years ago. There's still a lot of work to do.

• 1:03Shaan Puri?

  Yeah, I remember because you may not remember this, but we were on a phone call and I was like, hey, this is a great idea. I'd love to invest. And you're like, I don't know, we got like, kind of, it's already full. And I was like, oh, but I'm such a great guy. And then you were like, we'll see. And I didn't follow up and that not following up cost me, cost me dearly.

• 1:21Speaker 01

  I actually do remember.

• 1:24Shaan Puri?

  Say more. I wrote it down in my diary that day.

• 1:26Sam Parr?

  Grant, what happened from your perspective?

• 1:28Shaan Puri?

  Yeah, yeah, you tell the story.

• 1:29Speaker 01

  Yeah. So what happened? I mean, whenever you're like one of the like, we've had rounds where we've been a hot company and we've had rounds where we've not been a hot company, sort of like seen this, the full spectrum of things. And once the rounds closed, all we really want to do is go back to work. So I remember talking to Sean and, you know, I'm like, I should probably follow up with him. And then I just got busy with work and didn't. And I think I like in my head, I sort of felt bad. So I think I should have done something, but I don't know.

• 2:00Shaan Puri?

  Well, listen, I've been a fan. I was a fan before. I'm still a fan now. Now I'm just a bitter fan, which is a unique place to be in. And we should explain what the company is, right? You're the founder of whatnot. What's amazing is you've built a large company in a space that I think most people would have found very small and unusual, unusual, it's almost like a stack of unusual behaviors. We'll just give a kind of quick summary, which is if you open up whatnot today, the app, you will see people selling all kinds of things. It started off with collectibles and, you know, like these little Funko, Funko dolls and then opening up packs of cards and stuff like that. But now you could buy anything. I, Sam, I don't know if you know this, you could buy crazy shit on whatnot.

• 2:40Shaan Puri?

  I bought a crab this morning. It was like a fisherman fishing and he's like, oh, I got these crabs. And then he's like, you can buy this crab right now. Bought a crab. He's like, great. It's gonna be sent in the mail to you. Congratulations, Sean. And there's a crab coming my way now. And that's, I don't know what just happened, but I have a crab coming in the mail.

• 3:00Speaker 01

  The seafood's incredibly good, to be honest. Like, I actually eat it. I eat it like very regularly. It's my favorite.

• 3:05Shaan Puri?

  It better be because I'm telling my wife I bought internet crab and I don't know if she wants that to be in the house, but I got internet crabs coming my way.

• 3:13Speaker 01

  You saw where it came from. You don't know what you're getting if you go to the supermarket.

• 3:16Shaan Puri?

  That's true.

• 3:16Speaker 01

  That thing came off the boat.

• 3:17Shaan Puri?

  The person who was doing it, their profile shows like how many they've sold and it says 3,300. Her username's shout out to I love crabs. So I love crabs. She sold 3,300. Yeah, this crab pack I bought, whatever, it's $34. She's made over a hundred grand selling crabs on the internet. Like, this is unbelievable.

• 3:37Speaker 01

  Yeah, last week I had a full crab boil brought to you by whatnot.

• 3:41Shaan Puri?

  I can't tell if Sam is dumbfounded or his internet connection has dropped. He's made the same face for the last 30 seconds.

• 3:46Sam Parr?

  I want crab, but I don't understand how on earth you could start something like this because a marketplace like this seems like probably the hardest business to start. I think marketplaces are probably the most durable and also the most challenging. And when Sean originally told me this idea, it might've been four years ago, you might've been two years in, I'm like, yeah, that sounds cool, but these are impossible. How did you get your first, let's say, 1,000 sellers to even use the thing? Because I'd imagine that's harder, sellers, not buyers.

• 4:19Speaker 01

  Yeah, I mean, the early days, it was all sort of hard. I think for us, the reason we did it is because me and Logan, who started it, we'd only ever spent our careers in consumer internet and working on two sided platforms and marketplaces. So the idea of starting a B2B business sounded way more painful than starting like a consumer marketplace to us just because of what we knew. When we, when we first got started, we didn't even have the live component. And so we had to get like immensely creative. And so initially we had a value prop of we'd authenticate whatever was sold.

• 4:52Shaan Puri?

  Can you do it like a movie scene? So you and Logan, you're sitting somewhere, you have an idea. Who says the idea? Where are you? What happened? And then how long from there did the first go live?

• 5:02Speaker 01

  So there's, there's sort of like two founding stories, depending on if you talk to Logan or you talk to me. They're both, both technically true. So I'll go back to the first one because Logan will be annoyed if I don't tell it, which is Logan and I are in Japan over like the holidays. And we were both sort of fed up with our jobs and we both, we'd both built companies before. So we, we prefer to sort of like focus on building things. And we're drinking in a bar in Tokyo. We're like, let's start a business. And we bought like 50 domains. And we knew we're gonna, we're like, let's start a marketplace business. And we bought all these like random domains.

• 5:34Shaan Puri?

  Did you have an idea or just straight to the domain?

• 5:37Speaker 01

  You know, you're drinking in a bar. And so it's like, one of our initial ideas, which we did actually sort of do for a couple of weeks, was we'll build like a better full service Craigslist, which is a horrific business idea, by the way. But that's what we initially started with.

• 5:51Sam Parr?

  That's like in the, in like the starter pack of entrepreneurs.

• 5:55Shaan Puri?

  It's like Craigslist is so ugly. I could do better.

• 5:58Speaker 01

  Yeah, the, the economics just don't make any sense, right? And so you're selling all these used goods that are basically worth nothing, but you need to be able to, you know, spend a bunch of money in order to make the user experience of Craigslist better, like be able to do. So, so sort of like, I'll give you an example.

• 6:14Sam Parr?

  I've talked to hundreds of entrepreneurs on this podcast and I've got a bunch of takeaways. But one of the big ones, one of them that shocks a lot of the people out there who are product nerds, which frankly I am myself, is that oftentimes in order to turn something that's going kind of good into something that's absolutely amazing is to fix the marketing, not the product. And in particular, fix how many people know about the product. That's like the big thing. It's called attention. Say it with me, attention. And so this team at Starter Story, they put together a free guide. They call it the $1 million Attention Guide. It's this pretty amazing 39 page document that's filled with 15 tactics to get eyeballs on what you are building. And so there's a, even a 30 minute recording from Pat,

• 6:56Sam Parr?

  who's the founder of Starter Story. He has interviewed hundreds and hundreds of entrepreneurs. So he's able to put this together, do a bunch of research and experience. And so if you're interested in getting more attention, which frankly you should be, everyone should be, then you should click the link below in the description or scan the QR code right here.

• 7:13Speaker 01

  You know, we're in Tokyo, we buy these domains. Some of the domains are like random domains. We're going to use to like SEO hack, like used Peloton and, you know, you, you name it. Like we probably have like 50 domains. We were sort of growth hacking our way into the business, even at that stage. So anyways, then it comes to sort of like fall of 2019. And we were sort of like, all right, we're gonna make the plunge. Logan, Logan left his job, started to work on, on what became whatnot. And the, the early division of labor was sort of like, Logan's gonna build it and then I'm gonna like do everything else. And so like, all right, on the full service Craigslist. And one of the bits of full service Craigslist was gonna be like, we're gonna be able to do deliveries. And so I'm like, all right, let's go figure out. I did like the envelope on, you know, on the nap can be like, yeah, maybe they're there, there.

• 7:57Speaker 01

  And then I start calling all the delivery companies. So I go on LinkedIn and I LinkedIn all of these people who run delivery businesses, like the guy who runs delivery at Bob's Discount Furniture, the guy who runs delivery at like all these other companies. And I, they take calls with me. I'm like, how much does a delivery cost at scale? And so like, how much is each leg? And how efficient is it? And they were nice enough. They sort of told me. And with, after doing two of those calls, like this just doesn't work, like the cost per delivery relative to the value added on the used item is just, there's no margin there for the business. Then like, oh shit, need to find something else to do. And at that point in time, it was Logan. We brought on an engineer already, and then we had half a designer. So the team was sort of like three and a half people.

• 8:41Sam Parr?

  Can you give a little perspective to your financial situation? Because we have a lot of entrepreneurs who listen, but we have a lot of people who want to start. So like, you're talking about hiring

• 8:50Sam Parr?

  people already. Did you have funding or did you just have like a hundred thousand dollars saved up? What was your financial situation to do that?

• 8:56Speaker 01

  Yeah, probably, I don't know, hundreds, $200,000 in the bank. Not including my 401k.

• 9:02Sam Parr?

  Did you wire that over to the company? And you're like, all right, now we have $200,000. That's what we can hire with.

• 9:07Speaker 01

  Check by check. You know, I just started to go like, the implicit agreement was I'd be willing to spend up to that amount of money doing the business before I raise money. And so like what we did early on, so our first engineer was actually based in Brazil. It was a guy that Logan used to work with and had known really well, who was, who was like super talented. But, you know, he's in Brazil and so it's, it's much more cost effective there. He's kind of difficult to work with. So he's, you know, he's like really talented, but really challenging to work with. So you can get him on the cheap and then you give him some good equity. And then the designer, we just gave him equity. We're like, do the branding, do all of our designs. We'll give you equity in the business, which obviously has, has turned out well for, for both of those folks.

• 9:50Speaker 01

  And so, yeah, we're, we're sort of doing that 24 hours until like doing diligence on delivery costs. I'm like, oh shit, we have to change this business. And by the way, they're building it. So we have, even to this day, we try and have an immense bias to action because you just learn things by doing things. So even if you're wrong, as long as you're willing to admit you're wrong and then change direction, it's totally fine. So Logan and Gustavo were building the backend, like the order system and some of the front end. And go everyone, hey, everyone, I don't think this idea is gonna work. I'm gonna try and find something else. Like, it's okay. We can, we gotta build a payment system anyway. So as long as we're doing a marketplace, we'll keep building. She's like, all right, yeah, we'll still do that. And then I was just going around the internet

• 10:34Speaker 01

  looking for other marketplaces that I thought were really broken. And I kept coming back to eBay, which is, you know, back in the day, I used to sell on Yahoo auctions and eBay. It was like prepayment processing online. It was Pokemon cards. And

• 10:48Shaan Puri?

  You recognize this bad boy?

• 10:50Speaker 01

  I don't know if you can see it.

• 10:50Shaan Puri?

  Is that the, is that the holographic chancey?

• 10:52Speaker 01

  It's a holographic chancy.

• 10:55Speaker 01

  You guys did your diligence.

• 10:57Shaan Puri?

  I bought this off you 20 years ago. Our paths crossed. I bought this for $10.

• 11:03Speaker 01

  I remember that $10 money order. Definitely when I was like, making money is the first time when you're a kid and like, something special about that. Yeah. So I kept on, you know, going through marketplaces and we'll come back to eBay and then like everything that was trending on eBay was collectibles and I could see all my friends were getting back the collectibles. And then me and Logan start making trips to all of the comic book shops in LA. And they're like packed, they're full of Funko Pops. And so I go over and I got this amazing idea. We're gonna go and change and build a collectibles marketplace and let's focus on Funko Pops. And here's all of the reasons.

• 11:43Sam Parr?

  Well, what were the reasons? Because the way that you're describing this is very unsophisticated. And maybe it was at that unsophisticated. Because like if a normal person, they'd be like, well, eBay seems like they're doing collectibles pretty good. Like the marketplaces, I would imagine all about liquidity, meaning the perfect amount of buyers and sellers and there's stuff there. And so like, what was the metric or the signal where you said, this is actually attainable? Or was it just, I want to build a business, this might work, let's just see what happens?

• 12:13Speaker 01

  It's probably a little bit of both. The initial sort of data or research we used to inform it was, at that point in time, you could pull the sales by every single category on eBay. There was a tool, I think it was called TerraPeak. And we went across every single collectibles category and plotted the sales and collectibles through time and how it was growing. And in every one of these categories, it was like going gangbusters. So there's clearly a broader trend happening in the market. And when you looked at it, then there were more Funkos being sold on eBay than comic books, which is one of the reasons we ended up choosing comics, or sorry, Funkos over, you know, say comics or a bunch of the other categories. It was between Funko and Pokemon were the first two categories.

• 12:57Sam Parr?

  So there's demand. People want to buy used Funkos.

• 13:01Speaker 01

  Yeah, there's huge demand. And then the sort of taste element of it was, we just felt like the product hadn't changed in 20 years materially. And it felt like it should. And when we thought there was something around social, we didn't really know what it was, but we just sort of felt there was a with a with sort of this broader trend in collectibles, which was really driven by people our age who had money, getting back into things that were nostalgic from childhood. And the fact that there just hadn't been a lot of innovation in the space that probably should have had more innovation. And we could, we could sort of squint and imagine there's a much better social experience around this, where you discover new things, where you chat with people that who

• 13:43Speaker 01

  are into the same things as you. And then we, yeah, we just took a leap of faith. When we started the company, one of the things where we said is we're not a sort of vision driven company, we're a user driven company. So we were never beholden to like, our idea needing to be like the idea. We were always going to try the thing, make sure we were building a great user experience. And if users didn't love it, we were always willing to just change.

• 14:07Shaan Puri?

  Why do you think that's important? Because I think, you know, the media, movies, TV, magazines, they love the visionary founder, the one who saw it before anybody else. And it's sexy as the founder, you also want to be the visionary founder. And the most iconic founders, you know, Steve Jobs was, you know, I would say that was like, the attribute that was associated with him was this sort of like taste, you know, people don't know what they want, but I will see what they want. I know what I'll do. I'll put a thousand songs in their pocket, that sort of thing. Why do you think it's important to kind of highlight the other way?

• 14:37Speaker 01

  The, when we said we were sort of a customer driven versus vision driven company, it didn't mean that we, we didn't think there was, wasn't any value in having an idea for how you want to build the future. You have to know which direction you're heading in. It was more of this idea, though, that no matter what it starts and begins with the customer, if you have this amazing idea for something and customers do not want that, you're dead to rights. And so if you're thinking about, you know, stack ranking these things in terms of like, what it, what matters, and what is of greater importance, of course, is the customer. No matter how great your vision is. And I think, you know, one of my lessons that's been even more solidified from one running whatnot is,

• 15:22Speaker 01

  stories are sort of BS. You know, a lot of stories in terms of like business are really a mechanism to convince people to follow you versus something of like real substance, like the things that matter actually have much, much, much more depth to them. And so I think the, you know, the visionary founder just sounds good.

• 15:42Shaan Puri?

  What would be an example of a kind of popular myth, but the, the actual substance is something different? What would be an example?

• 15:49Speaker 01

  I'll give you some in the context of whatnot, where things that just like in the early days, sort of feel better, but actually if you dissect these things, they should have worked in a different way. So one of the things like really early on with whatnot was, investors were very nervous to invest in a Funko Pop company. So there was a point in time when we launched our first live auctions product. And, you know, we're growing like 100% month over month. And we talked to a lot of, you know, the well-known investors. And they're like, Funkos, I don't know about that. That's a small market. You know, investors want to invest in these big, giant markets and look at how big Apple is and Google is. But the reality is, when you dissect history, all of those companies

• 16:33Speaker 01

  started in an incredibly small area. And almost every great company starts in incredibly niche or small area, and then takes that and catapults it forward. Because if you're a four-person company like we were in the early days, you can't compete in a mass market. It's almost impossible to drive a ton of consumer value in a mass market. So instead, what you have to do is you have to compete in a small market, build a really great user experience for a smaller subset of people and then expand out.

• 16:59Shaan Puri?

  Isn't that how eBay also started? Like, it wasn't the first thing, like a Pez dispenser, but then wasn't it like, weren't they also very niche at the beginning?

• 17:07Speaker 01

  They were incredibly niche. I think that the real story, from what I've gathered from folks, so there's two, there's two founding stories there too. One is allegedly made up for PR, which was the Pez dispenser one. The real one was like, the first item sold on eBay was a broken laser pointer sold to a broken laser pointer collector. And the PR just didn't want eBay to be known for like, broken junk. And so, you know, told the Pez dispenser story. But yeah, if you sort of like, there's a lot of these things that like, at first surface value, a thing sounds good, but actually there's a lot of specificity to doing it right. So don't go after big markets, don't hire big fancy executives, don't necessarily hire people because they've worked at big fancy

• 17:48Speaker 01

  companies. There's all these things that sort of at surface level sound good, which, which are actually largely incorrect.

• 17:56Shaan Puri?

  The PayPal story is kind of like this, right? So you have, Elon has his vision for X and he's like, it's gonna do everything a bank does on the internet. It's gonna be, you know, lending, it's gonna be mortgages, it's gonna be checking accounts, savings accounts. And that's what the vision was for that. And then here was PayPal, this little tool for eBay sellers, you know, it's like this kind of the niche within the niche. And he kind of resisted it actually for a little while. And then they finally kind of gave in. It was like, well, that's what the users, that's where the demand is. That's what the users want this for. And like, of course, now PayPal can do a lot more than it did when it started, but it went after that very small market initially, and finally rejected the founder vision idea going in.

• 18:38Speaker 01

  There's always exceptions to the rule. So I never say, you know, definitively, that's the way to do it. But I can tell you in that, every consumer success case that I'm aware of, the pathway looked like that.

• 18:49Sam Parr?

  I'm looking at the March 2020 web archive. I think, how, how into the company are you in March 2020?

• 18:59Speaker 01

  Basically like four months in.

• 19:00Sam Parr?

  Okay, I'm looking at the website on web archive. Looks pretty good. It says, browse fandoms. So I guess that means like different niches of Funkos. So you can look at sports, Star Wars, Rick and Morty. And if you click on it, I'm not sure if it will show you, but it looks like you have sellers on there. You're only four or five months in, but it looks like a lot of sellers, sellers are on there actually. And it even has staff pics, like you guys are curating some cool ones. How many sellers were actually on there? And how did you convince them? And also, feel free to admit if there's any black hat tactics there. There's a statute of limitations. Yeah.

• 19:41Shaan Puri?

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• 20:08Speaker 01

  There's some unique tactics at play. I think by March 2020, we probably did have in the hundreds, or maybe, maybe a thousand sellers at that point. So the way we got things going is so classically with a marketplace, you have a chicken and egg problem. How to get sellers if you don't have buyers, how to get buyers if you don't have sellers. So the way you solve that is you solve for one side of the equation. And so we were initially the seller on whatnot. And so all of the early inventory was us. Now, obviously, we can't own 28,000 Funkos. So what we did is we would go and authenticate them. And by doing that, that gave us additional value to add to the customer.

• 20:52Speaker 01

  And then we would, when someone would purchase them, we'd go and buy it from a number of like 100 different stores online. I have like a team of people in Brazil who would help me hunt down the right Funko Pops.

• 21:02Sam Parr?

  Oh, so they didn't exist then? It was just photos of them? And you're like, but I'll go out and find them and I'll buy them.

• 21:10Speaker 01

  Yeah, I mean, it was, it was a little more, you know, there's a little bit more new to it than that. So one of the things that we did, I don't know, there's like 100,000 Funko Pops out there. It's like an obscene number of Funko Pops. And so you do have to be able to secure them and secure them at a reasonable price and be able to price them at a reasonable price. And so we ended up having to build like a pricing algorithm. We basically scraped all of the sites that had various Funko Pops and then looked at the amount of liquidity in each version of the Funko Pop. And based upon like, we'd sort of set an liquidity floor, because if that thing had like one liquidity, you know, one sold over a 90-day period, you're never going to be able to secure it. I forget what the liquidity floor was now, but let's just say you had to sell 10 over a 30-day period.

• 21:54Speaker 01

  We'd use the past 10 sales plus the amount of liquidity per item to then be able to price it at a reasonable price such that we could then go and resell authenticated and then make sure we could actually secure it from one of the sites.

• 22:12Sam Parr?

  And then did you buy Google Ads for the buyer? Were you buying Google Ads or posting on Reddit or something to get the buyers?

• 22:20Speaker 01

  There's two tactics that we initially used. So tactic number one was we partnered with a bunch of the Funko Pop influencers on YouTube. So, you know, I can remember in December, calling up every Funko Pop influencer and they're like, who is this company? I don't trust you. I found someone that I knew from prior world to work with, and that was sort of the starting place. So that was tactic number one. Then tactic number two was we built this sort of viral Funko Pop giveaway mechanic in the app. So if you're into collecting anything, the thing that you most want to collect are like the Grails or the Chases. So if you're into sports card, maybe, maybe that's, you know, Rookie, Topps Chrome, LeBron.

• 23:03Speaker 01

  If you're into Funko, maybe that's like the Tony the Tiger Flock Funko Pop. And what we would do is once a week, we'd give away like a $500, a $1,000 Funko Pop. And in order to be able to enter, you would have to share. And, and we sort of built these mechanics where you could sort of have like unlimited sharing. So someone could sign up with your referral link, someone could sign up with your code, you could share it on Twitter, you could share it on Instagram. And each time someone used your link or your code, they would get an extra ticket in the raffle. So it gave this like, it sort of encouraged everyone who wanted to win it to share it with everyone that they knew and keep on sharing it.

• 23:46Sam Parr?

  Right.

• 23:46Speaker 01

  And so we basically took over all the Funko Pop subreddits, Facebook groups, et cetera, because we were giving away the best stuff.

• 23:57Sam Parr?

  This is basically stuff like, this is gritty internet entrepreneurship stuff that everyone, Sean and me, everyone listening who has an internet business, everyone has done something where it's like, ah, we're just gonna like do this and do this. And maybe I won't want to tell everyone like 10 years looking back. So it's really cool to see that that was only six years ago. Now you're worth $20 billion.

• 24:18Shaan Puri?

  It even extends, we had Mike Posner, the music artist who did I Took a Pill and a Visa on. And he's, you know, I think a lot of people didn't even listen to the episode because it's like, oh, it's like a musical artist on our business show. But he had this amazing story that was just like any other entrepreneur, where he was in college when he was trying to be an artist. So he realized he could post onto, he wanted to be on the top of the charts of iTunes, but that's where like, you know, Jay-Z and Rihanna, whoever were at the top. He realized iTunes had a iTunes U section for like college lectures. So he's a student, so he called the guy, he hustled to find the guy who like controls that board. He's like, I'm a student, can I upload audio to that? And he became the number one on iTunes U. Then he emailed all these campuses being like, I'm number one on iTunes, parentheses, U.

• 25:02Shaan Puri?

  You know, people didn't realize the distinction. He got booked for, for gigs. And then he had all his friends at other colleges and fraternities. He was in a fraternity, so he said, great, everyone in this same fraternity and every college, on this day, change your profile picture to this picture, just to create some mystery, like what is that? And then people went and hunted down that, oh, it's about this album release. And that was the start of his music career. He growth hacked his way to success there too. And I love these stories. As a founder, like, you know, the front door is not the, not always the only way in.

• 25:33Speaker 01

  Yeah, my, my theory has always been the same, which is if you try and copy the obvious pathways, you're basically going to get stonewalled because you don't have the resources. In the early days, everyone wants to spend a ton of money on paid ads. You know, we spent virtually no money on paid ads in the early days. It was never going to be an effective acquisition channel for us. We spend an obscene amount of money on paid ads today.

• 25:56Shaan Puri?

  Yeah.

• 25:57Speaker 01

  But you have to get your way there. And in each step of the way, you know, sort of unlocks new and interesting things. But I do think in the early days, you have to find unique advantages that other people aren't going to be able to leverage.

• 26:08Shaan Puri?

  Do you remember when you first started doing the Grails giveaway? Cause you know, some part of you's got to be nervous. You're giving away things that are worth thousands of dollars. Did it work right away? Did it take, you know, a few tries? I guess, do you remember the math? The first time it worked, where you're like, holy shit, we just, this is like 10 cents a user or whatever, you know, like, can you take us back?

• 26:26Speaker 01

  Yeah, I do remember the first, the first one was definitely a flop. So we avoided this like $500 item. And I think 104 people, there were 104 entries total in the raffle. You know, maybe that's like 30 or 40 accounts or something like that, and no one purchased anything. So like, uh-oh. And we didn't, we had like, you know, no money for the business back then. It was like all coming out of my bank account. So like, oh, this is painful and I'm not working. So like, you know, the bank account's dwindling at that point. Yeah, I think there's, there's always just a sweet spot between when do you know a thing's actually, when have you proven a thing wrong that it's not going to work? And when have you given it enough legs to make it work? And so for us, it was like, okay, well, now we have all those accounts who joined and we can send a push notification.

• 27:11Speaker 01

  And when we do the next one, and then the next one, they're going to be encouraged to share out to more people. And so if we can see that in the next one, we can go from like 100 to 300, maybe there's a pathway there. And so I think, I forget what the, the second one is, 250 sort of rings to mind. So maybe it wasn't exactly 3X, but it was 2.5X. And so you started to get this like exponential on it, and then you can sort of make the math work.

• 27:34Sam Parr?

  Was the number of sellers like the metric where you're like, we need more sellers, more sellers, more sellers?

• 27:38Speaker 01

  Well, back then, it was just us as the seller. And what we were trying to do is we were trying to build the buyer base because we couldn't add any seller other than us because no one was going to purchase anything from any of the new sellers and they weren't going to stick around. And so the early days were about, was about getting enough demand on the platform such that we could open up selling. And so I think we, you know, we, we launched the platform, I think December 2019 was when we launched our app. And then we didn't open it up to our first seller until I think towards the end of February was when we started to have enough demand in the marketplace.

• 28:17Speaker 01

  And even then, we, we did another hack, which was anytime a seller would come on, whatnot, they'd get our audience. And then we figured out a way to cross-list it across other marketplaces using our whatnot account.

• 28:31Shaan Puri?

  Gotcha.

• 28:31Speaker 01

  And so.

• 28:32Sam Parr?

  Which is like another classic thing, right? That's what Airbnb did. That's what a lot of people did. That's what I did when I had a miniature marketplace. You post on Craigslist.

• 28:39Speaker 01

  Yeah. And so between our demand plus the demand for other marketplaces, we got to a place where we were able to retain sellers and then slowly get that flywheel spinning.

• 28:48Shaan Puri?

  And it probably didn't take a lot. It's probably like, if you just get a sale within the first X hours or days, you'll stick around. Is it, did you find some metric like that?

• 28:57Speaker 01

  I think our data was too sparse and we were just like, I don't know, let's just try and get them as many sales as we can so that people stick around. It took us a long time to get the precision around the metrics that mattered and retained and kept people coming back. We definitely weren't that sophisticated back then.

• 29:12Sam Parr?

  How many transactions happened in the first 12 months? And did that account for any meaningful revenue to you guys at all?

• 29:21Speaker 01

  So sort of the, the journey for us was December 2019, we started it. And I bet you we did 30 sales. You know, like pretty, pretty grim numbers.

• 29:36Sam Parr?

  30 in the first month?

• 29:37Speaker 01

  30, 30 sales, yeah.

• 29:38Sam Parr?

  That's pretty exciting, one a day. That's exciting.

• 29:40Speaker 01

  Yeah, but so most, so the way it actually went was the first, first week of December, which was the first time we were all full time on what was like one sale. And the second week of December was one sale. And then I managed to like work with a Funko Pop influencer, the third week of December, and then we got like 30 sales, something like that. And a bunch of them, we priced incorrectly. So there's like a bunch of the sales were people finding mispricings in our algorithm and taking us to cleaners.

• 30:06Shaan Puri?

  The bounty hunter.

• 30:08Speaker 01

  Yeah, it was like selling a $500 Funko Pop for 150 bucks because the liquidity bit of the equation wasn't very good. So that was, that was December. And then we, in July of 2020 is when we launched our first version of Alive. And, and that's when the business really started.

• 30:29Shaan Puri?

  Where did that insight come from? Cause it sounds like the insight for Funko came from looking at data and trends on eBay. Where do they, the second big insight, which was live selling, where'd that come from?

• 30:39Speaker 01

  So.

• 30:41Speaker 01

  We, when we first started the business in January, went through Y Combinator. So we initially, originally we were in LA and went up to San Francisco to go to Y Combinator. And we thought we were doing well, the business was growing, et cetera. And then we went to fundraise in the middle of COVID as a Funko Pop marketplace. And like, everyone hated our business.

• 31:01Shaan Puri?

  By the way, why did YC bet on you? Like, god damn, YC's good that they bet on you guys when nobody else would. One month into a Funko Pop marketplace. What the hell did they see?

• 31:11Speaker 01

  They were, they were very smart, to be honest.

• 31:15Speaker 01

  And they bet on us many times throughout our journey. Like, when the business started to take off, they were like tremendously helpful and helped put in more money into the business. Ahead of when many of the other investors, who you would know their names, were passing. The thing we were really good at and are, are still pretty good at is we're, we have pretty good taste. And we know how to execute. And so if ever we said we were gonna do a thing, we did the thing.

• 31:43Shaan Puri?

  But that first YC interview is 15 minutes. What could you have shown them in that first 15 minutes?

• 31:47Speaker 01

  I don't know, they just flip a coin. You know, we, we, we, we, we had pretty good backgrounds relative to like what we were doing.

• 31:54Sam Parr?

  I see. Wait, that's a funny line. We had good backgrounds relative, meaning like, there's no way someone this smart is working on something so silly. Surely that's a sign.

• 32:04Speaker 01

  Uh, well, I guess like Logan, um, was like running, or running engineering at like pretty large resale marketplaces. I worked at Facebook, I worked at YouTube. So like, you know, we, I'd started a company before, got Aqua hired. We weren't like hugely known commodities, but clearly had a background for doing things. We built our product for the YC interview in like a week. Like, we built it and launched it and pushed it live. So that we had something and could like talk about real stuff that we had done. So yeah, we just went all in.

• 32:39Shaan Puri?

  You wanna hear, read my, uh, hear my notes from, that I, I just found my, my notes from when I talked to Grant and I was looking at investing. Uh, by the way, this is my, this is my personal notes. So don't, don't, uh, don't insult, I go, looks like a soccer dad. Quiet intensity, humble confidence. He seems like a serious person who's actually doing this. I don't know, those are my, those are my things that I wrote. Love the ending, I wrote winner energy, we should invest.

• 33:08Speaker 01

  Soccer dad, huh?

• 33:10Shaan Puri?

  He only heard one thing, I knew he would only hear the one thing.

• 33:13Sam Parr?

  Get him, Grant, don't take that shit.

• 33:15Speaker 01

  I, I, I like that.

• 33:17Sam Parr?

  But dude, here's what's, the reason why I'm being kind of naggy about timelines is because you're describing being like, my bank's dwindling, I'm just trying to make this work. We only got 30 transactions, uh, in the first month. But what's insane is that I think it's something like 20 months later, you raised money at a billion dollar valuation. Is that right?

• 33:42Speaker 01

  That's probably about right, yeah.

• 33:43Sam Parr?

  So like, the rate of, the, the rate of growth is, is astounding here. Do you remember, how much funding did you raise and how many employees did you have at the time?

• 33:53Speaker 01

  So we came out of YC, we raised probably $250,000 out of YC. Maybe a little bit less. It was a bunch of people who knew me and felt bad for me and like, maybe they were like scout checks and some stuff like that. So, uh, you know, I think we had a few hundred thousand dollars in the bank and we were,

• 34:13Speaker 01

  at that point, we, we brought in one more engineer. And then before our seed round, we probably got to like six and a half folks. So March, when we came out of YC, we did probably 20 to 25,000 dollars in sales, total, total transaction volume. Then we did our seed round in, I wanna say like August or September. That was sort of like the business started to inflect when we, we launched live, like growth went to like 100 plus percent month over month. And probably in September, we did 250 to 300,000 in sales.

• 34:49Sam Parr?

  Gross vol, gross volume.

• 34:51Speaker 01

  Yeah, our take's probably like 10% of that. Then, you know, continued to inflect up. By December of 2020, we sort of ended the year at $2.3 million in total sales. And the number of employees in the business would have been, I think about 17 or 18. Then we closed the following year at, um, 168 million.

• 35:24Shaan Puri?

  2 million to 100, 100 million plus.

• 35:26Speaker 01

  163 million. And we would have closed that year at about 100 employees. So 100 employees too. And then, so, um, the following year, we did a billion in sales.

• 35:40Shaan Puri?

  What happened? How did you go from 2 million to 163, 163 to a billion? What happened?

• 35:46Speaker 01

  The core live experience we built is just really fun. And it, and on the seller's side, uh, you know, transformational for business building. And so if you're a seller, what was happening to you was you were very quickly starting on whatnot. And again, it's not for everyone, but for, you know, a lot of the people who invested deeply and, and, and tried to build a really large business. Whatnot was a bigger channel than anything else you had done. And, and that was also a time like this is during COVID. And so you'd have people like, hey, I had a comic book shop and people stopped coming in, now on whatnot. And my comic book shop is doing more sales on whatnot than, than it ever did in a physical brick and mortar shop. I'm closing down my brick and mortar shop.

• 36:32Shaan Puri?

  You had the COVID forces everything online, but then you had the benefit of, if I'm, if I'm selling a niche thing, I'm gonna find more buyers when I use the, the sea of the internet. Versus just whoever's in a five mile radius, 10 mile radius of wherever my shop is. That helped for sure in that first year.

• 36:50Speaker 01

  Yeah, I mean, COVID definitely helped, but you know, our business has continued to do, you know, incredibly well throughout COVID. So I think anyways, the core value was there. And then I think we, we had a really good team. It's like the first 30 people we hired at whatnot are lights out good. And we knew, we figured out how to, like, the big unlock was sort of how to, how do you launch multiple categories? And what is the mechanism for doing that fast? And as you start to launch multiple categories on marketplace, people in each one of those categories start to cross pollinate. And everything that you had working in one category sort of compounds across all the categories.

• 37:28Sam Parr?

  What did you have to change about your personality to grow? Because you went from being a very scrappy guy doing everything, to being the CEO of a company that's worth a billion plus dollars. What had to, that you've just compressed a lot of personal growth in a very short amount of time, I'd imagine.

• 37:49Speaker 01

  I, I think probably people over emphasize the like, um, I need to change because I'm a leader of a large organization. Because I think they look at certain models of what success looks like at really large companies. And those are sort of like stoic, slightly stilted people who operate in a corporate manner. And, you know, there are, there are definitely things that you have to learn and adjust as you go. But I would say, I actually just generally try and be me. And, you know, the nuances to that, of course, though, are, and by the way, I had to learn this. I, I thought I would have to change more. Like, I think one of, one of the mistakes we made early on in the business was just trying to be, you know,

• 38:29Speaker 01

  too corporate, for lack of a better word, which is like hire some executives from well-known companies, hire people from well-known companies. And it's sort of like one of those things where the story sounds good, but the reality is, is often, um, you know, a lot different. Cause you, you'd sort of go like, oh, you ran such and such at this big company, you must know what you're doing. And that's actually, turns out to be like broadly incorrect. Like, no, someone needs to know and be able to sort of articulate in specific detail what, what they're doing and how they're doing it. So one of, one of the biggest lesson that I've learned through the, the history of, of whatnot is to just be really maniacally focused on what the problems and opportunities are.

• 39:11Speaker 01

  And don't let anyone necessarily tell me what the right pathway is into those problems because running whatnot, I, I tend to have a much, and my team has a much better grasp of what the nuance and context around those things is. And so be focused on what we're trying to achieve. And then be really, really nimble around how to achieve it as long as we know the details around it. Okay, now back to your question, what did I have to learn and change? So one was actually not to change too much, because actually we're pretty good at what we do. There's a, you know, again, we got really lucky, but you know, there's also a reason we were able to take advantage of the luck. Then the things that I had to personally adjust is, you know, the company's 1,400 people today, as an example. And you do need really good systems and process to run a company at the scale.

• 39:55Speaker 01

  And so you have to learn how to like, you know, one of the products you end up building is, you know, I call it my operating system. How do I run the company to make sure that we're moving in the right direction? We're making good decisions and we're executing at really fast pace. So I had to learn how to like construct an operating rhythm across the business. There were certain points in time in the business where the accountability wasn't high enough. Growth drifted, people's focus drifted, and we had to like fix that. We're a pretty straightforward group of people. Um, we always have been, like, if you went into the early slack of whatnot, when someone did bad work, we'd be like, you did bad work, this is bad, let's fix it. And as you get bigger, the, you know, 40 people at whatnot, there's a bunch of people who sort of like know me as like

• 40:39Speaker 01

  the person on Zoom, they've seen in like a, a, a team meeting and like a, a title that would scare people. And so I've had to soften my approach to try and get the best out of people. And again, because I, we always wanna get the best out of people, you wanna get the best work. You know, what would have worked in the early days, be like, yo, this sucks. We gotta do better. Someone might cry today if I do that and we don't want anyone to cry. Um, and so you, you just sort of have to like know how to flex a little. Again, you don't wanna be dishonest and you don't wanna be like this fake person, but you have to know how to flex to get the best out of people. I think those are probably my, my biggest things is just like be maniacally focused on the problem.

• 41:16Speaker 01

  Be, be conscious of the context and around how other people are going to view things and, and adjust that to make sure you're getting the best out of people in the company. There's so much corporate gobbledygook from people.

• 41:32Speaker 01

  I think most of it's bullshit and it's all about like, what's your problem? How do you solve your problem? How do you do it the best way?

• 41:37Sam Parr?

  You, you, we've kind of coined this term. We call it like aw shucks success. Like if you read Warren Buffett's book, you learn that even though he has this attitude that he, this image that he's like, oh, I just, you know, I just hold forever and I just buy good companies. And you're like, oh, anyone can do it. And then you read about them and you're like, oh, well, you were a math prodigy at a very young age and you've been like, you're just super high IQ and patient and you have this beautiful temperament. With you, you have that same thing where you sort of are like, you kind of have this Canadian Midwestern energy where you're like, you know, we're just, I think we just made decent decisions and we got a little bit lucky. And then, but the reality is, is that there's like personality traits or something underneath

• 42:20Sam Parr?

  there that is like world class and it's very clear you have that. What would you say your reports would say or investors would say? This guy's a world class at blank.

• 42:29Speaker 01

  I think one of the, coming back to like my distaste in stories, one of the, one of the faults in human behavior is people tend to follow stories and they tend to follow other human beings. One of the things that I consider myself lucky with is I've, I've obviously learned of Shrein, it's been over six and a half years, but I, I was put in this situation and there will be plenty of other people, if they were put in the right set of situations, would be able to learn. So that's, you know, the luck element. The things that I, I think we're, we're pretty good at are getting to the root. So when you're like, what is actually happening here and how do we know? So seeking the truth maybe is, is a, as a simple form. And so one of the things that always breaks at whatnot is our discovery systems.

• 43:10Speaker 01

  As the company grows and grows and grows, you get more and more supply and you're balancing all sorts of like competing objectives. You gotta make comic books succeed and you gotta make women's fashion succeed and you gotta make fresh food succeed and you gotta make the UK succeed. And we have this feed that recommends people all of these things. And our discovery team is very studious. They'll go really deep in the data, the A B test, a bunch of things. I'll see something, a metric go down the business and I'm like, this looks like a discovery problem. I've seen this before. I'll talk to the team, team like, no, we tested it. We know exactly what's happening. I'm like, now, how do you know exactly what's happening? Walk me through every little thing in the system. So what's happening to this seller? Have you gone and looked at every individual seller? How impressions have changed for that seller? How that's happened across category?

• 43:55Speaker 01

  How it's happened across country? How many lost this much in impressions? How many gained this many? Because, just because the A B test as an example, so A B tests are notoriously bad on network systems. So if you like A B test a thing, you change the feed, um, which means you change what users see. And then people all of a sudden start to go in different streams. Now, as they start to go into different streams, the sellers will behave in different ways, which means you pollute both sides of your A B test as an example. You know, there's a example where we start going through all this and, you know, we, we sort of get to the bottom, we dissect every bit of, bit of seller behavior and like, okay, well, you know, maybe these sellers, their discovery changed a little bit, but these ones increased and increased engagement.

• 44:37Speaker 01

  I'm like, well, I'm looking at the metrics, the metrics say everything went down on a macro level, even if it's not in your A B test. How do you actually know that? Then we plot the elasticity curves of those sellers. We actually see that there are certain parts of the platform where if you, um, even if you improve buyer engagement, if you take away certain impressions from certain sellers, their businesses shrink more than the engagement draw increases it. And so you have to look at these things on much larger time horizons and in different ways. And so, you know, the, a classic way someone would approach that problem, particularly like a lot of the ranking companies are like social media companies that look at near-term engagement. And you go, okay, of course you're right. You've done this before. You've worked at Facebook and Google and wherever. And I would go like, I don't think, how do you actually know that? Everything's a little bit different.

• 45:21Speaker 01

  Let's go all the way to the bottom. And then we unearth like an incredible insight that will shape our discovery systems for the future. So that would be like the example of like, just going immensely deep into the problem.

• 45:32Shaan Puri?

  I love how like two minutes ago, you were like, business is not that complicated. And then you're like, so we had, you know, our sellers in our fresh food department. So we plotted the elasticity curve, you know, it's like, yeah, yeah, yeah, super simple. We do the same thing. Yeah, it's great.

• 45:47Sam Parr?

  You sort of answered the question in a way where your answer is probably true. You are world class at that, but the real answer is the way that you answered it. You're just, I think you are very smart and more so your rate of learning seems very, very, very high.

• 46:01Speaker 01

  Yeah, look, you, you do have to learn fast, but even, even what I just described to you, if you whittle it down to simple components, all elasticity curves is, is like, what happens to a seller when you increase their viewership and then you decrease their viewership? How much does their business grow or shrink? And that's like, you know, if you're, if you're running a platform where you have a feed and you're sort of directing traffic around things, it's probably a thing you should know. And it's, it's, it sounds more complicated, you use the elasticity, but actually like, how much do businesses grow and shrink subject to the number of buyers that you throw in there, put in their feed? One of the things that tends to happen, you know, we hire all these smart people that intact, there's all these like smart people. They went to like all these fancy schools and what have you. And they like to be smart. They like to sound smart, so they use big words and, and the big words will just like

• 46:46Speaker 01

  obscure a bunch of things. And so off, my job oftentimes is to try and get to like the simple sets of truth around things. What is the simple sets of things? What do we know and how do we know it? And so if you start to use a bunch of fancy words, I'm going to make you explain it to you like I'm in, you know, uh, in middle school. And if you can't explain it to me like I'm in middle school, you probably actually don't know what you're talking about and I just will keep going and going and going and going and going until it can be explained.

• 47:09Shaan Puri?

  Uh, I love that. I, when I, so we got acquired by Twitch and I got to be at Twitch for a couple, yeah, two years. And, uh, you know, I didn't, I probably learned, uh, many things, some things not to do in the company, some things, you know, to do. But one of the most important to do's was Emmett was like this. He would sit in these meetings and something, you know, a team would come in and they would say something and he would ask them this, well, what do you mean? How do we know that? What does that mean? So no, what, what exactly did we do? Why, why do we think that that was the right thing to do? Very simple questions, questions that, you know, uh, at a second grade reading level. And then the answer would come back at a PhD level and he would bring them back down. No, no, no, hold on, hold on, hold on. Let's walk me through this. And then by the, you know, within 15 minutes, they've sort of been undressed.

• 47:52Shaan Puri?

  You could realize they don't know, they themselves don't know what the hell they're talking about. They weren't trying to mislead. They just didn't really themselves get to the root of it. Um, and everybody was taking things at face value and it was leading to bad decisions. I loved it. I was like, this is amazing. This is like, this is finally like, you know, the, the best work is happening in those sessions. Most people in the company hated it and they used to give them feedback all the time that this sort of Socratic method of, of sort of debating almost like semantics and getting down to like the, the base level of things, like talking in binary, basically.

• 48:23Sam Parr?

  Dude, I do that with my wife. I'm like, were you thinking of me when you made this meal? Because you know, I don't like zucchini.

• 48:30Shaan Puri?

  No, I just want to know.

• 48:34Shaan Puri?

  But anyways, I loved it and I, it almost gave me, I like that you said it here because when I saw him doing that, and in a way gave me permission that like, I didn't really fully do before that, meaning A, I didn't want to be a jerk, but B, I didn't want to be an idiot. I hired all these smart people. They're telling me things that sound smart. Maybe I shouldn't get caught up trying to like, get to, you know, base level understanding of this myself. And what I realized was, no, no, no, that was actually a very good value, uh, virtue to have inside of a company. And when people knew that, they showed up very differently to every meeting after the first few times that it happens.

• 49:10Speaker 01

  Yeah, I think, um, one of the, one of the things that we've tried to do here is we try really hard for the culture to be about getting to the right answer. And so if we find people sort of recoil from that, we'll give them feedback. And when I hire executives, they, I will let them know upfront, they're not beyond reproach. Their, their methods are at best sort of neutral when they come in. And so we've, we've sort of built this team now who likes that way of working, who's given permission to work and seek the truth and go to the bottom. And I think that's been, I think if you don't have probably both of those, it doesn't work.

• 49:53Speaker 01

  Well, now that is a challenge of, we're hiring, I don't, we have like 500 people this year or something, you know, keeping up with that. But if you look at like my team of people, my team, I've been working with most of my team for four plus years now. And then most of their teams are pretty similar. And so you get like a really nice, no, this is how we do things here. This isn't meant to be me and this isn't meant to like, understand the truth. Cause it's quite unnatural to be challenged at that level of detail.

• 50:19Sam Parr?

  Hey, can I ask you about the challenge? Because I, there's two phrases and words that I really dislike. One is first principles and two is contrarian. Because typically the people who talk about that stuff are either kind of dumb or they're smart, but they're an asshole when they deliver it. You seem smart and you seem like a pretty kind, likable guy. Was there a person or a book or something that inspired you to be disagreeable, but not rude? Because it's quite challenging.

• 50:51Speaker 01

  I think for, for me, what I always try to do is imagine myself in someone else's shoes. And imagine when I had certain stuff like this, you know, happen to me. And what would enable me to do my best work? And I'm not saying I'm perfect at this. There are definitely times where I am not as nice and where I will, you know, you know, sort of be at the end of my, my level of patience. I, I try to make it few and far between, but it happens. One of the examples that sticks with me for a lot, for a while is, and it's actually one of the reasons I ended up leaving Facebook. I was in, uh, this big product review with a bunch of very well-known and very senior people.

• 51:35Speaker 01

  And there was, the thing I was bringing to a product review was, was a project that I unfortunately got stuck on, I did not want to work on. And it was one of the most politicized projects across the entire business.

• 51:49Speaker 01

  And you know, I put together this thing and I spent boatloads of time because all these freaking VPs would never agree with anyone. It was just me running in circles like this. And you get to the review and the guy who's running the review basically just starts yelling at everyone.

• 52:05Speaker 01

  And I'm like, you know what? I've been up the past couple of weeks till past midnight. And I worked like hell on this. And no matter who you gave this thing to, it was going to be a absolute cluster. You know, now running my own large organization, I see what he did wrong. I know what I would do differently. But the way that was handled was never going to make me want to do more great work. And so I basically, at the end of that, I was like, I'm out of here. I'm not dealing with this. And, and so I just think about ultimately what you want to do is you want to get good work out of your organization. And being mean, nasty, or combative will almost never do it.

• 52:41Sam Parr?

  I know that you don't, uh, you kind of said you don't like talking about numbers because you're like, there's still a lot to do. But of all the people who have done business, which is like billions of people, there's probably only like three or four or 500 who are worth over a billion dollars below the age of 40 and you're one of them. I think according to Forbes, you're worth like two or three billion dollars. Surely there's been a moment where you're like, this is pretty awesome. Have you had a moment like that?

• 53:08Speaker 01

  From, from, from time to time, it's, it's nice to, to reap some of the rewards of what's been built. You know, it's really nice to be able to take care of my family and take care of my family properly. And yeah, look, I'm, it's, it's not lost on me that, that like in six and a half years, we've been able to build something, you know, pretty massive. Millions of people build businesses or hundreds of thousands of people build businesses on whatnot, making billions of dollars. You know, 1400 people at whatnot, a lot of people have been there for the entire journey. Um, yeah, you know, it feels good, but also I think we still have a lot that we want to do. And, and again, I, I sort of, you know, you get a little, I, I don't want to get complacent. And so from time to time, I'll have a, you know, I'll reflect for about five minutes and be like, wow, this is pretty insane.

• 53:52Speaker 01

  But then, you know, I'm, I'm in my 30s still. There's 1400 people who came to work at whatnot that I have high accountability for. Raised a billion and a half dollars from investors who we have high accountability for. And so, um, you know, it doesn't do me any good patting myself on the back. That doesn't get me to the next step.

• 54:11Shaan Puri?

  Sam, I'm going to start saying that I take care of my family. I take care of my family properly. I'll let you figure out what properly means. I'm just going to start using that ever. I, I, I enjoyed that one. That was good. You said, you had a good quote. You said, if you think you're moving fast, you're probably not. What do you mean by that?

• 54:28Speaker 01

  Yeah, almost everyone who says they're moving fast is moving slow, if I'm being honest. If you have to talk about it, you're moving too, you're moving too slow. If you even have time to think about it, you're moving too slow. And frankly, you can always move faster.

• 54:39Shaan Puri?

  Right. Today's podcast is brought to you by my friends at Mercury. Uh, they make the world's best banking product. I think you know this already. I use Mercury for all of my businesses. I think I have like maybe seven or eight businesses. We use Mercury as our business banking across all of them. And now they actually just launched a personal banking account. So I have my personal account there. I moved off of Wells Fargo and Chase. I'm just all in on Mercury. Why? Uh, I like products that are easy to use. I like products that get me and the problems that I have. So like very easy to make a joint account with my wife. Very easy to spin up virtual cards. Uh, one click and I get savings yield. It just has all the stuff that I need in one place. So if you're looking for the best banking product on the market, it's definitely Mercury. I will fist fight anybody who disagrees with me on that. Go to mercury.com slash personal and learn more.

• 55:23Shaan Puri?

  Mercury is a fintech, not an FDIC insured bank. Banking services are provided through Choice Financial Group and Callum N A, members FDIC. Hey, what's the weirdest trend of a thing that's, that people are buying and selling on whatnot that you know, an average person wouldn't even, wouldn't even realize there's a craze going on or a behavior that you've seen on there?

• 55:44Speaker 01

  Yeah. I mean, probably the most popular thing this year that other parents probably know about it is like Neatos and squishy toys. I don't know if you guys have younger kids, you know, you brought up some of the other ones that I think are really fun, like just people selling crab and meat.

• 55:57Sam Parr?

  I think there's like people selling gold bars, aren't there? Like miners selling bars?

• 56:02Speaker 01

  Yeah, bars of silver, bars of gold. Um,

• 56:06Shaan Puri?

  Like who, like from the mine? Like who, what's happening?

• 56:10Speaker 01

  I mean, you know, huge range, um, could be anywhere from like a coin shop to, you know, there are, there are like mints that like mint coins and gold.

• 56:21Shaan Puri?

  Cutting out the middleman and just selling direct on whatnot? Is that the kind of the idea?

• 56:26Speaker 01

  Uh, yeah, some, some of them are.

• 56:29Shaan Puri?

  Do you think there's an opportunity like, you know, with Twitch, for example, people built Stream Labs, they built other like tools and, and companies on top to service the ecosystem that you weren't, that the platform wasn't going to build? What do you think is, is a kind of good tool or business that somebody could be doing on top of the, the growth of whatnot?

• 56:46Speaker 01

  Yeah. I mean, I think so. So stepping back like a macro level, I think you're going to see over the next decade that live commerce will be 30 plus percent of all e-commerce. It means this is just like an absolutely enormous market.

• 56:57Shaan Puri?

  What is it today?

• 56:58Speaker 01

  When you take the top three biggest players in the market across like US and Europe, you're probably around 30 billion, something, something like that.

• 57:07Shaan Puri?

  Sorry, but just to show the, the percent, you said it's going to be 30%. That means it's current, it was currently at what? Like how much room do you think there is?

• 57:14Speaker 01

  Single, single digit percentages.

• 57:15Shaan Puri?

  Okay. So it's going to 5X from here at least.

• 57:18Speaker 01

  I think 20, 30, 30X plus.

• 57:22Shaan Puri?

  Okay.

• 57:22Speaker 01

  And the comp is sort of like what's happened in China and Asia. So in Asia, it's in China, it's about 40% of e-commerce. And, and if you looked at, you know, the growth of whatnot, the engagement of the platform, sort of looked like it said that, towards that direction. And so, you know, that's, that's a market in the hundreds and hundreds, if not, you know, a trillion dollars into the future, if you go outside of China. And so there's just going to be, there will be a ton of opportunity. So the biggest live shopping businesses are going to, like the people who are selling are going to do a billion dollars plus in revenue. Like our, our biggest seller probably does a couple of hundred million.

• 57:56Sam Parr?

  You say your biggest seller is doing nine figures?

• 58:00Speaker 01

  Well, well over, yeah. Many, multiple nine figure sellers.

• 58:05Shaan Puri?

  Selling what?

• 58:07Speaker 01

  Collectibles, you know, we have brands doing tens of million, a hundred million in fashion.

• 58:12Shaan Puri?

  But are these like, um, these are not individuals, these are just like large companies? What is, what's going on? Like, I guess, give us a hero's story.

• 58:20Speaker 01

  The best, it's probably like the, the biggest are people who probably started as like individuals or maybe like two or three on whatnot and just took advantage and grew it. So like the operation, the biggest operation that I can think of started initially as like three or four, three or four people. It's now probably 150 to 200 people, almost completely built on whatnot. And they're just like really savvy business people who sort of jumped on the, the live, um, shopping train. Um, and build a really large business. And so if you, you know, if you sort of imagine a future where there's five, you know, three, four hundred billion dollars in sales in the US off of live, there's going to be an immense number of, of really large businesses built.

• 59:01Speaker 01

  And like the biggest sellers in, in China will do a billion dollars plus a year as, as just like an example. Then there's, there's a bunch of peripheral services around there. So one of the things we're starting to see is like wholesale marketplaces directly supply, supplying our sellers is a really big opportunity because they need a lot of inventory. I've, I've definitely seen a couple of wholesale marketplaces get pretty substantial fundraises. And, uh, I know a huge chunk of that growth is off the back of whatnot, as an example. So I think there's, there's a lot of opportunity around helping these people source really great supply. And then you're sort of starting to see what they call MCNs around this stuff. So

• 59:46Speaker 01

  multi-channel networks, which is a bunch of people who specialize in helping people run their, their live shopping businesses. So I think all three of those will, will probably see a proliferation over the next decade.

• 59:58Sam Parr?

  This is nuts. You're just a killer. I, I didn't realize. I knew what whatnot was. I've, I've used it. I did not, I guess I, I saw the numbers, but it's kind of like now that I see what you're saying, I'm like, this is insane. This is so much, like originally when Sean first told me about this, I had the reaction, I imagine a lot of people did, which is like, this is silly. This is small. This, this is nothing. Uh, like a, like a multi tens of billions of dollar company, but this is insane. And I understand why you have helped lead it there.

• 1:00:28Shaan Puri?

  Sam, you should start, you should start, start your denim shop on whatnot.

• 1:00:32Sam Parr?

  Yeah, I buy, um, I buy a ton of, I'm an eBay power user. I buy a ton of, uh, I collect old denim. It's very weird. But, uh, I guess I got to start using whatnot.

• 1:00:43Speaker 01

  That's a, that's a popular, popular, uh, segment.

• 1:00:46Sam Parr?

  Do you have any hobbies? Do you, do you like any weird stuff? Now that you see all these other weird things that people buy and sell? Do you have any, uh, interesting hobbies?

• 1:00:53Speaker 01

  I still collect things, but you know, nothing like obscene. I've sort of been collecting type one photos, which are like original photographs. Um, that's probably the one thing I've been purchasing most recently. And then other than that, my hobbies are, are pretty, pretty tame. I'm Canadian, so I still play hockey.

• 1:01:10Sam Parr?

  Sean, you had a good read on him, man.

• 1:01:13Shaan Puri?

  Winner energy. I told you.

• 1:01:14Sam Parr?

  Winner energy. Wow.

• 1:01:16Shaan Puri?

  Thanks for coming on, man. This is fun.

• 1:01:18Speaker 01

  Yeah. Thank you guys for having me. It was a really fun conversation. You guys made it, made it super fun.

• 1:01:22Sam Parr?

  Well, thank you. We appreciate you. That's it. That's the pod.

• 1:01:35Shaan Puri?

  All right. Let's take a quick break. I want to tell you about marketing school. It is a podcast that is part of the HubSpot Podcast Network. And it is run by Neil Patel and Eric Su. And these guys are both marketers who are running businesses. And so if you want real world tactics from practitioners who are actually out there in the field doing it, this is the podcast for you. Check it out wherever you get your podcasts.