How Whatnot's Live Shopping Beats Traditional E-Commerce

1. 0:00 – 1:06

   Intro

   1. GLGrant LaFontaine0:00

      If you look at e-commerce today, you have to know exactly what you're looking for.

   2. DGDavid George0:04

      Live commerce is over a third of all commerce in Asia. Is that right?

   3. GLGrant LaFontaine0:08

      30 to 40% of all commerce is live commerce in China.

   4. DGDavid George0:11

      What is it in the US today?

   5. GLGrant LaFontaine0:13

      Single digits really. The experience was really broken. Transactions weren't integrated well, shipping wasn't, payments, discovery, CX, and we just thought we could build a better one of those.

   6. DGDavid George0:22

      I wanna start all the way back when you were a kid. Your first online sale was a holographic Pokemon card.

   7. GLGrant LaFontaine0:30

      At that point in time was when like eBay was getting started and I was like, "Wait, you can make money from Pokemon cards? Like I love Pokemon cards and I can make money from doing it?" The first one sold for 10 bucks. That's probably the true origin stories of Whatnot.

   8. DGDavid George0:43

      Users spend 95 minutes a day on the platform?

   9. GLGrant LaFontaine0:46

      Yeah, about 95 minutes.

   10. DGDavid George0:47

       It's incredible.

   11. GLGrant LaFontaine0:48

       Users don't give a [censored] about the market. They care about whether they're gonna enjoy the thing, it provides value, and that's the experience that makes it fun and keeps you coming back.

   12. DGDavid George0:56

       What are the most exciting things that you're building towards that you wanna grow into over the coming 12 months?

   13. GLGrant LaFontaine1:02

       Yeah, I mean...

2. 1:06 – 3:49

   The Holographic Pokemon Card That Started It All

   1. DGDavid George1:06

      Okay. I wanna start all the way back when you were a kid. So I understand that your first online sale was a holographic Pokemon card, and that the buyer mailed you a money order, and you cashed it at the post office, and then you shipped the card. So this was like a f- what, what age was this? This was like a formative young age?

   2. GLGrant LaFontaine1:29

      I must've been in third or fourth grade-

   3. DGDavid George1:31

      Third or fourth grade

   4. GLGrant LaFontaine1:31

      ... I wanna say. So I don't know. How old are you there? Like seven, eight, nine, something like that.

   5. DGDavid George1:35

      Yeah. Okay. So there's a, there's all these stories, you know, of a founder kind of finding their market like this early. Like, tell me about like you kind of, um, having that experience and making it a formative piece of, you know, starting Whatnot eventually.

   6. GLGrant LaFontaine1:46

      Well, I think like all kids back then, like there was just a Pokemon craze.

   7. DGDavid George1:50

      Yeah. For sure.

   8. GLGrant LaFontaine1:51

      Um, Pokemon cards became big. You know, I'd get my dad to go bring me to the shop, open my Pokemon cards. I had my binder, had all my Charizards in it, had everything, and I'd, you know, down the s- down sort of the, the street from where I was living, there was like a little like lake and hangout area, and my f- me and my friends used to go there and we'd like trade Pokemon cards, and I'd try and hustle people on like getting the better cards. And then at that point in time was when like eBay was getting started and their, their biggest competitor was Yahoo Auctions. And, um, I, I don't know how I found out about it, but I found out about it and I was like, "Wait, you can make money from Pokemon cards? Like I love Pokemon cards and I can make money from doing it?" And so I got my dad to help me set up an account and I, you know, posted my bunch of my holographic cards online. The first one sold for 10 bucks, and it was the, the holographic, um, Chansey card.

   9. DGDavid George2:42

      Chansey. It was the Chansey card. Yeah.

   10. GLGrant LaFontaine2:43

       And the, the thing that I always like, um, feels funny about that is that at that point in time, the internet was so nascent you weren't doing payments online.

   11. DGDavid George2:52

       Yeah.

   12. GLGrant LaFontaine2:52

       Which is just crazy.

   13. DGDavid George2:53

       Yeah. Yeah, it was just like clunky. I mean, yeah, early days like, you know, there was no trust to do it. Uh, the infrastructure didn't exist, but there was no trust either obviously, so.

   14. GLGrant LaFontaine3:01

       Yeah. It's, and it's pr- but it's also pretty wild that like there was enough trust that someone would send you the like money order-

   15. DGDavid George3:09

       Yes

   16. GLGrant LaFontaine3:09

       ... in the mail and sort of like hope you would then send the card back. So like I remember I got the money order and like, "Okay. I can send the card now. Dad, can you bring me to the post office? I'm gonna wrap it up and, and, um, you know, send it off." And, uh, and so that is, that's probably the true origin stories of Whatnot. Whatnot's pretty f-funny in that, uh, almost all of my experience in like life, like the big, the big bits, all of my like core jobs have come full circle in Whatnot.

   17. DGDavid George3:35

       Yeah.

   18. GLGrant LaFontaine3:35

       It was like Pokemon cards, and I worked at YouTube for a long time, and so I did video and then I worked, um, uh, I was, I was working at Facebook and I was working on marketplace stuff, and so I did some of that, and then Whatnot's sort of the amalgamation of all those things.

3. 3:49 – 9:18

   How Grant & Logan Settled on Whatnot (Drunk in a Tokyo Bar)

   1. DGDavid George3:49

      Yeah, the perfect combination of all those trends. Yeah. It's awesome. So, um, there's different stories about how you and Logan decided to start the company. How, how did you guys settle on doing this?

   2. GLGrant LaFontaine3:59

      Yeah. So there's Logan's story and there's my story.

   3. DGDavid George4:01

      Yeah. Okay. Let's, let's hear them.

   4. GLGrant LaFontaine4:02

      And, and, and look, both of, both of them are like actually correct. I, I think Logan's just more, um, nostalgic about like... Logan's story is actually like, I don't know, maybe it's like slightly better. So I was-- Logan's origin stories start in like January 2019, I wanna say. We, we did a trip to Tokyo over the hol- over like New Year's, and we were drinking in a bar and we, both of us had started businesses before, and so like, yeah, a couple drinks. We just started talking about, "Oh, you know, what should we do one day?" And, and then we started talking about, you know, building some marketplace business. We bought like 30 or 40 domains, and then like the trip ended. We got back to the real world and like, you know, sort of nothing happened for six, seven, eight, nine months basically. And s-so that, that's all true. Like we talked about it-

   5. DGDavid George4:54

      Yeah. [laughs]

   6. GLGrant LaFontaine4:54

      ... and like we said we're gonna do it, but then there was like this huge-

   7. DGDavid George4:56

      That wasn't the launch moment. Yeah.

   8. GLGrant LaFontaine4:57

      Yeah. There was this like huge intervening period. And so, um, you know, mine really was sometime around like, um, you know, Oc-October of 2020 or 2019, yeah. Uh, and um, you know, I was like, "Logan, remember how we talked about doing those businesses and we bought those 100 domains when we were drinking in a bar in Tokyo that we never, that we never used? Uh, maybe, maybe now is the time." Logan was like wrapping up his job and, um, you know, I still had mine, but I was like, "You know, I need to go back to, to building some stuff." And we could see a bunch of our friends getting back into collecting. So it was like Funko Pops and comic books and sports cars, and I was like, "You know, I know a little bit about [chuckles] that, that industry." And you know, I'd always dabbled even after, you know, Pokemon cards. I did, um, sne- I got into sneakers for a while, and then I was doing some of the Funko stuff for a while. And so I, I sort of like knew that market and it just like just hasn't changed in a really long time. And like everyone, uh, like us now is, is, is older, is starting to have some disposable income. They grew up on a mobile phone. I think there's something around collectibles and social commerce like You know, if someone's gonna figure it out, may- why not us?

   9. DGDavid George6:13

      Yeah.

   10. GLGrant LaFontaine6:13

       Let's see what we can do.

   11. DGDavid George6:14

       Yeah.

   12. GLGrant LaFontaine6:15

       Uh, and so then December 2019, we both quit our jobs, and then we went full time and launched our authenticated Funko Pop marketplace.

   13. DGDavid George6:25

       This-- So I gotta ask, was Whatnot one of the domains that you had bought?

   14. GLGrant LaFontaine6:29

       Uh, no, that would've been... Can you imagine? Um [both laughing]

   15. DGDavid George6:33

       Pretty good. That would've been amazing foresight.

   16. GLGrant LaFontaine6:35

       So, so okay. The, yeah, it would've been amazing. Actually, so the, the, the origins of Whatnot name, which actually everyone always asks, 'cause like it, Whatnot's like a very, very memorable, good name. We've had it for a very long time.

   17. DGDavid George6:45

       Great name.

   18. GLGrant LaFontaine6:45

       Um, so actually one of the domains we bought, again, think we were drunk in a bar in Tokyo, so it wasn't as if our judgment [chuckles] was immensely good, was like always legit. And I'm not joking, because that was the first domain for Whatnot. And the reason it was the first domain for Whatnot is we're always obsessed with, like, let's just make progress.

   19. DGDavid George7:04

       Yes.

   20. GLGrant LaFontaine7:05

       Let's just do a thing.

   21. DGDavid George7:06

       Yeah.

   22. GLGrant LaFontaine7:06

       It was like, we don't even have a product. We don't have anything. I don't wanna sit here and talk about a branding exercise-

   23. DGDavid George7:12

       Yeah, of course

   24. GLGrant LaFontaine7:12

       ... for days.

   25. DGDavid George7:13

       Just go.

   26. GLGrant LaFontaine7:14

       Let's just go.

   27. DGDavid George7:14

       Yeah.

   28. GLGrant LaFontaine7:15

       And so it was always legit, and then our-- the first designer on Whatnot, this guy John, who I worked with on my, my prior startup, before we were about to launch, he's like, "Look, I cannot be associated with a company called Always Legit. That is a horrific name."

   29. DGDavid George7:29

       [chuckles]

   30. GLGrant LaFontaine7:29

       And it was. I named it, and it was a horrific name, but I was like, "It doesn't matter. We don't have a product. Who cares what it's called if you got nothing?"
4. 9:18 – 12:41

   The State of the Market: Facebook Marketplace, China & QVC

   1. DGDavid George9:18

      great. That's an awesome story. I haven't heard that piece of it before. Um, okay, so at the time that you guys were getting started, in the US, Facebook Marketplace was working, right? In the sense that there was a lot of activity, right? And you could sort of see the network effect behavior at that time. Is that right?

   2. GLGrant LaFontaine9:34

      Yep. Yeah, yeah.

   3. DGDavid George9:34

      And then in China, this had actually started to happen, right? The live shopping trend had become a category. It was early. And then in the US and the Western world, you had, like, QVC. So, like, talk about just the state of the market when you guys were actually starting and what you saw that made you have conviction that this was gonna be a really good idea.

   4. GLGrant LaFontaine9:55

      So I guess the, the state of the market, um, when we started it, so keep in mind, this is sort of December 2019, going in just before COVID. Um, so, so one, I'll preface it with saying we, we probably weren't very sophisticated on the state of the market. Um, we had no idea w- like, live shopping in Asia. We had heard of QVC.

   5. DGDavid George10:15

      Yeah.

   6. GLGrant LaFontaine10:16

      Um, and my impressions of QVC was like, no one wants to shop on QVC. Like, it's like-

   7. DGDavid George10:20

      Yeah

   8. GLGrant LaFontaine10:20

      ... grannies shopping on QVC, so no one my age wants to shop on QVC. Um, and look, there was a bunch of other big marketplaces around. Um, but we sort of, you know... There was a bunch for our market initially, which was collectibles. Uh, you know, there were a bunch of players who were doing it, but it sort of felt like it was a little bit stagnant, like the space hadn't-

   9. DGDavid George10:40

      Yeah

   10. GLGrant LaFontaine10:40

       ... changed in a while. So that was, that was sort of like the state of the market.

   11. DGDavid George10:43

       And, and by the way, I would just say, I think it's probably an asset, not a liability, that you guys didn't know much about the market. Because if you knew a lot about the market, you'd probably try to build what existed in the market, but, like, iterate on it-

   12. GLGrant LaFontaine10:55

       Yeah. I-

   13. DGDavid George10:55

       ... as opposed to a, a new, an entirely new thing.

   14. GLGrant LaFontaine10:59

       Yeah. The, but the... It was a h- 1,000% an advantage.

   15. DGDavid George11:02

       Yes.

   16. GLGrant LaFontaine11:02

       Um, 'cause look, I, I think the, the punchline, and I, I can get into it, is, um, users don't give a shit about the market.

   17. DGDavid George11:10

       Yeah.

   18. GLGrant LaFontaine11:10

       Um, they don't care about the market at all. They care about whether a th- they're gonna enjoy the thing, it provides value.

   19. DGDavid George11:16

       Yeah.

   20. GLGrant LaFontaine11:17

       And so there, there's this, um, counterintuitive thing, which is if you build, try and build a market, it oftentimes distracts from, like, are you building a really great user experience?

   21. DGDavid George11:26

       Yeah.

   22. GLGrant LaFontaine11:26

       'Cause again, like, no one's... A consumer is not making a, going like, "Oh, this is a live shopping market, and you know, I can transact all of these things in this market." And they're going like, "Well, no, what are you, what are you gonna provide for me? What's the value?" And so, um, uh, there were a bunch of players who were trying to do that 'cause they s- sort of saw what was happening in Asia, and it's a, it's a monster market. You know, it's like a trillion-dollar-plus market today. Um, and we were like, "We don't know." Uh, we were building our Funko Pop marketplace, and we were talking to our customers every single day, and then we saw our customers hacking social media in interesting ways, and the way they were s- were trying to hack it by s- was selling, like, um, the f- selling items in live video, but the experience was really broken.

   23. DGDavid George12:02

       Yeah.

   24. GLGrant LaFontaine12:03

       Uh, transactions weren't integrated well, shipping wasn't, payments, discovery, CX. Um, and we just thought we could build a better one of those, and it would solve ... uh, the problems of the customers we had in the platform. Um, Logan locked himself in his room for a few weeks, came out with the first version of the product, and, um, [chuckles] I went live. Sold out, sold a lot of items, and the rest is sort of, you know, history from there.

   25. DGDavid George12:28

       That's incredible. Yeah. Awesome. The-- So it's interesting to think about what you all provide. So I, I think it's a super insightful way to say, like, customers don't give a shit about a market. Like, they want a pro- like, they want a product

5. 12:41 – 21:18

   Entertainment vs Intent: What Whatnot Actually Sells

   1. DGDavid George12:41

      that's compelling to them. Like, what do you, what value do you provide to them? Shopping often starts with intent. So how much of the idea of this is, like, entertainment versus intent? And, like, how do you think about the distribution of the behavior of the buyers and what they're getting out of you?

   2. GLGrant LaFontaine12:58

      Yeah, I think, um, [clears throat] Whatnot's sort of, like, analogous to visiting a store.

   3. DGDavid George13:04

      Yeah.

   4. GLGrant LaFontaine13:04

      Um, which is, I don't know, if I go to the mall or I go to a s- s- set of retail shops, I'm sort of like I, I kind of know I want a thing, but I don't know exactly what that thing is. I'm gonna go walk in that shop.

   5. DGDavid George13:16

      Yeah.

   6. GLGrant LaFontaine13:16

      I'm gonna go and browse around, and so I don't... What have I, what have I bought recently? I bought some, some new shoes, and so I, I went on to go get some new sneakers, and I was like, "Okay, I need some sneakers." I'm gonna type in the website, and I'm gonna go look. I spent 30 minutes browsing. Didn't know what I wanted. I came away on the other side, and that's sort of the Whatnot journey.

   7. DGDavid George13:34

      Yeah.

   8. GLGrant LaFontaine13:34

      Whereas if you look at a lot of the e-commerce, um, companies that have been built in the past, you know, prior to us, you sort of know exactly what you want. It's not really great for discovery. It's not really great for an experiential or having fun or being entertained. Uh, so I think that's, that's sort of the, the analog with Whatnot. Maybe you know you want a thing, but you don't know what that exact thing is. You're gonna come on Whatnot, um, you're gonna look for it, you're gonna have some fun along the way.

   9. DGDavid George13:59

      Yeah. That's awesome. So there's all of those elements embedded in the product. So watching, chatting, bidding, buying, returning. Are there pieces that I'm missing?

   10. GLGrant LaFontaine14:11

       Um-

   11. DGDavid George14:12

       I mean, just generally discovery.

   12. GLGrant LaFontaine14:14

       Yeah. I think, yeah, I think you've covered a lot. I mean, the, the, the one of, one of the reasons why Whatnot has worked so well to date is that there's a lot of value because it's such a-- You can do so many different things. Sometimes you go and look for a great deal. Um, a lot of times you're going to just have an experience and be entertained. So on any given day, most people on Whatnot don't purchase anything. The vast majority of people don't purchase anything on Whatnot. They're just going and they're-

   13. DGDavid George14:41

       Yeah

   14. GLGrant LaFontaine14:41

       ... watching and they're talking with people.

   15. DGDavid George14:43

       Entertainment, yeah.

   16. GLGrant LaFontaine14:43

       Yeah. Um, and so that's, that's why I, I can do-- Like, it's not a perfect analog, but I, I like the sort of analog of, like, going to the shopping mall. Like, you'd go to the shopping mall, hang out with your friend. At least, you know, when I was growing up, hang out with my friends, walk around the mall, have some fun. You know, many times I wouldn't purchase something. You just go there for an experience.

   17. DGDavid George15:01

       I am struck by, obviously we're longtime investors with you, and so, you know, this is, this is not new news to us. But it is striking when I describe it to other people how big the market for this is and how big Whatnot actually is. So, you know, you talked about Asia. Live commerce, I think the latest is it's over a third of all commerce in Asia. Is that right?

   18. GLGrant LaFontaine15:24

       Yeah. I've, I've heard anywhere about 30% to 40% of all commerce is, is live commerce in, in China.

   19. DGDavid George15:29

       Yeah. And then what is, what is it in the US today?

   20. GLGrant LaFontaine15:31

       Oh, I, I mean, sing- single digits, really.

   21. DGDavid George15:34

       Single digits. And do you think there's any-- is there any reason why you don't think that that gap could close over time?

   22. GLGrant LaFontaine15:40

       No, I think it's cl- it's clearly gonna close.

   23. DGDavid George15:42

       Yeah.

   24. GLGrant LaFontaine15:42

       Um, it's just a richer way in which to, to sell and build a business. Um, and it's just more efficient. So, you know, um, if you're a fashion brand or store, you could go and set up a brick-and-mortar shop on, I don't know, pick a famous street.

   25. DGDavid George16:03

       Fifth Avenue, whatever, yeah.

   26. GLGrant LaFontaine16:03

       Fifth, Fifth Avenue. It'll cost you millions of dollars in, in rent, and you're restricted to a set of people who come to your shop at a, you know, 9:00 to 5:00 on, um, whoever's in New York City. Um, and like, that's a great experience. You can feel it. You can talk to people. You can discover things. One, Whatnot, you can set it up for $0, and you can have an entirely global audience that is, you know, unbounded.

   27. DGDavid George16:24

       Yeah.

   28. GLGrant LaFontaine16:24

       And so I think that, that value prop means if you're a business, um, you know, selling consumer goods, uh, I think you're eventually gonna get into live commerce. I don't think you're gonna be able to ignore it. I think you're gonna be able to bring in lots of audience, and that's why you see that 30% or 40% number, uh, in China.

   29. DGDavid George16:42

       Yeah. So it's like the, if you think about just sort of marketplace dynamics and the network effect, the supply side is so compelling because it's zero, it's effectively zero cost. And with a very compelling supply, uh, dynamic, lots of sellers, that, that drives demand.

   30. GLGrant LaFontaine16:59

       Yeah.
6. 21:18 – 29:22

   The Supply Side: Turning Sellers Into Real Businesses

   1. DGDavid George21:18

      I actually am s- I spend a lot of time on there, uh-

   2. GLGrant LaFontaine21:20

      [chuckles]

   3. DGDavid George21:21

      ... entertaining. I transact too, but uh, yeah, I, I get it. That makes sense. Um, okay, so that's like the origin story, like the layout of the market at a high level, and I wanna go into categories and stuff. But I'd love to talk about the supply side, like the sellers on the platform. Talk about the scale that you have of sellers. Um, and you know, this is sort of one of the underrated things. By being a marketplace, you enable all this new business creation or business growth of existing businesses that otherwise would not exist. So I'd love to explore that a little bit.

   4. GLGrant LaFontaine21:55

      Yeah, I mean, I, I think the, one of the most fun things about Whatnot is it's, it's fundamentally empowering small business. And if you look at a lot of what's happened, again, in e-commerce over the past 20 or 30 years, is it, it got so efficient, and one of the ways to make it so efficient is to obscure who you're buying from and obscure the ability for people to like build brands and businesses around it, and Whatnot's sort of the polar opposite. Uh, if you're on Whatnot, you're gonna have your store, you're gonna have your brand, you're gonna have your customers that are gonna come back to you. And so, you know, I think that's one of the, one of the best bits of the platform is, you know, we're generating billions and billions and billions of dollars for small businesses, and these are anywhere from, you know, one and two-person operations all the way up to maybe a couple hundred folks at the high end.

   5. DGDavid George22:39

      That's amazing. Yeah. The, uh, I, I think you've compared it in the past to like a local shop owner or like a local pub owner, and if you think about what Whatnot allows that person to do compared to, say, Amazon, which is like highly utilitarian-

   6. GLGrant LaFontaine22:55

      Yep

   7. DGDavid George22:56

      ... um, you know, highly gamified and like competition among first-party, third-party, international sellers, like it's just an entirely different experience on the sell side, um, that will allow someone who's creative and ambitious to thrive maybe in a way that they wouldn't otherwise on those platforms. Is that fair?

   8. GLGrant LaFontaine23:12

      Yeah, I think it just empowers small business in a way where maybe the, the prior trend was to almost disempower small business and obscure them away.

   9. DGDavid George23:20

      Yeah. Yeah, yeah.

   10. GLGrant LaFontaine23:21

       We, we put a lime light on them.

   11. DGDavid George23:21

       Gather the power centrally. Yeah. Yeah. That's well said. That's well said. Um, so you have really interesting insight into all of these different types of entrepreneurs, right? So, um, I'd love to maybe start with just, you know, the original categories like collectibles, cards. Like, what are you seeing, uh, about the behavior in that market?

   12. GLGrant LaFontaine23:42

       Um, [clears throat] so I, I think we're, we're seeing a continuation of the trends that we saw when we first started the business, which was one of the, one of the reasons we s- we, we came back into collectibles, we saw a bunch of people getting back to the market. It was people like us who were, had maybe some money and were buying things that were nostalgic from childhood and getting back into unique, um, you know, things that they loved. Um, and that trend's basically continued unabated for the past six and a half years. And so, um, you know, I, I think collectibles i- is, is largely going like mainstream now, for like lack of a, a better term. You have, you have mainstream celebrities in it, you have athletes in it, and so I think a lot of people thought, uh, collectible, thought, think of collectibles like a niche thing, but it's actually becoming a core part of, of pop culture, and I think over the past six years, we've just seen that evolution continue to grow and grow and grow and grow. And you know, in, in fact, you know, a lot of the new art that people are collecting is now like trading cards with, that are going for millions of dollars, and, you know, maybe your parents If they were doing high-end art or, you know, you were lucky enough to have parents who could do that, they're buying, you know, famous artists, and now people are buying like the one of one-

   13. DGDavid George24:55

       Yeah. Ricky Jordan cards

   14. GLGrant LaFontaine24:56

       ... you, you know, yeah.

   15. DGDavid George24:57

       Yeah, yeah, yeah.

   16. GLGrant LaFontaine24:57

       LeBron James refractor or something like that.

   17. DGDavid George25:00

       Yeah. Yeah, yeah, yeah. It's super cool. Uh, yeah, and it's obviously there's an entertainment element of that as well. I, I, I've been struck by the scale of some of the businesses that are on Whatnot. So obviously you're empowering, I think, millions of small businesses, but, you know, if done right, uh, a business owner can actually build something north of $100 million of revenue and highly profitable on, all, all on the back of Whatnot.

   18. GLGrant LaFontaine25:22

       Yeah. You know, the, the biggest businesses on Whatnot are probably doing upwards of a cou- $100 million in, in revenue and, you know, with like very strong EBITDA margins, 20, 30, 40-plus percent. You know, what we, what we try and do, um, you know, so if you looked at Whatnot last year, we did, you know, over 8 billion in sales, and, um, so far this year we've done over 8 billion in sales. And we don't-- we take a, a small fraction of that.

   19. DGDavid George25:45

       Yeah.

   20. GLGrant LaFontaine25:45

       We, you know, we, we, and we'd like to, we're, we want to, we're not raising fees or doing that. It's really important that the businesses take the majority of that, and then our business grows with, with all those businesses. So we just spend, you know, all of our time trying to help build great businesses and make sure that people who are transacting with those businesses have a great experience.

   21. DGDavid George26:03

       Yeah. Yeah. It's awesome. It's, it's, it's one of the great and probably lesser-known, less-covered stories of small business empowerment in the US, and increasingly now in Europe, which we can talk about.

   22. GLGrant LaFontaine26:15

       Yeah.

   23. DGDavid George26:15

       But it's, uh, it's super exciting. Um, I, I wanna shift gears now. You know, that's obviously a little bit on the supply side. Um, you know, talk about some of the categories that you're working on. Obviously, you know, you started with collectibles and, and, and cards, and then now you have success, you've had a lot of success in fashion, um, which is obviously one of the biggest categories in commerce, and there's many others. So just talk about the category expansion evolution over time.

   24. GLGrant LaFontaine26:39

       Yeah. I mean, [clears throat] I guess if you look at Whatnot today, [clears throat] we're selling things in 100-plus categories. Um, [clears throat] and then we're always investing in new areas to help people grow their business. So some of the fun ones today are like fresh food and drink, where you can buy fresh fish sourced from the dock in San Diego, or, um-

   25. DGDavid George26:59

       By the way, Ben, Ben and I started buying it after dinner.

   26. GLGrant LaFontaine27:01

       Did you?

   27. DGDavid George27:01

       Yeah, yeah. [both laughing]

   28. GLGrant LaFontaine27:02

       Yeah. All that. It's awesome. Um, another one of my favorites, there's a, a barbecue restaurant where you can get amazing barbecue and, you know, I have a bunch of it sitting in my freezer. [laughs] Um, you know, and I, I just like, I think, you know, the fresh f- it's, it's early days in fresh food for us, but I'm excited to buy it because I think the food supply chain's so opaque in the US, and it's really nice to know where your food comes from and be able to get the story around it. Um, you know, flipping gears, uh, I don't... For whatever reason, all my friends golf now. I'm at that age in my life.

   29. DGDavid George27:34

       'Cause you're getting old. Yeah. [laughs]

   30. GLGrant LaFontaine27:36

       Yeah. Um, my hip's bad, so I can't do any other real sports. Um, and so golf on Whatnot is having a huge surge, you know. It's growing hundreds of percent year over year, and we have all these golf shops selling and so that's, you know, another, another fun category that, uh, I've been buying in and the team's been investing in, and you sort of, s- there's so many beyond that even.
7. 29:22 – 32:47

   Expanding Into Europe & the Seafood Distributor Story

   1. GLGrant LaFontaine29:22

      a really good price.

   2. DGDavid George29:23

      Yeah, 100%. 100%. Um, the other part of, you know, expansion is obviously you've had a tremendous amount of success in the US. Um, talk about the expansion into Europe and what's worked, what's not, what are the learnings?

   3. GLGrant LaFontaine29:37

      Yeah. Um, so today I think we're in about, we're in 10 countries. So, uh, US and Canada and, and North America, uh, five countries in Europe, and we're also now in Japan and Australia. So we're, we're sort of, um, you know, have a good chunk of the globe covered. Um, the, the, I think the most interesting thing, uh, that I, I don't kn- that I think would be counterintuitive to folks is that we've just seen it work-

   4. DGDavid George30:02

      Yeah

   5. GLGrant LaFontaine30:02

      ... the same way across all of those countries, which is there's, um, all the small businesses that we've helped create in the US, we've been able to help create there in collectibles and fashion and electronics, and a lot of the dynamics are incredibly, incredibly, um, incredibly, incredibly similar. Uh, and so, um, you know, we're just incredibly bullish that like live is an incredibly durable value medium in which to shop from.

   6. DGDavid George30:30

      So one of my favorite stories is the, is the recent one that you've, you told us about the, the seafood distributor, uh, who messaged you on LinkedIn. And, uh, first of all, like what an inbound. Uh, and, and then he went live the following week, and he sold, uh, I think between $3,000 and $4,000 of fish during the pilot-

   7. GLGrant LaFontaine30:48

      Yep

   8. DGDavid George30:48

      ... phase. Um, so what happened that caused that, and like how did that even come about?

   9. GLGrant LaFontaine30:57

      Again, I, I think the, the punchline there is that live's just a really good medium-

   10. DGDavid George31:01

       Yeah

   11. GLGrant LaFontaine31:01

       ... to discover things, right? And so his story is he, you know, he's been in the fish business for a while, he deeply knows what he's selling. He's gonna bring you the, the freshest, um, fish from San Diego at that time of year, and he's rotating the stuff in when it's seasonal. Um, and he, he's so incredibly knowledgeable, so you can watch his show and you see this type of fish you've never heard of, and you talk about how it's sustainable and, uh, that it just got off the pier today, and here's the fisherman who caught it. That's just a great experience. And so, um, you know, we can take him and we can push him to and whatnot now as a large, you know, buyer base and, and, you know, it's pretty easy then to generate thousands of dollars an hour in sales, um, with that experience. And so-

   12. DGDavid George31:47

       Yeah, and imagine him trying to sell over the internet at large. Like, they're actually like... Is-- Like, he can access his local market, but there's probably no way for him to really access a nationwide market-

   13. GLGrant LaFontaine31:58

       Yeah. And I-

   14. DGDavid George31:58

       ... except for something like this

   15. GLGrant LaFontaine31:59

       ... and I think it's really hard, like buying food on the internet, like fresh fish, like-

   16. DGDavid George32:04

       Yeah

   17. GLGrant LaFontaine32:05

       ... 'cause it's one of the, it's one of those things you're like, "Well, fresh fish on the internet, like how do I know if it's good?"

   18. DGDavid George32:09

       Yeah.

   19. GLGrant LaFontaine32:09

       "If I can get sick from it." Um, and so video just really enhances the trust.

   20. DGDavid George32:14

       Yeah. Yeah, yeah.

   21. GLGrant LaFontaine32:14

       And-

   22. DGDavid George32:14

       It's like a, a real identity of the person together-

   23. GLGrant LaFontaine32:16

       Yeah

   24. DGDavid George32:17

       ... and that they see you shop.

   25. GLGrant LaFontaine32:17

       You're talking, you can ask questions.

   26. DGDavid George32:18

       Yeah, you can ask questions.

   27. GLGrant LaFontaine32:18

       You can know how he's gonna pack it. And if you're on a static website, like, "Well, I hope it's good."

   28. DGDavid George32:24

       Yeah. [both chuckling] Yeah, that's true. That is very true. Okay. So if you think about the platform, and you've talked about the scale that you guys are running, it's just massive, massive scale. Um, and so you-- One of the things I've used to describe you and Logan is relentlessness. Like, you guys are relentless in execution.

8. 32:47 – 39:34

   Operating at Scale: Staying on Top of What Breaks

   1. DGDavid George32:47

      What are some of the things that you encounter with that amount of scale that you constantly have to be on top of? And I think this is a big... Like, obviously now you're big and you have a network effect, but I think this is one of the big underrated things that allowed you to win in the early days, is that you guys were constantly on top of anything that could break. So I'd love to understand some of those big things.

   2. GLGrant LaFontaine33:10

      Yeah. I mean, it's, it's, it's challenging. Um, I mean, you know, there's so many dimensions to, to trust. So there's sort of like, is the platform reliable, and is it working, and is it stable, and is it fast? And so, um, you know, we measure just everything.

   3. DGDavid George33:26

      Yeah.

   4. GLGrant LaFontaine33:26

      Um, like I, I think the, the, the punchline on trust is measure everything. Um, and, uh, we have a-- invest a lot in it. So I think, um, trust and safety in particular on Whatnot is about 40% of employees.

   5. DGDavid George33:41

      Wow.

   6. GLGrant LaFontaine33:42

      So yeah, so it's a huge-

   7. DGDavid George33:42

      That's incredible

   8. GLGrant LaFontaine33:43

      ... it's a huge, huge investment from us 'cause it, it's a, it's a challenging one and you don't wanna put your credit card in a place you, you don't trust, and you certainly don't wanna buy fresh fish from a place you don't trust.

   9. DGDavid George33:52

      Right.

   10. GLGrant LaFontaine33:53

       Um, and, and so, so, so those, you know, I think lot of measurement, lot of user feedback, um, and then a big just people investment to get the thing done is, is sort of what drives it. Um, and then, you know, the problems are, are pretty diverse and you have to make sure you're building the right set of things for it. So a-as an example, [clears throat] we have a, a system in the background, um, we just call our, our rules engine, and it, um, takes in billions of data points at this point in sub-one seconds to be able to take down or find any range of bad behavior on the platform. So if you harass someone in a live stream, the LLM will detect it. It will get plugged into the, our action rules engine. It will look at the history of the seller, and based upon other signals, programmatically take them down, suspend them, ban them, warn them. If you are not shipping on time, the, the rules engine will do the s-same thing. If you have a high refund rate, the rules engine will do the same thing. And so, um, and, and look, these are ever-changing, you know, problems and issues 'cause, um-

   11. DGDavid George35:08

       Yeah, weighting of scoring and things like that will always change.

   12. GLGrant LaFontaine35:11

       Yeah.

   13. DGDavid George35:11

       Yeah.

   14. GLGrant LaFontaine35:11

       Um, and, and so you constantly have to, uh, be on top of these things.

   15. DGDavid George35:16

       Yeah. Yeah. I mean, you know, if you think about just how many concurrent users you have and how many transactions you process per day.

   16. GLGrant LaFontaine35:25

       Yeah. I, I always... The, the, the analog I like for trust and safety is so, you know, tens of millions of people use Whatnot every month.

   17. DGDavid George35:31

       Yeah. Yeah.

   18. GLGrant LaFontaine35:32

       And so, um, the trust and safety team's basically the police force and the, the legal system of, of Whatnot. You gotta write your policies. You gotta have your people who enforce your policies. And, you know, in a, a city that has 10, 20 million people, you're looking at a city the size of Tokyo or, I mean, maybe a better analog would be like, I mean, it's a couple, couple New York Cities.

   19. DGDavid George35:55

       Yeah, two New York Cities.

   20. GLGrant LaFontaine35:55

       Two New York Cities.

   21. DGDavid George35:56

       Yeah.

   22. GLGrant LaFontaine35:56

       And, um, uh, you know, in, in, in New York, um, it's not, not perfectly run. Uh, and so there's gonna be some bad things that happen. People get arrested. But at our, at our scale, 'cause of some of the systems we've built, there's actually far, far fewer-

   23. DGDavid George36:13

       Yeah

   24. GLGrant LaFontaine36:13

       ... problems. And, and then of course, like if, Whatnot is a business for a small, small business. Everything's on video.

   25. DGDavid George36:19

       Yes.

   26. GLGrant LaFontaine36:19

       So if you're sm- so if you're a small business, you wanna build a great business. Any good business knows you gotta have repeat customers. You gotta invest in the customer experience, so our sellers reinforce it. Then you're on live video. [chuckles] So it's not, you know, you're not gonna get away with too much-

   27. DGDavid George36:31

       Yeah

   28. GLGrant LaFontaine36:31

       ... on live video. You know, things, things happen. Um, and then you s- you sort of go, "Okay, we put 40% of the company on, you know, law enforcement-"

   29. DGDavid George36:40

       Yeah

   30. GLGrant LaFontaine36:40

       ... effectively, their trust and safety team.
9. 39:34 – 41:48

   What's Next: Cars, More Countries & Better Businesses

   1. DGDavid George39:34

      Whatnot is definitively one of the most interesting and unique companies that we've invested in, um, and you know, I've been very fortunate to be part of your journey. In closing, I would love to hear just what is next. Like, what are the most exciting things that you're building towards, uh, that you want to grow into over the coming 12 months?

   2. GLGrant LaFontaine39:53

      Yeah, I mean, in, in some ways it's, it's relatively simple, which is, um, there's just an incredible amount of work to do to help more and more businesses grow on Whatnot. And so over the next 12 months, 24 months, 36 months, a lot of it is just, like, making sure sellers can run better businesses on Whatnot, giving them the tools to run better businesses, opening up and making the experience better for more categories on Whatnot. So one of the ones that I've been dying to do, um, is, like, I want to do cars on Whatnot, 'cause you should be able to s- buy a car on Whatnot, and how cool would it be to be able to, like, see the full experience, get the video behind it?

   3. DGDavid George40:31

      Oh, this is-- that's an awesome idea.

   4. GLGrant LaFontaine40:32

      Yeah, it's gonna be, um, it's gonna be amazing. It might be not good for, um, uh, my bank account.

   5. DGDavid George40:38

      [laughs]

   6. GLGrant LaFontaine40:39

      Um, and I'm ob- I'm obviously obligated to, to try it out.

   7. DGDavid George40:42

      You have to. You have to test all the products. Yeah.

   8. GLGrant LaFontaine40:43

      So yeah, you gotta, you gotta, you gotta dog food it. Um, and so, so I think there's a, you know, just a huge amount of investment just continuing to make sure, make people, help people build better businesses. Uh, and then, you know, in order to do that, we have to have a really great buyer experience.

   9. DGDavid George40:56

      Yes.

   10. GLGrant LaFontaine40:57

       'Cause we-- and in order to build a good business, people have to come back, and so we're gonna continue to make sure we're investing in customer support, trust and safety, bringing down shipping prices, improving the selection and quality of the products on the platform. And that's, that's really it. Now, maybe we'll launch in some more countries. We'll do some cool stuff like cars. You know, eventually we'd like to get into liquor, beer, and wine. So there's a whole litany of things that we, we're, we're excited to do, but fundamentally it boils down to help more people build businesses and make sure that the people transacting those businesses are having a great experience.

   11. DGDavid George41:28

       That's an awesome way to close. Your maniacal, relentless focus on the seller experience obviously drives the buyers, and then making the buyer experience as affordable and as good as possible is clearly working. So, um, thanks for the time, Grant.

   12. GLGrant LaFontaine41:44

       Yeah. Thank you.

   13. DGDavid George41:44

       So fun to be with you. [upbeat music]

Episode duration: 42:07