Developing a growth model + marketplace growth strategy | Dan Hockenmaier

ℹ️ EPISODE INFO

Released

October 9, 2022

Duration

1h 4m

Channel

Lenny's Podcast

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

Dan Hockenmaier is an expert on marketplace strategy and growth. He was previously the Director of Growth at Thumbtack as well as a partner at Reforge, where he co-created the monetization track. Currently, he is the Head of Strategy and Analytics at Faire. In today’s episode, Dan shares the building blocks of a growth model, important considerations when building your growth model, and how to get started. We also chat about retention best practices, the complexity of building a marketplace, the future of marketplaces, and when it makes sense to add a SaaS business to a marketplace, and vice versa. Find the full transcript here: https://www.lennysnewsletter.com/p/developing-a-growth-model-marketplace — Where to find Dan Hockenmaier:

• Twitter: https://twitter.com/danhockenmaier
• LinkedIn: https://www.linkedin.com/in/dan-hock/
• Website: https://www.danhock.com/

— Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com
• Twitter: https://twitter.com/lennysan
• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/

— Thank you to our wonderful sponsors for making this episode possible:

• Amplitude: https://amplitude.com/
• Flatfile: https://www.flatfile.com/lenny
• Eppo: https://www.geteppo.com/

— Referenced:

• Reforge: https://www.reforge.com/
• Casey Winters on Lenny’s Podcast: https://podcasts.apple.com/us/podcast/how-to-sell-your-ideas-and-rise-within-your-company
• Faire: https://www.faire.com/
• Dan’s blog post on the future of marketplaces: https://www.danhock.com/posts/the-future-of-marketplaces
• Careers at Faire: https://www.faire.com/careers

— In this episode, we cover: (00:00) Dan’s background (04:01) What is a growth model? (07:20) The building blocks of a growth model for your own business (10:22) The value in building your own model (11:12) The importance of retention over growth (14:49) Getting started building your model (19:18) The growth model at Thumbtack (20:36) The importance of the early user experience for retention (25:02) Why is a marketplace a good business? (28:23) Health metrics for marketplaces (33:47) Supply and demand, and why you shouldn’t neglect demand (36:23) The role of ROI equations and how to use them (39:16) Why you should tread lightly when working with marketplaces (42:43) Expanding marketplaces (46:50) How marketplaces can add a SaaS offering, and why adding a marketplace to a SaaS business is trickier (49:47) When is there an opportunity to unbundle? (54:43) B2B marketplaces (56:36) What is fragmentation? (58:46) The future of marketplaces — Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com.

🎤 SPEAKERS

• Dan Hockenmaier

  guest

• Lenny Rachitsky

  host

• Narrator

  other

🧾 EPISODE SUMMARY

In this episode of Lenny's Podcast, featuring Dan Hockenmaier and Lenny Rachitsky, Developing a growth model + marketplace growth strategy | Dan Hockenmaier explores designing Growth Models and Mastering Marketplace Dynamics with Dan Hockenmaier Dan Hockenmaier explains how growth models—typically spreadsheet-based—force teams to deeply understand how their business actually grows, especially around acquisition, retention, monetization, and reinvestment loops. He contrasts simpler SaaS and transactional businesses with the added complexity of two-sided marketplaces, where supply-demand interactions and second-order effects make modeling and decision-making much harder. A large portion of the discussion focuses on marketplace health metrics (like liquidity and share of wallet), when to prioritize supply vs. demand, and how to think about expansion, pricing, and vertical vs. horizontal strategies. Dan also outlines where marketplaces are heading, including the trend toward higher-value, more “managed” marketplaces and when they eventually cease to be marketplaces at all.

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