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 cocreated 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.lennyspodcast.com/develop...

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Where to find Dan Hockenmaier:

• Twitter:   / danhockenmaier  
• LinkedIn:   / danhock  
• Website: https://www.danhock.com/

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Where to find Lenny:

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

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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/

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Referenced:

• Reforge: https://www.reforge.com/
• Casey Winters on Lenny’s Podcast: https://podcasts.apple.com/us/podcast...
• Faire: https://www.faire.com/
• Dan’s blog post on the future of marketplaces: https://www.danhock.com/posts/thefut...
• Careers at Faire: https://www.faire.com/careers

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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

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