Developing a growth model + marketplace growth strategy | Dan Hockenmaier (Faire, Thumbtack, Reforge)

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.

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Find the full transcript here: https://www.lennysnewsletter.com/p/developing-a-growth-model-marketplace

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Where to find Dan Hockenmaier:

• Twitter: https://twitter.com/danhockenmaier

• LinkedIn: https://www.linkedin.com/in/dan-hock/

• Website: https://www.danhock.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• Twitter: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/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/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

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In this episode, we cover:

(00:43) 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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