Investor in 1000+ Marketplaces: Fabrice Grinda (FJ Labs) on 2025 Trends for B2B and B2C Marketplaces

00:00:00: Welcome to the episode of The Unicorn Big Read.

00:00:02: Today, we will have a look into Marketplaces and their lookout for twenty-twenty five because they year is accelerating everything's getting back on track everybody working again.

00:00:15: so therefore I decided To bring on Fabrice Grindag.

00:00:18: And Fabrice is probably best person talk about market places.

00:00:22: after doing one thousand one hundred ninety two unique investments with FJLab.

00:00:28: FJ Labs.

00:00:28: three is a fund coming to an end preparing fj four.

00:00:33: I call it fj for now because its quicker, but more than or like three hundred fifty five exits to be precise including partial exits probably one of the most iconic ridiculous and that's probably not the right word But ridiculous stories as i've heard over last year isn't uh One Of The Most unique personas even when there was this large team behind It As Well That I got To Know.

00:00:54: so therefore I thought, Fabrice we will have to talk marketplaces today and i'm super happy to have you on the show again.

00:01:02: Thank you for having me.

00:01:03: so You've been a founder yourself.

00:01:06: now your investing.

00:01:08: how are you assessing like knowing both perspectives?

00:01:11: How are you accessing it here?

00:01:13: at which time frames Are you looking that when you're making decisions in building ceases?

00:01:19: these is um So work.

00:01:21: I would say bottoms up type fun meaning We don't pre-existing portfolio construction where we're like, oh!

00:01:28: We want to invest in that and many companies.

00:01:30: And this has to be the thesis.

00:01:31: I think it's more if we meet founders who would like or we'd invest?

00:01:34: If we don't...we don't.

00:01:36: In years like twenty one when we felt everything was overvalued, we invested into fewer companies and then year is like twenty three of twenty four were the markets for except an AI more depressed, we weren't investing like crazy because you felt the opportunity was

00:01:49: great.".

00:01:49: The thesis.

00:01:52: At perspective, we see the trends and how companies are evolving.

00:01:56: And as we see trends evolve because new founders were coming up with a new models that approaches We evolved like thesis over time in which seen marketplaces start what these double commit models then become more vertical.

00:02:10: So they were horizontal mark places and vertical marketplace is there?

00:02:14: manage marketplaces?

00:02:15: Then we have about marketplace.

00:02:17: pick type marketplaces on can detail what these are.

00:02:19: And there were definitely many more trends happening now in uh, twenty-twenty five and we're still at the very beginning shockingly enough of The Marketplace Revolution.

00:02:27: So it's a sentiment for Twenty-Twenty-Five from end.

00:02:31: to dive into that when you look back at twenty twenty four out?

00:02:35: What was they like?

00:02:37: Look Back Sentiment For Twenty Twenty Four and then the lookout for Twenty Twenty Five based on

00:02:42: Yeah, so let me talk about the sentiment writ large in a venture category.

00:02:46: So P hope.

00:02:47: twenty one of course was a bubbly year where everything is frothy and everything was overvalued as rates went up because ventures A is a risk asset.

00:02:56: there's massive retrenching ends and Venture essentially has been in a recession even depression if not a cold winter for the last few years.

00:03:05: So twenty three and twenty four we have total venture investing that is down like sixty six to seventy five percent Peak to Trothna, of course maybe the peak was overvalued in twenty-one but it's massively retrenching with lower number of investments for lower shock sizes.

00:03:22: And essentially no exits and no liquidity that was obtained.

00:03:25: so That said its been a tale of two cities.

00:03:27: if there has been The venture as whole which is like this deep depression There have been AI extremely hot and frothy and bubbly and continues to be that.

00:03:38: So I actually thought If I look back at twenty four, and expected that the deep tech recession would continue.

00:03:46: And it has continued.

00:03:48: rates remain high.

00:03:49: The liquidity opportunities remained limited.

00:03:52: M&A was limited partly because of companies were not flush with cash outside of AI and because m&a's been mostly stifled by the regulatory regimes, the SEC FTC FCC etc.

00:04:03: have essentially limited a lot of M& A. so large companies are now buying other companies in the IPO.

00:04:09: markets have been closed So there's been no liquidity.

00:04:12: Many LPs felt overexposed for Venture, so Venture as a whole has been in the doldrums in general except an AI and many people saw the extraordinary growth of OpenAI.

00:04:23: they felt didn't miss the boat And they basically weren't all-in.

00:04:25: All AI all the time Not really understanding necessarily whether we're investing again and differentiating.

00:04:32: The amazing products are not so amazing often investing what I would consider to be you know, tools that are okay but like co-pilots or whatever.

00:04:40: But they're not really differentiated.

00:04:41: They don't have to differentiate data sets, differentiate LLMs, no viable business model and worst of all crazy valuation.

00:04:48: so I think there is a day of reckoning to be coming at some point in the AI investing space even though AI will transform their world.

00:04:56: um by... No it's been fraught with AI doldrums everywhere else.

00:05:02: now in twenty five?

00:05:03: Now the macro has been pretty good actually.

00:05:05: uh we have lower inflation, full employment and the economic growth in productivity growth has been pretty good.

00:05:12: Now as I look forward to twenty-twenty five?

00:05:15: um i suspect that'll be more of the same.

00:05:17: but macro is it were no longer a macro driven environment where in a slightly lowered rate environment which is uh bit more benign And the general fundamentals remain pretty good between low reasonably low inflation high unemployment low unemployment.

00:05:34: It is a hope that the M&A markets and the IPO market start reopening, in fact we started finally seeing exits of very best companies with portfolio.

00:05:46: I think it will start at twenty-five and continue into twenty-six and hopefully accelerate to twenty six or twenty seven.

00:05:52: And as result i suspect that the venture market would large resort coming out of the doldrums outside of AI In twenty twenty five.

00:06:03: so im actually more bullish that I've been on the venture market for twenty-five and twenty six, then I bet it was in the past.

00:06:09: And yeah, I'll pause here

00:06:11: do exits have to happen first before the venture mark markets starts to accelerate again?

00:06:17: Or Do you say because of the anticipation That this will happen at twenty five twenty six or twenty seven like whenever The exact date will

00:06:26: be

00:06:27: everybody is more likely also LP's More likely to invest money in funds against.

00:06:32: so what?

00:06:32: What's a dynamic year?

00:06:34: I think it's a bit of both.

00:06:35: Obviously, as exits happen the LPs get liquidity and they're more willing to rewrite checks into venture funds.

00:06:41: but in general because other asset classes especially at public markets have done rather well there is some level of liquidity and rates are starting to fall.

00:06:49: so i suspect that even absent from early indications of exit there will be an increasing appetite for venture and venture, and venture investments in twenty five relative to twenty three and twenty four.

00:07:05: Obviously it would accelerate be very much helped by exits but if they don't happen just yet I think is probably okay.

00:07:12: I recently did a quick episode with Kevin Hartz we might know as well and Kevin said there's no incentive to go public at the moment that what were talking about he also says anytime soon.

00:07:30: Why is there no... Do you agree?

00:07:34: I think the first question and second question, what needs to change?

00:07:37: that IPO markets become more attractive again for good companies than we have in portfolios are currently not exited or IPOs.

00:07:47: so what need's a change?

00:07:50: different reasons why people don't want to go public.

00:07:52: First of all, if we are the very best companies in the portfolio and you're compounding very rapidly there's no reason for you to go publicly right?

00:07:58: If your SpaceX or Stripe... You already have access to liquidity through secondary markets and investors were throwing capital at you regardless.

00:08:07: so that fact that you've already worth hundreds of billions on the case with SpaceX then delaying IPO probably makes sense especially since the downsides of being public, having all their information out there dealing with section four or four and stocks compliance at all.

00:08:25: The regulatory regime in a pain that goes from being public?

00:08:28: And so I think we indirectly invested in SpaceX in like two thousand seven.

00:08:33: you know it's been eighty.

00:08:35: it's written whatever seventeen years are they're sold over eighteen years to this point and they're still not public enough.

00:08:40: going public anytime soon and that's okay.

00:08:42: There companies can't really go public because they raised money at twenty one and very high prices.

00:08:47: And today, the public markets would actually be had lower valuations than other private areas until for them going public is unappealing unless they absolutely need to capital when there are in their cut out of the private market.

00:09:00: but frankly maybe you're not the best candidates that There's.

00:09:03: this intermediate set up companies I think already to go public.

00:09:06: there were five ten billion.

00:09:08: They are profitable somewhat reasonably price well to the last round and going public would be a liquidity event for their investors, founders at LPs.

00:09:18: And also they're late enough in that game but actually there's no... They are ready series G or year now!

00:09:25: So maybe there is more capital on private markets.

00:09:27: so it really makes sense?

00:09:29: For those I do think Going Public make sense because companies like Shipbob or Flexboard or Klarna will go public at some point of twenty-five or twenty six By.

00:09:41: that said, the universal companies for which growing public makes sense is more limited.

00:09:45: Now Is there a way to make it less onerous?

00:09:48: To go public in terms of both costs and oversight.

00:09:51: maybe The It's painful enough but it doesn't make sense with no public unless you're worth like five billion plus otherwise You don't have liquidity or an endless coverage.

00:10:02: And then used to be very different.

00:10:03: right I think Microsoft went public at a two hundred sixty million market cap.

00:10:09: If your worth turned to sixty million today, you can't afford to go public.

00:10:11: It costs you several millennia or two be public and You'd have no coverage and no liquidity.

00:10:17: And so Do we want to bring this down again?

00:10:21: Maybe in which case it requires a pretty profound Regime regulatory regime change Which I don't see in the cards.

00:10:28: So i suspect that the threshold for going public at least In the uos will remain pretty high and it's okay.

00:10:34: uh, public market investors and the general public when they're buying socks so that don't buy back companies.

00:10:43: Um it does mean to probably cut them off about high growth companies where most of the high-growth happens in private markets And then once there no longer a higher growth They go public.

00:10:52: So kind of sucks if you are a public market investor because It means mostly value accrues To people like me on the private side.

00:10:59: um but I guess what is from a structural perspective

00:11:02: What does this whole dynamic means for?

00:11:06: people like you running funds that typically run on a ten plus two basis.

00:11:11: So, ten years of an investment horizon can be adjusted a bit and extended.

00:11:18: but seeing all these dynamics shifting the life cycles over company until liquidity event happens to future how does this change the venture industry?

00:11:32: The duration from investment to exit has increased dramatically and it's kept increasing over the last twenty years.

00:11:38: And yes, today if you invest in the seed probably for very best companies are going go beyond that.

00:11:45: ten plus two.

00:11:48: You will have to get letters or from your LPAs to extend even further... It actually makes sense because they're compounding aggressively.

00:11:59: but The problem from an adventure industry perspective is because the DPI's have been reasonably low, so they distributed capital.

00:12:08: How much exit we've been getting on their way up?

00:12:10: That delta between when you raise a fund and then get the capital needed.

00:12:16: maybe three-fund lag right.

00:12:17: So may be if we are at Fund four now that were about to raise in Q one of twenty five.

00:12:25: Our fund one is now fully distributed, meaning we've returned OneX to capital.

00:12:29: So in a way the FundOne exits and were at top-decile of DPI.

00:12:35: so most funds.

00:12:36: probably there's four or five.

00:12:38: six fund lag between investment an exit which isn't you know massive negative cash flow.

00:12:44: what it means for people like us though?

00:12:46: The reason we even able to get away with high DPIs because we write small checks.

00:12:51: We been getting a lot of exits through secondaries And so the secondary markets have actually been exploded.

00:12:56: So one of the bigger trends in venture is they're more and more secondaries, both in companies but actually funds.

00:13:03: there are new investors that are buying full-on positions LP Positions from other LPs especially in the lead stage funds or funds that had been deployed for ten years twelve years whatever.

00:13:15: if people were tired then they just want to exits positions in the GPs of funds.

00:13:24: Secondary funds are becoming bigger and bigger, so secondary marketplaces like Forge, Equities End, Sheriffs Posts, NASDAQ private markets or becoming larger as people were pursuing liquidity.

00:13:35: That's a mega trend right now.

00:13:40: I think in secondary funds makes sense because liquidity is coming at a premium both you can buy positions companies that have good discounts but also by Positions and good funds at very big like forty fifty sixty percent discussion have by people who want liquidity.

00:13:57: in which way does this affect how I as a founder should Figure out.

00:14:02: Who has an investor?

00:14:03: i Want to take on board

00:14:05: issue In general.

00:14:07: there's all.

00:14:07: the picking investors is like marriage right, they're gonna be their.

00:14:10: your lead ambassador They're on your border could be with them properly.

00:14:12: so Pick someone who likes you, understands what you're doing and has your back.

00:14:17: And it's going to stick with good times or bad times.

00:14:21: from the VC's capital structure perspective I pick VCs that are basically long-term investors.

00:14:27: whether they exit at five years ten years of fifteen years in a way doesn't matter for them.

00:14:33: therefore not being pushed into an earlier exit than you would like Of course people that have been around forever are probably the best bets for that right?

00:14:43: Benchmark, Sequoia.

00:14:45: The people who have long-term committed capital to their funds.

00:14:50: they're not going be in a hurry to exit and in fact they've transformed from just private funds into public or private funds where they can hold public securities forever.

00:14:59: you know that's why Sequoias is an IRA.

00:15:03: but does this matter that much?

00:15:05: I think it generally will not really most VCs.

00:15:08: They will figure out their own capital structure independently, and they let the founders be right like at the end of day.

00:15:13: The last thing you want to do is force a company sell too early as it's compounding And so I wouldn't worry that much.

00:15:19: by the way We at FJ the reason or DPS are highs because we only two three or something companies we can go and get secondaries.

00:15:26: in fact A lot of VCs ask us Hey, do you mind selling part of your position?

00:15:31: We want a bit more ownership on the uprisings.

00:15:33: And so the founders ask us actually if we'd be willing to sell and so but... If you're in lead VC and have twenty percent of that company and are on board You can't get it's secondary because if you try to sell It is negative signal.

00:15:45: Oh!

00:15:46: What did they know about the company?

00:15:47: then we don't.

00:15:48: instead kills the company.

00:15:50: So that approach doesn't really work for lead VCs.

00:15:54: They need to wait until the IPO, and frankly they cannot even sell post-luckup because so much of a company sold their price with collapse.

00:16:02: For lead Vcs there are going be locked up for long time.

00:16:06: it's only people like us who can sell on the way out.

00:16:10: I don't think it changes that much for a founder, honestly.

00:16:12: Just pick the person who has your back and that has capital to follow on

00:16:16: now.".

00:16:16: The one thing that matters more is does the VC... Can they keep supporting you into the seed?

00:16:22: A, B, C

00:16:23: etc.?

00:16:24: Because we're in world where outside of AI, capital has been harder to come by.

00:16:29: so you want VCs with deep enough pockets that can do other rounds.

00:16:33: So i wouldn't worry about that at the preceding seed because if there's seed funds or seed funds then not going to be able to do your A but they have no capital.

00:16:39: But once you get to the A funds, a lot of funds are crossover and they'll do A&B etc.

00:16:43: So think about left lane.

00:16:45: that will be the C,

00:16:46: etc.,

00:16:47: like Andreessen or Sequoia.

00:16:50: The only exception for that is dedicated A-funds amazing like Benchmark Even though they won't have the capital necessary.

00:16:57: lead your B it's okay.

00:16:58: I'd still take them.

00:16:58: They're raising In twenty

00:17:00: twenty four.

00:17:00: You did one hundred first time investments with FJ Labs in companies And therefore thousands of them, especially marketplaces.

00:17:12: So therefore what trends are you currently identifying and seeing?

00:17:17: And looking out for when you're evaluating new businesses?

00:17:22: What are the things that are coming up more right now where you think hey twenty-twenty five might be a chance to have good hit on this trend?

00:17:31: I'll separate so.

00:17:32: first we will read about one percent.

00:17:35: So for a hundred investments, we saw ten thousand deals.

00:17:39: More or less it's better and but of course many of these are out-of-scope.

00:17:44: you know our relevant etc.

00:17:45: so didn't take... We take calls three hundred call deep deal as we get in the week with fifty and then we invest them three.

00:17:54: that is about one percent only took.

00:17:58: calls were like one fifth of those maybe two thousands.

00:18:02: Now, I'll break down the trends into two buckets.

00:18:05: One is mega-trends which we're seeing as a general category and then why not?

00:18:13: things that are interesting but could form the basis of larger trends?

00:18:17: So let me explain that difference between them too.

00:18:19: The big megatrend that we see in this category is the BDB marketplaces and digitization of BDB supply chains becoming massive trend.

00:18:30: so If you think of your consumer life, right?

00:18:33: You can order food on DoorDash or Uber Eats and get it back in like fifteen minutes.

00:18:38: So you could order groceries at Instacard...you could order an Amazon...you'd get everything between a day to two days even the same time sometimes!

00:18:45: You book an Airbnb and get an Uber for five minutes.

00:18:48: so that's when you'll be able to get a hotel booking dot com.

00:18:51: In your consumer-life digitization has happened in very massive meaningful way.

00:19:00: Software is already eating the world in the BD we world though.

00:19:03: That's not true And that's not treated neither at a large enterprise Nor are the SMBs right like so and I'll give you two examples separately.

00:19:11: The large enterprise like if you want to buy petrochemical There was no like catalog available of what's available, but i'm Not even saying amazon where you have one by now?

00:19:20: I'm saying unless just unless it wasn't able then there's No connectivity to the factory during the said manufacturing capacity and delays.

00:19:28: There's no online ordering.

00:19:29: There is on line payment, there was a tracking and so financing in this needs to happen in every industry at every vertical and every category.

00:19:36: right now we're like sub five percent of it usually some one-percent penetration On all of these.

00:19:41: And when I think of these types of inputs that I mean inputs for enlarge like auto parts construction Chemicals energy.

00:19:50: but he could also be like finished goods.

00:19:52: none of that has been digitized.

00:19:55: number two If you think of the life of your little SMB owner, right?

00:19:59: Like a little mom and pop shop owner.

00:20:03: So imagine if you own restaurant people that owned restaurants what they'd like to do... They would like to cook or they liked to chit chat with customers.

00:20:09: yet What is it job did we end up having today?

00:20:11: They need to create a website.

00:20:14: To answer comments of Google and help the TripAdvisor, they needed to get a POS.

00:20:18: They needed accounting.

00:20:19: They wanted to manage their inventory.

00:20:22: They had to do payrolls or negotiate Uber and DoorDash.

00:20:27: So SMB digitization doing all work that these SMB guys don't like is a mega trend as well.

00:20:34: I'll give you some examples.

00:20:35: at SMB we invested in Slice which helps pizzeria owners manage all their back office.

00:20:41: They now have twenty thousand pizzerias on the platform over a billion in sales, very profitable.

00:20:46: we have Fruscha which does same thing for barbershops since that is the same being for laundromats or dry cleaning.

00:20:53: certain companies.

00:20:54: We have one that does it for spas and general like yoga studios etc.

00:21:00: called moments etc.

00:21:02: so this was verticalizing.

00:21:04: On the input side were Nodi for petrochemicals.

00:21:07: In Germany, we're in a company called Shootflex which is their three-sided marketplace in order to get gravel and wear material bank.

00:21:15: I mean many others.

00:21:17: The other three trends i would say are BDB or moving supply chains out of China.

00:21:22: I guess that general trend where they call French shoring especially into India.

00:21:27: For instance if you want to buy apparel If you wanna buy in India, the thing is that there's thousands of little mom and pop manufacturers.

00:21:39: And what do these mom-and-pop manufacturers want to do?

00:21:41: They just want a manufacturer.

00:21:42: they don't know how to answer an RFQ.

00:21:44: They don't need to do invoicing prototyping et cetera.

00:21:47: so marketplace like Ziad will do all that for them.

00:21:50: So we've invested on all these marketplaces To help move supply chains out of China mostly into India but obviously also Mexico Vietnam Philippines Indonesia Etc.

00:22:01: Number four, there are a big lot of labor marketplaces.

00:22:04: They're emerging to support this rise of BDB and so we're in Workrise which is a marketplace for all the services.

00:22:15: workers were in job and talent from blue-collar workers in Europe or in trusted health For nurses.

00:22:23: And then last but not least actually two more Recommerce?

00:22:27: Of course recommerce is very big right now in consumer, and it's actually coming to the BDB world both for a combination of getting lower costs.

00:22:40: And also for green reasons.

00:22:41: so we're investing with company called Ghost which allows you buy excess inventory.

00:22:45: So your little store You can buy clothing at a ninety percent discount from excess inventory From the bigger brands.

00:22:51: then they can sell It.

00:22:52: historically that didn't exist because there was impossible For these stores to by million units but now you could Buy like ten K orders.

00:22:59: I make it work.

00:23:00: It allows us to at least the infrastructure that supports all this.

00:23:03: So, payment infrastructure like Striper Rapid, Automation Robotization Infrastructure so Formic which helps people automate or figure which is robots in factories replacing human laborers are there and BMW In Germany replacing like two hundred fifty K of machinists with a ninety K year robot That works twenty hours a day.

00:23:24: And then there was shipping companies like Flexport, Shipop, Shippo and even cross-border companies that were invested in Portless.

00:23:32: So all those are the major megatrends at BDB.

00:23:36: Now beyond these trends on BDB we're seeing a few interesting companies doing things to suggest more happen.

00:23:43: so The big other trends markedly say cross border commerce is finally becoming reality.

00:23:49: Think of Vinted became so successful in many countries.

00:23:56: Back then, when you had classifieds like Ebay, Klein and Zaggen, they only have listings in Germany as listings in France.

00:24:06: You're not shipping across countries

00:24:07: etc.,

00:24:08: but Vinted basically translates the listing to chats between users as integrated shipping cross-border or payment cross border such that it created for first time pan-European marketplace.

00:24:21: They've created a market place in Europe.

00:24:23: that kind of looks like, makes Europe look the US and it's fully integrated one language, one currency or everything.

00:24:30: but actually is happening

00:24:31: for

00:24:32: real.

00:24:32: Yeah they're crushing right?

00:24:35: There are six billion GMV.

00:24:38: I think there were massively profitable on the UK and Europe.

00:24:41: huge!

00:24:42: And this has happened.

00:24:42: another category so we're investors with company called OvoCo which is a Lithuanian car parts marketplace getting sourcing carpets in Eastern Europe, like Poland and Lithuania etc.

00:24:53: And they're selling it places like France absolutely crushing as well.

00:24:57: so cross-border Is becoming a reality especially in Europe?

00:25:01: Europe has finally looking sort of looks like the US.

00:25:03: next big trend his live commerce now in China on Taobao Which was like the eBay if you want.

00:25:11: twenty five percent of the sales are from live video streaming In the u.s.

00:25:16: This has only happened in one category, which is collectibles.

00:25:18: There's a company called Whatnot.

00:25:20: that we're not investors and they just raised like five billion valuation but for collectibles kind of made sense.

00:25:25: But it's now happening.

00:25:26: another vertical.

00:25:27: so word investors are going to call Palm Street And its basically prosumers at the little store selling rare plants.

00:25:35: They're doing two streams per week.

00:25:37: They sell about ten thousand dollars worth of plants per month.

00:25:40: The women there buying these were spending about eighteen hundred every six months.

00:25:44: It's beautiful because people are telling the story of where that plant comes from or you take care of it, et cetera.

00:25:49: And and creates a rich experience as well.

00:25:51: so live video shopping is coming to The West.

00:25:55: finally this company was absolutely crushing it.

00:25:58: So I can imagine other categories there.

00:26:00: they were themselves expending in another category to the nine crystals and potter pottery Etc.

00:26:06: Then we're seeing the creation of new verticals.

00:26:09: We're in a French company called Alpaga and their creating They're a B to B restaurant equipment marketplace.

00:26:15: And what's interesting is it used to be that if you were in the restaurant, and would buy new equipments The restaurant will go under.

00:26:21: very often then they change cuisines etc.. They can't sell this equipment because its a pain of the neck.

00:26:26: You cant ship it.

00:26:27: It's harder than install.

00:26:29: So when they did was they built a network of service providers Shippers & Installers.

00:26:35: Now the market place works.

00:26:36: Then they've seeded it with supply from like their hotels, hotel kitchens like Marriott etc.

00:26:44: And so adding a service layer in existing categories can create marketplace from scratch.

00:26:49: So we're seeing it as well and things like.

00:26:53: I guess greenification is the big mega trend where everyone wants to green their houses.

00:26:57: But historically if you want to green your house You go into place like Thumbtack or you need a hire Or get contractors that quote you and then hit something with heat pump.

00:27:05: It's very complicated.

00:27:06: You need to manage like, twenty bids and then you typically get screwed where investors are company called Tetra And basically take a few photos of what your system is.

00:27:14: They're like this is the provider This Is The Price?

00:27:17: Then they do it for ya Same thing!

00:27:18: They've added a service layer To another wise... To a marketplace selling you or installing Heat efficiency Or energy efficiency And crush again.

00:27:29: So I guess adding services to make transactions that were complex simple is another big trend, and I guess i'll give you a few more trends.

00:27:40: New business models are emerging for investors in the company in france called labour solif which is a book marketplace.

00:27:46: And what's unique here?

00:27:48: Is they take ninety percent of the commission on the sale of the book You're like.

00:27:52: why would someone to be willing to giveaway ninety percent Of the commission?

00:27:56: it is because instead of being working on maximizing the price through maximizing efficiency.

00:28:00: if your new parents You have a lot of books And at the end of day, you don't have room for them.

00:28:05: So what do... You could sell them one by one on Amazon but it's a pain in the neck to get it scanned and listed itself.

00:28:11: if you need to ship it here?

00:28:12: Basically put all the books in a box they ship into them or your done as you get a ten percent credit buy other bucks and In basically a year They become the lard The leading use good used book seller in France where the ninety percent take rate.

00:28:25: so amazing economics Amazing business focusing are the convenience play.

00:28:29: again We're seeing new trends or ways attacking existing categories by adding new approaches and convenience.

00:28:37: AI is starting to come, I'll give you two examples of the AI.

00:28:40: then i'll stop there in that trends.

00:28:44: Obviously everyone's using AI to do customer care And everybody was using AI To improve programmer productivity In marketplaces.

00:28:53: where we're seeing The most use of AI Is on redefining the listing process.

00:28:58: Right?

00:28:58: so if You want to sell an ebay?

00:29:01: You write a title, you're writing description.

00:29:05: You select the category and enter your price then wait week or two and it sells.

00:29:10: The new model is there's a company we invest in US called Hero Stuff Take photos end create video where describe product.

00:29:20: with AI they convert into full listing.

00:29:24: they pick the price, category of title and description.

00:29:28: They create a fifteen-second TikTok video that you can then share in your socials And they list it on eBay Facebook, Marketplace

00:29:35: etc.,

00:29:36: called Hero Stuff.

00:29:37: We're seeing existing incumbents using their data to reinvent the listing process as well.

00:29:42: So we are investors at a market place called Rebagg In handbags.

00:29:46: What they've done is created this AI called Claire because all the data You take few photos and tell them okay This bag is real.

00:29:53: is this model from this year?

00:29:55: and this condition will sell for the price.

00:29:58: You click and it's sold, like one minute you sold your bag because they won't buy at a price of market which was amazing!

00:30:06: And so we're seeing new trends in AI being used to improve marketplace efficiency.

00:30:12: So yeah... A lot of amazing exciting trends.

00:30:15: And yeah, I expect these to be the beginning and more of these to expend.

00:30:20: So live commerce will come into other categories.

00:30:22: cross-border will exist.

00:30:24: beyond these two examples like gave new business models where maybe you can take higher take rate by adding services.

00:30:29: they are focusing convenience.

00:30:30: we'll come through the four.

00:30:32: an add adding services will unlock new categories were historically it was too painful to transact.

00:30:40: so Those are their big trends outside of the BDB marketplace trend, which as I described is a mega-trend and we're at day zero.

00:30:47: So it'll take ten years for all these to play out

00:30:49: A lot of things happening at once.

00:30:53: so one thing that you touched on this that everybody's using also AI To enhance programming.

00:31:01: and here in there How does be increased productivity that they aren't?

00:31:07: I did I delivers two company building?

00:31:10: here.

00:31:11: And then Hans has come.

00:31:12: like product building and everything else, how do you build defensibility when the as a marketplace?

00:31:20: When they're like delivery of their products itself at the first MVP in having everything set up?

00:31:27: Like How does the dynamic of Building Defensability change?

00:31:31: due to DAI?

00:31:33: There's been mega trend over The last twenty five years Of cost for building companies barriers to entry declining Right.

00:31:39: When I built my first company, and he did a get Oracle databases of Microsoft web servers idea to build by own data center there was no need.

00:31:46: There's only WS but there is also no rat space.

00:31:49: And then we got open source.

00:31:52: you know MySQL and PHP.

00:31:56: Then We Got.

00:31:58: Then We Get Cloud Computing or You Could Use AWS.

00:32:02: and Now With The New AI Revolution Your Getting No Code Low code in Or AI Assisted Codes where the cost of launching a startup is cheaper and lower than it's ever been.

00:32:12: That said, building the tech platform has really never been that bear an entry in marketplaces.

00:32:19: The product itself as easy to replicate.

00:32:22: you can... And In fact most of our market places often launch on Shopify.

00:32:29: if your consumer facing marketplace by side at the Marketplace might just well use Shopify They have all the tools that are cheap, it's easy.

00:32:36: You can embed everything you need from tracking attribution testing like Everything is kind of there.

00:32:42: It's responsive and get a mobile app pretty easily.

00:32:45: So... That has always been kind of commodity.

00:32:49: The Moat

00:32:51: Yeah.

00:32:51: so when your launch in Marketplace There is no moat.

00:32:53: Uh..the product Is actually liquidity.

00:32:57: Its your execution.

00:32:59: its getting buyers & sellers Its having high NPS Its matching them effectively.

00:33:04: It's creating the flywheel, wherever more buyers bring to more sellers and more seller springs or buyers.

00:33:08: Is it a brand you built?

00:33:10: That's the mode.

00:33:10: is the actual execution.

00:33:12: The product itself is not a mode in any way shape or form because this replicable And this has become intrude every vertical basically where Any product as replicable its your execution that estimate.

00:33:24: that's why ideas have some value but Not bad much values really be execution.

00:33:29: that has all about it.

00:33:30: So how would you say what's necessary too and I think touch many of the topics already, but I would love to bring them together again.

00:33:38: To build a brand that becomes number one and to build the modes on off-the-supply demand side and really become The Number One Marketplace in the industry that I'm in.

00:33:50: You needed delight your customers?

00:33:51: And so iIwould start at the very beginning by this typically going into supply.

00:34:02: So you go to the very best supply and tell them, look we're launching a new marketplace.

00:34:08: We don't have many customers yet but were free on it would be just enlisting.

00:34:12: Everyone will say yes.

00:34:13: so actually The big mistake is going too much supply.

00:34:16: You only take limited supply.

00:34:18: Then test some marketing channels.

00:34:21: It could be a sales team Google or tech talk doesn't matter And bring demand and manage them Depending on the category, if you're a used good marketplace.

00:34:31: You want to probability of the item selling be at least twenty five percent.

00:34:34: If your services market place who would have represented these twenty-five percent of revenues out of supply?

00:34:39: But do like them and you are the NPS To be very high in both the supplying that I'm inside it usually by having some level Of management and service layer.

00:34:47: then make sure they're both Very happy once we've done that And their happy and your nps is hi and The sellers say hi buyers are happy you add a few more sellers?

00:34:57: Scaling in parallel, and usually that kind of launches the flywheel where all of a sudden you get network effects with ever more buyers or sellers.

00:35:08: And we're selling everywhere by saying You know your the fly wheel when your cat starts declining.

00:35:12: many of these so-called marketplaces are not Marketplaces because what happens is they spend a lot money buying at this.

00:35:18: set sellers on the buyers.

00:35:20: The more they scale them.

00:35:21: were their cack increases.

00:35:23: It means they have their network effects and it needs some things not fundamentally working.

00:35:27: And I want the unit economics to be very good, but that general idea of you delight your first customers then keep building for them.

00:35:35: make sure there are happy applies not just marketplaces but frankly every startup.

00:35:40: now The way you start in marketplace is may vary depending on what place you're at.

00:35:44: maybe You need to be into one zip code But maybe you're a national product right like.

00:35:48: so how do go about it defers Obviously, if you're in a service category.

00:35:53: You probably need to be hyper local.

00:35:56: If your selling use goods maybe not especially they can be shipable.

00:35:59: So it really depends.

00:36:00: but the yeah Focus and delighting customers are making sure that there is seeing them either sellers They were seeing demand And then their buyers.

00:36:08: so they see enough of what they want That they can transact here.

00:36:11: when I'm starting on marketplace today What is likely?

00:36:16: The first hurdle that i will encounter

00:36:19: Whether it's today or twenty years ago, the first hurdle that you encounter is a chicken and egg problem.

00:36:24: As I have this wonderful site of wonderful user experience but i've nothing... Have no buyers!

00:36:29: And i have no sellers which one do i start with?

00:36:32: My recommendation in ninety nine percent of cases if to start with the sellers because they're motivated financially To be on the platform If your they aren't there They will make money here.

00:36:42: so But as i said highly curated go to The very best ones who are going to Be engaged That Are happy to test set that will be replying to the request from the buyers and make them happy.

00:36:53: Fair in regard of time, I think That's a very sharp Very dense lookout episode with A lot of trends you can dive deeper into when You're thinking about them being like.

00:37:07: That makes sense.

00:37:07: i can pick some ideas From here And use it for my own marketplace business and build on top Of that because i Can look Into different industries.

00:37:16: so And I know you did a marketplace trend episode on your own podcast as well, I will link it down below.

00:37:22: So therefore if anyone can't get enough from you so that for I linked here LinkedIn and of course after labs and in your podcasts there are many more episodes that you should listen to all For example like the outsourcing one.

00:37:38: um but I really enjoyed Fabrice, it's been such a pleasure.

00:37:42: Thanks for sharing all your insights and thoughts on marketplaces in twenty-twenty five cents.

00:37:48: looking forward to catching up soon.

00:37:50: Thank you for having me!