Weedeating is art, and as any great artist should, I have a vision, a theory, an artist statement that guides my weedeating: controlled chaos. I like my yard to walk the fine line between expertly manicured perfection and uncontrollably overgrown wilderness. Regardless, there’s something magical about weedeating while listening to a good album or podcast – or, in this case, listening to a YouTube video.
Supply Side Prioritization
This past Sunday, instead of listening to Workingman’s Dead or Red Headed Stranger again while sculpting my front yard’s blades and weeds, I enjoyed a great presentation by Ann Miura-Ko (of Floodgate) and her subsequent conversation with John Lilly (Greylock Partners). You can find the video here (don’t worry, I just listened – I wasn’t watching a video while weedeating).
I particularly enjoyed their discussion about marketplaces that starts around 44m 50s.
Ann’s comments about marketplaces are awesome. She discusses how, when analyzing a marketplace in its earliest stages, the most important piece is not demand, it’s supply. From the trenches of building a marketplace, I will confirm this is counterintuitive but true. Ann wants to determine how effective a company is at convincing supply to come on board, how loyal the service providers are to the marketplace as a platform (rather than getting a customer and then trying to circumvent the marketplace), and how much longevity the company is seeing with the supply side (i.e., does it look like the service providers are going to keep using the marketplace).
She discusses the importance of focusing on supply, because having supply will lead to demand. It’s important to show the supply dynamic early on, because it’s the leading indicator to liquidity. In short, you must prove there are a lot of people who want to work in your marketplace.
Here’s a riddle: for an entrepreneur building a marketplace, what’s more satisfying than seeing a user request come into the marketplace, get claimed by a service provider, fulfilled, rated 5 stars, and billed. Answer: Nothing.
The WTF Experience
Since my Sunday was shaping up so nicely, I stayed on the Floodgate train and moved to the living room for some iced tea to watch Ann’s partner Mike Maples present to some Stanford students. Find that video here.
In particular, I liked Mike’s comments at ~32m about delighting your users/customers. He dubs moments of complete delighted astonishment the “WTF Experience.” At this point, he’s just finished discussing the analogy between tango dancing and the process of finding product/market fit, an “intimate back and forth.” So true. Using Lyft and Tesla as examples, Mike makes the excellent point that, “A lot of people think their product is good, and that rational customers ought to like it and buy it, but customers…need to say ‘WTF, I didn’t know that was even possible, are you kidding me?'” He calls this “actualizing your advantage in the product experience.” He adds,
“The best places to delight the customer are in the areas where you’re fundamental advantage just sings, and if you stick the landing on that, not only do you delight the customer, but it’s really hard for other people to do what you just did.”
Other gems from his presentation:
- Read the chapter about “mastering emergent strategies” from The Innovators Guide to Growth
- Be clear on price. It’s better to have clear high prices than unclear low prices
- Read up on “category design” using playbigger.com as a reference
- The purpose of a seed round is to marry Proprietary Power and Product Power
- If you can use a seed round to create something people love that’s defensible, that was a good seed round
Find any other relevant articles, videos, interviews or otherwise? Let us know in the comments!