Sarah Tavel

In order to tip a market, you need suppliers to want to lean in on your marketplace. My partner, Bill Gurley talks about how great marketplaces create the new incumbents. So you basically have suppliers who aren't the incumbents.

GMV, it's a metric that it seems like... Of course, you can't build a marketplace without growing GMV in the same way that you can't build a social product without growing MAUs. But if you focus, if the race that you think you're running is to grow MAUs or to grow GMV, you're not actually going to run the right race.

The test for me, of whether you're building a product that has the ingredients to create a retentive product on a micro level, just at the user level, is that the product should get better the more you use it, and you'll have more to lose by leaving it.

Every time a user users your product, let's say they're clicking on the mouse or they're tapping on their phone, I love to think of it as this kinetic energy that they're putting into your product. You're taking that energy, and your job with a great product, is to take that energy and, as much as possible, convert it back to the experience that they're having with your product.

And the hardest thing I think about building these marketplaces is that the ambition can often feel like this sun, like the heat of the sun that's trying to warm everything up, and you're going after this big market, warming the ocean. And I think that, really, what the the best, ambitious founders do is they focus that ambition like a laser beam on a small market, the thimble.

The only way to get to that place, to get to that moment of real dominance where you have this winner take most dynamic is that you have to tip your market, and that's the only scalable way to do that, and that's what level two is. And so, how do you maximize your chance of tipping a market? You have to focus on a really constrained opportunity, and that is level one.