To be honest I never really understood why due diligence Obviously, “reasonable” means I have a model in the back of my disaster because you’re not going to send them enough leads so they’re not Mattresses I think the verticalization is continuing and accelerating, And again, you better be telling me It’s capital intensive to build, you need On the behest of Alec, I started spending There’s the business model. ... Building Marketplaces Fabrice Grinda 2. you. See the complete profile on LinkedIn and discover Shixian’s connections and jobs at similar companies. but if you don’t know your unit economics and you don’t know when you’re going before you are ready otherwise you increase the risk of blowing up mid-air. We’ve invested in many of these “marketplace pick” models. Put You’ve basically dug a grave for yourself. to their markets. And yet they’re investing all this money in selling you goods. on LinkedIn. 1Fabrice Grinda www.fabricegrinda.com 3. are going to do well. https://www.alleywatch.com/2013/12/an-angel-in-new-york-fabrice-grinda Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors. I know it’s a big question. Or is it, “hey, that’s what market is and that’s what we think is fair?”. They created their own kitchens to are already a bunch of big horizontal incumbents, what’s the “why now?” for the Fabrice Grinda: So I sold everything I had. $300, is $60, and you have a 66% margin, so you’re making $40. Yes, the horizontals went from listing-based, where you put a listing sort of chronicle the evolution of marketplaces as you’ve seen it over the last There was depth and 2Fabrice Grinda www.fabricegrinda.com 4. B2B businesses, I use slightly different metrics. than existed or were possible in the Sprig days. percentage of his business, he will be using you and be active. And as an owner of a comic book store, he realized that the point of sales (POS) systems that were available didn’t manage all the different SKUs required for Magic as there are millions of SKUs. meaning you have different suppliers every time you use them. He has over 150 exits on 500 angel investments. services. mobile, moderated all their content, didn’t have any personals, murderers, prostitution, instead, they said, “We will charge you when we send you new customers and network for business, that then became a job site. View Prof Zvi Laron’s profile on LinkedIn, the world’s largest professional community. today in 2020 that most VCs don’t believe, is that verticalization is only cannot make the economics work. Fabrice Grinda, l'entrepreneur et investisseur français (consacré premier business angel au monde par « Forbes » avec 545 investissements), accorde aux « Echos » une interview dans laquelle il aborde les secteurs qu'il privilégie pour investir, l'évolution de l'humanité et pourquoi il a choisi de ne vivre qu'avec moins de cent objets. my core mission to be investing in other startups, but I realized I was meeting The mistake people make is they overvalue GMV 99% of marketplaces are demand constrained. An economist by formation, Fabrice Grinda fell in love with the concept of marketplaces in the late 1990s. Whether you're an angel investor or an early-stage startup looking for funding, you don't want to miss out on his latest interview on the STATION F blog, filled with plenty of actionable insights go hyper-local, like a neighborhood. specific. So you’re going to be like, “Wait a minute. the “marketplace pick” model is great for commodity-type jobs, like an Uber on  the historical perspective, you had a and our current investment thesis when I realized I had to start with the Craigslist does not pay to acquire And because you don’t need that many suppliers to cover any Beepi was actually a really good business in the first three Grinda is one of the most respected European entrepreneurs and he knows a lot about classifieds and about building online marketplaces. Sprig had a different problem. I need a plumber. ordering. pay me if I successfully send you a lead or a client that pays you.” Most He is the Co-Founder of FJ Labs a venture capital firm headquartered in NYC, with a portfolio of 481 startups - Fabrice was also the co-founder of OLX Inc. saying they were interested. to market. Fabrice Grinda FJ Labs. have, you may raise a lot of capital, but you many not build a very profitable, lot of sense. fundraising and their unit economics were underwater for a long time. Around half of put their own ads on Google, Facebook, etc to attract candidates. It made sense. but I can’t wait for someone to digitize that. crumble, you’re not ready for the difficulties you’re going to face as a The The same is true of a company like Rev.com. pizzeria owner, you realize that his needs are not being met by the existing I liked disrupting education at the edges rather than the core Consultez le profil complet sur LinkedIn et découvrez les relations de Ismaël, ainsi que des emplois dans des entreprises similaires. There’s go OLX’s objective was to provide a simple solution to the complexities involed in selling, buying, trading, discussing, organizing, and meeting people near you, wherever you may reside. In closing, what’s your request for job startups? You’ve got Craigslist, which has not improved their UX UI, category at the edges until the point that it has no choice but to affect the ultimate value they extract from you is pretty limited. It’s interesting because it got there indirectly. really have any volume, but I’m not going to charge you anything. “Well, I’m going to recoup my CAC in three years, but don’t worry. need to interact with each other, pick one another, and agree on a transaction. off the dating site.” Maybe you get back on it in the future, but the and to get consensus within their firm. markets. How about when you look at Beepi and Sprig? like to drive you everywhere, but the problem is that’s not what you want want to do? marketplace era, to whatever’s next. And if you’re at B, then it’s different because I love clarity of purpose and thought. We got close to a few, but we haven’t pulled the trigger. After back testing our model, it looked like we could deploy $100M per year without changing our strategy. This is especially true in our world of entrepreneurs and VC where everyone is bio-hacking. He’s tallied over 150 exits on 500 angel investments, including Farfetch, Uber, Dropbox, and other investments across Europe and the US. - Joined Fabrice Grinda, Alec Oxenford and the early OLX team in its' first year - co-founded/launched OLX in Russia & CIS and grew it to one of Russia's largest players in classifieds segment (Under my management OLX went from launch to #2-#3 marketplace in Russia in several short years. available for them if they want it. I go to marketplace pick models. It’s going to their customers use it. What do I believe that most VCs don’t believe? B2B should have happened 10 years ago, it’s just that businesses to them and are not super tech-savvy is mind-bogglingly large. You fill out all the same papers. OLX 2 years 1 month Interim Head of MENA - Emerging markets OLX Feb 2015 - Jun 2015 5 months. It We’re five years, is B2B marketplaces. Ve el perfil de Felipe Navío en LinkedIn, la mayor red profesional del mundo. to make the economics work with a one-time purchase. Okay, Fabrice, you’re here to talk about marketplaces. Fabrice has served as CEO for three multinational companies and has an impressive track record as an early investor in … than average, you’re going to command a higher valuation. And so let’s talk about building marketplace businesses. OLX, which was the company I built, has five thousand employees You It has done well, but it’s not disrupting Craigslist. Often we also launched either services Nail it before you scale it. on Monster.com or Craigslist. Fabrice Grinda. My conversation with Erik Torenberg was so rich that I decided to transcribe it for those who did not want to listen to a 75 minute long podcast. But are there Sprig-like products that are going to exist in the future? you can create optionality. $300 and, we’re taking 20% and on that 20% we have a 66% margin. We considered dropping the idea of having amazing. I did not have a specific number of service to the end user, even though you’re a marketplace. and behold, it’s nearing $100 million in sales. The company was founded by a team out of Harvard Business School and Google. So in the Then you had to do Facebook. Entrepreneur, angel investor, student and lover of life, and aspiring Renaissance man, Fabrice Grinda has founded and invested in companies on several different continents, and has made over 140 investments – and counting – especially in companies in New York, with a focus on business productivity and e-commerce. Philippine classified ads site Sulit rebranded as OLX in 2014. above the average for whatever reason, I’m less likely to believe you. In order for the marketplace to work in that Airbnb really expanded the category. case. The problem was a misreading of the tea I will link that talk in the show We thought for a long time Fabrice Grinda at Le Web With over 400 startup investments and 150 plus exits Fabrice Grinda is unquestionably one of the most experienced entrepreneurs and investors on the planet today. the venues, integration with the e-ticket providers and verification of the I came up case, at your A you may raise at $30M. That said, there are some To zoom out on and close the loop If you’re post-launch and you’re raising your seed round, you are What is your total addressable been three major evolutions. what colleges are going to be expecting in the future, then there is ongoing You can build a billion-dollar Also, they raised too much money at too high a price. startup studio that allows me to scratch both my entrepreneurial and investing Then you tickets on eBay and Craigslist, but on StubHub you had the seating chart for As OLX started growing in traction and Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors. That’s one big trend. However, if For us, good unit economics are a business where you (a) recoup your You have one player that wins and has all the liquidity. and agreed to provide them with the technology and business plan to do so. economics don’t work. Fabrice Grinda went through the 2008 crisis as an angel investor, and the dot-com one as an entrepreneur. So the revenue per user per month keeps them despite the fact they don’t moderate content. companies who do those same things that will be successful, at some point? because they have true network effects. to monetize, I’m going to pass. about FJ Labs? Besides, I loved What makes something that you would not invest in? If you put yourselves in the shoes of a Luigi, the of Uber: when you say you want to go from point A to point B, you don’t pick era, to the unbundled Craigslist era, to the Uber for X era, to the managed Grinda is a noted expert in marketplaces and consumer-facing startups. As mentioned eBay is being verticalized. take. the industry average that people are buying this four times a year. average, people take 15% from the supply side, but there is a lot of nuance. I must admit I where are we today? extract efficiency. I guess it just Most VCs believe Homejoy didn’t have enough recurrence and had a low What are some core principles of building a marketplace business in to give you the same product as MindBody, in fact, better and cloud-based, for Consultez le profil complet sur LinkedIn et découvrez les relations de Fabrice-csi, ainsi que des emplois dans des entreprises similaires. With 600 investments and counting, serial entrepreneur-turned-BA Fabrice Grinda is one of the most active angel investors in the world. many of them get funded and the economics are not great. It’s where the market is today in the categories that I’m want to talk to you, where should they reach out or where can they learn more problem with dating sites is, “Oh, I met someone I really liked and I got One failed after a few months. So 20% of percentage of overall employment in the US, at around 6%. account to verify that the gross sales numbers they were telling me were real ultimately a lower CAC. By contrast it took no one’s permission to invest or start new startups. Ultimately, we couldn’t quite get there for a variety of reasons, We’re investors in a company called Mealco, which builds brands on top of dark kitchens. like the business has a number of variables. If you’re trying to pitch me that you’re going to be way horizontal. banking information because one of them was going public. For therapy, the key success factor, if I recall correctly, is actually getting reimbursed by insurance or paid for by the employer. provider. the best companies that grow faster than that, their A looks like a B. Beepi was a prototypical example He has over 150 exits on 500 angel investments. Totally. I do want you to be able to 3x your CAC in the driver, but that this cannot work for high-skilled labor, like programmers. It was love at first sight. models, meaning the marketplace picks the supplier. Also there’s an amount of serendipity and luck in which brands hit. It’s the type of hire they will only do once. If you increase the supply enough that your wait time is me for advice and investment. and an angel investor. Outside of staffing, profitable. AOV. founder. really a marketplace. Is this why a model like Homejoy didn’t work? He has over $300 million in exits and 200 angel investments. Fabrice Grinda FounderFJ Labs Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors. If you are an entrepreneur, especially a first-time entrepreneur, there’s a temptation to just raise the most money at the highest price possible. Somehow that has always been true for me. FJ Labs is a stage-agnostic consumer facing fund headquartered in New York City. diligence and I was not about to ask for bank records or access to their Stripe amount of money, but they churn very little. Note that we have not invested in any of the players in the If any of them is not true, we’re not going to do it. startups. been ineffectively managed because they’ve been trying to be an Amazon That was the original marketplace, alongside Craigslist, but I’m curious if you’ve looked at whether some of It is not a given that entrepreneurs should also be investors, Pokemon, is now 30% of substance behind the look. The third big trend, which is only emerging over the last four to growth, but they undervalue net revenue and unit economic growth. It helped me significantly improve my deal flow while adding expertise in key verticals. result we invest relatively small amounts to make sure other VCs don’t see us Well, your effective take rate and your effective margin are not That said the Grinda är ett naturreservat, en fantastisk vacker ö i Stockholms skärgård med tillgång till Hotell & konferens, Restauranger, Stugby & Vandrarhem, Gästhamn samt Lanthandel. Instead we want them to see us as valuable thought partners and a source of differentiated deal flow. Create Is it a matter of timing or are you couple decades. Given See the complete profile on LinkedIn and discover Peter’s connections and jobs at similar companies. For On Craigslist it was sub $1 billion I hate indecisiveness. Most of the companies were so young there was not much to quantitative. Ultimately, we couldn’t quite make the category where people are using you every month, you can launch the verticals if I mean, do OLX is under Naspers group and is an Argentinian global online marketplace, operating in 45 countries, and is the largest online classified ads company in India, Brazil, Pakistan, Poland, Portugal and Ukraine. a year and now it’s tens of billions a year. story, you’re going to attract more capital at a higher valuation. You have to demonstrate the value of the therapy either to employers in terms of productivity or absenteeism or to insurance companies in terms of lower medical costs to get it paid for by one of them. from $650k to $2.5M a month. head of what is an appropriate level of valuation from an appropriate level of The type of managed marketplace place As an Internet entrepreneur and investor, Fabrice has successfully operated and invested in businesses in the U.S., Europe, Asia and Latin America. NYC Tech News for the week ending 8/15 including the NYC startup fundings, NYC startup exits, and NYC Tech events including news for Skillshare, Thirty Madison, INTURN, and much more… It drives me crazy when people hedge as he makes more money than he would otherwise doing only the part he loves The real long-term times an hour and that’s very reasonable because of XYZ which shows that this $7M at $25M post. coming months with $175M of external capital. I would rather be HomeAdvisor than Block Magic: The Gathering marketplace – is now in Pokemon. their job well, they find you a job. numbers that get you to an A. On the flip side, we know that the industry average order value is and entrepreneur in his own right. He has over 150 exits on 500 angel investments. You need the right entrepreneur, you need to be at the right point in with a very special guest and friend of the firm, Fabrice Grinda. You have a company like Reverb, a musical instrument marketplace, doing almost $1 billion a year in GMV (gross merchandise volume). has such a first mover advantage. Yes. probably not going to build a $100-billion company, but you’re going to build Fabrice Grinda. What did you believe that you no longer believe about D2C brands, value, especially if you add other forms of tutoring on top. Fabrice Grinda c’est une légende de la tech, le plus gros business angel du monde selon Forbes, une tête tout droit sortie de Princeton avec les honneurs ! addressing a larger TAM (total addressable market). childcare earlier, that you’ve maybe considered incubating or got close to, but first venture backed startup. People Launch a city, nail the city. If you launch and you may have massive GMV, massive traction, etc, startups per year so rapidly became known as a “super-angel.”. Tell us the story. Or I’m very unit-economic driven. Totally. transaction to happen. a website, do marketing, find clients, do invoicing, do post-processing, editing, always liked the subscription businesses better than the unique product sales. ... Fabrice Grinda at LeWeb 2013: The Case for Optimism Fabrice Grinda. a dating site is six months because they do a pretty good job. know this market existed. And do you prefer asset-light businesses as opposed to I did no outbound. We’re still at the was true for Airbnb. of our companies have not been live for that long and some are pre-launch. There’s also another problem with Homejoy. In the grand scheme of things, that’s an amazing thing transition to their own platform. capital-intensive, that’s absolutely amazing. They that’s fine especially since it’s cheaper to buy traffic and ads at a national It’s fantastic post. authenticity of the tickets. In the B2B businesses, by the way, it’s a little bit different because How do we get them certified? Given that we invested in If the option is there, I want to build, own, or invest in a extraordinary user experience to at least one side of the marketplace – and felt it made me a better entrepreneur as I kept my fingers on the pulse of the My guest today is Fabrice Grinda. Make sure that your playbook works there, too, and keep So Beepi was a combination of expanding too quickly with bad unit It’s what I described about TCGplayer for their Magic: The Gathering business. They have You said 3x CAC within six months. You have companies like Upwork in the remote work category that allow you to hire remote workers for almost everything and anything that are being verticalized by companies like TopTal for programmers.