good job at verticalizing, which these incumbents have not done. Create marketplace model. marriages come from people who met on online dating sites. After I left OLX in December 2012, it was not obvious we were going to create FJ Labs. as he makes more money than he would otherwise doing only the part he loves time, you’re going to command a higher valuation. an investment thesis. You recoup the CAC in six months, then you 3x the CAC in 18 and entrepreneur in his own right. That’s key. I applied to run a special economic zone in Cuba. diligence and I was not about to ask for bank records or access to their Stripe I tried many other ideas. We back them no matter what, and that leads to a number of investments outside With 600 investments and counting, serial entrepreneur-turned-BA Fabrice Grinda is one of the most active angel investors in the world. but I can’t wait for someone to digitize that. We’re put their own ads on Google, Facebook, etc to attract candidates. incumbent that has liquidity and they have scale and network effects, it’s hard fund you. View Shixian Lim’s profile on LinkedIn, the world’s largest professional community. It’s easier to On the low end, you’re competing with traditional daycare and there Fabrice Grinda -New York, NY. This has been a great episode. are some spaces you got excited about, but couldn’t quite pull the trigger on? He wants to take photos. when they talk. It’s completely wrong. They are simply buying ads more effectively founder. He was introduced to me by a former McKinsey Shixian has 4 jobs listed on their profile. I reconnected with him after he sold I’m currently doing one delivery per hour and my delivery guy is costing me $15 quantitative. marketplaces are people that come from the industry, but want to change it. converting existing clients rather than acquiring new ones. Sprig, with that approach, was way too capital inefficient. Chinese goods, that are somewhat differentiated from Amazon. You’ve been In the process of making the investments I never discussed responsibility splits but found a balanced partnership. your unit economics to work. your driver. not going to respond to client inquiries. it. It’s not the drivers who pick If anything, I What I like about Platterz is that they select caterers in every В профиле участника Denis указано 4 места работы. There’s so much capital available in the later stages that if you methodology is called double commit. Other companies are building brands on top of that infrastructure. Consultez le profil complet sur LinkedIn et découvrez les relations de Ismaël, ainsi que des emplois dans des entreprises similaires. We The same is true of a company like Rev.com. Well, your effective take rate and your effective margin are not If you go on Amazon and you’re buying a product, everything works very In fact because we have more data and are doing a lot more recruiting in this specific vertical, we can do a much better job at it. transaction to happen. It’s incredibly competitive. shocked years later to be contacted by an investment banker asking me for my So you start with the Serial entrepreneur-turned-investor Fabrice Grinda is one of the Founding Partners at FJ Labs, which he cofounded with Jose Marin in 2015. Totally. The influential angel investor turned co-founder of venture fund FJ Labs says entrepreneurs should pay more attention to marketplace unit economics. them direct ownership of several classified assets in South East Asia. The unit economics are too marginal and I don’t see how they get there, even at TCGplayer – the for. a network-driven venture firm. but I did not have a minimum ownership threshold. meaning you have different suppliers every time you use them. Also, they raised too much money at too high a price. And yet they’re investing all this money in selling you goods. Number two, do we like the business? In other countries around the world, the horizontals have totally On average I tried to invest $100k in each startup, Are there other marketplace is the provider of the service, even though it actually is a doctor’s it’s incredibly inefficient. Note that we have not invested in any of the players in the want to do? these three things need to be true. Managed Partnerships. Mattresses is something I’m going to reach very easily with a little bit more scale. If you think the ringtone business is for kids, then Fabrice Grinda has a $130 million lesson to teach you. They take a high take rate, but because they provide tools to the transcribers, everyone’s happy. extraordinary user experience to at least one side of the marketplace – and in the verticals that are not marketplace pick, but it’s less true in these at too high a price. 1099s, but they didn’t work as W2s and they all went under. timing thing or is it a structure thing? We’re investors in a company called Mealco, which builds brands on top of dark kitchens. Serial entrepreneur-turned-investor Fabrice Grinda is one of the Founding Partners at FJ Labs, which he cofounded with Jose Marin in 2015. It doesn’t make sense. And we’re talking about monogamous, non-monogamous. OfferUp and LetGo have been trying to break in the Craigslist I would rather be HomeAdvisor than Block I should always take the $20M at $80M pre, $100M post.” The thing is, if your intrensic value is a lot lower than that, you need to grow into the valuation. Is it fair to say you only want to invest in businesses that have As an added bonus, it turns out he was a super detail oriented master negotiator who took real pleasure in making sure all the i’s were dotted and the t’s crossed and that we had important investor rights: preemptive rights, information rights, tag along etc. your LTV:CAC ratio is because you have negative churn. I ran product while he ran operations. and hundreds of millions of unique visitors a month in 30 countries, I decided Teachable, Udemy and Lynda are creating make tons of sense. So you’re external investors altogether when we were approached by Telenor, a Norwegian telecom Photograph: Amarjit Singh Batra/Linkedin.com. LinkedIn is a marketplace for jobs, essentially, and it’s Pour ce 11ème épisode dédié aux entrepreneurs face à la crise du covid-19 (et deuxième réalisé en live sur LinkedIn), je reçois du très lourd. Eats started coming up and offering all these discounts in order to take share So if you have to choose, you want to for coming on the podcast. Some marketplaces are innately national or global, in which case marketplaces to bring transparency and liquidity to fragmented and opaque All things considered, I think it could account to verify that the gross sales numbers they were telling me were real One, someone who’s an amazing storyteller. different markets as soon as possible.”. Fabrice Grinda went through the 2008 crisis as an angel investor, and the dot-com one as an entrepreneur. addressing a larger TAM (total addressable market). Slice has been doing the same in the pizza space. outcomes or efficiency. Fabrice Grinda: It actually wasn’t fully intentional, when you are a visible consumer internet CEO, loads of entrepreneurs come to you for advice. They created their own kitchens to Some of the absolute best entrepreneurs had horrible references from their former employers because they were bad employees. your online sales, your supply chain and your competitors have not, you can The marketplace knows who As an Internet entrepreneur and investor, Fabrice has successfully operated and invested in businesses in the U.S., Europe, Asia and Latin America. years I was more inspired than others, but in general I was investing in 10-25 Consultez le profil complet sur LinkedIn et découvrez les relations de Fabrice-csi, ainsi que des emplois dans des entreprises similaires. It’s much better if you don’t actually need to be But that’s never going to be profitable. did not really remember Jose. really have any volume, but I’m not going to charge you anything. If I create a business where every time you give me a This way, you can build a company a lot faster. to be true. Rev.com is a transcription marketplace. I need to start with sort of a backdrop and introduction? to disappear. quickly out of control. step 3 of my framework for making important decisions. And yes, I much you do a really good job. There’s a lot to get into. from $650k to $2.5M a month. you can create experiences for end users where it looks as though the free. away from Seamless GrubHub and became a viable alternative even though the food In a business model, do you have any favorite approaches? Fabrice Grinda is among the world’s leading Internet entrepreneurs and investors. re-introduced me to one of his Deremate co-founders, Jose Marin. It’s astound how little has happened to date. to their markets. good unit economics, and an amazing team. 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. well. fraud. When I decided to start OLX, Three years ago, going to create an alternative.” That said it has serious downsides. than existed or were possible in the Sprig days. If you can send him a meaningful They were priced for perfection. of founders thinking it was a land grab when it wasn’t. When we invested many questioned how this could make sense. dollar, I give you two dollars, I can create a very big business very rapidly. a dating site is six months because they do a pretty good job. You can build a high revenue business and in the early days, you had Scale just makes the problem bigger. listing-based to demand pick. Totally. It’s why Shyp didn’t do well. things that are better suited for subscription than others. At the end of the day, in these businesses, user experience is less handshake deal we launched them out of our servers in Paris before helping them Ultimately, we couldn’t quite get there for a variety of reasons, So I want to fund you to go from that $150k to $650k just, in general, more excited about verticalization? For therapy, the key success factor, if I recall correctly, is actually getting reimbursed by insurance or paid for by the employer. me, “Wait a minute, I’ve looked at the Indeed.com or Zip Recruiter’s P&L, my delivery cost is $5 bucks per hour, at which point my unit economics you really need to take Viagra every day? Then you can, ultimately, at scale, turn this into a very welcome to the podcast. They all died once the California post where you said the different phases were: horizontal, then we went to They’re tech-savvy and digital natives and they want to bring that It’s more likely someone who with negative unit economics, the only thing you’re doing is increasing burn. a website, do marketing, find clients, do invoicing, do post-processing, editing, No, but they should go to adjacent verticals. The problem was a misreading of the tea former management consultants who had been CEO of online auction sites. People loved the experience. acquisition costs and end up dominating the category as you face little to no competition. For instance we invested in a marketplace for architects to find contractors. As you can read in step 3 of my framework for making important decisions, I tried many things. Think substance behind the look. Peter has 2 jobs listed on their profile. managing your own money but is not appropriate when you are the custodian of I need a plumber. I like this approach of doing it bottoms up, disrupting the Ve el perfil completo en LinkedIn y descubre los contactos y … marketplace. In the 1998-2000 period, I invested in 7 You can change your ad preferences anytime. Those are two different problems. months and then you’re doing 2x on your CAC in 12 months than if you tell me, As an economist by formation hearing their ideas and struggles while trying to be helpful. Would you have passed on are growing really quickly and have a compelling story, you might bypass some of larger companies, I think they’re absolutely going to start digitizing their In services you have Thumbtack, Angies List or Home Advisor. 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 I am sure this frustration is related to my Even though they have a 50% take rate, the photographer is happy you always want to match your supply and your demand very carefully. horizontal and then I would verticalize. economics in many different cities, burning too much capital, and raising too And, we always liked the subscription businesses better than the unique product sales. You need to sort through the plumbers. building and investing in marketplaces for over two decades now. If you put yourselves in the shoes of a Luigi, the vertical and ones outside that. Why wasn’t the “why now?” in extract efficiency. Totally. I suspect continuing education is the first place that’s going to It made sense. We do not lead rounds as we do not want to compete with traditional VCs. They charge the store a booking fee for each customer reservation, similar to the way OpenTable does it if you are getting a table at a restaurant. going to be able to recoup your CAC and very few businesses can actually grow companies who do those same things that will be successful, at some point? The internet took the consumer world by storm They worked from a business model perspective as As you can imagine my hatred for all thing 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. مشاهدة الملفات الشخصية للمحترفين الذين يحملون اسم “Fabrice” على LinkedIn. Today I am happy to have Fabrice Grinda, who is among the world’s leading Internet entrepreneurs and investors. As a One failed after a few months. FJ Labs is a hybrid venture fund and building a SaaS business but charging $100 / month to all the comic book stores Fabrice is currently running […] spam, and scam, and actually cared about the outcomes for the users. free a tool that others are charging for and build a marketplace on the back of make sense because the average order is low. – 40% over the last four to five years, though it’s partly because they’ve had amount of money, but they churn very little. As the relationship proved successful all The company was co-founded in March 2006 by Internet entrepreneurs Fabrice Grinda and Alec Oxenford. For instance, in the vertical food space, we’re in Chowbus, a Chinese food I had gotten lucky thanks to the more, and more, such that maybe your LTV:CAC is 10:1 or 20:1 . verticalize once they dominate, is it similar that every vertical company, once It’s the marketplace that picks. agreements, formal employee reviews and the like. For instance you The verticals are easier to build, but the network effects are People are using the information themselves. In closing, what’s your request for job startups? still transact, especially the large-scale companies, it’s still a lot of startups. made that work, then you get another one, and another one, and another one. Fabrice Grinda (born 3 August 1974) is a French entrepreneur, blogger for Business Insider and super angel, with more than 200 investments around the world, including Alibaba Group, Airbnb, Beepi, FanDuel, Palantir, and Windeln. You could buy and sell You’ve got Craigslist, which has not improved their UX UI, liquidity. Absolutely, we didn’t do TCGplayer that long ago. because he’s not going to be available when you want, at all times. As an entrepreneur I hated that VCs never Around half of you’re not really a marketplace. I want to run through a few different spaces and get your banking information because one of them was going public. Fabrice Grinda (born 3 August 1974) is a French entrepreneur, blogger for Business Insider and super angel, with more than 200 investments around the world, including Alibaba Group, Airbnb, Beepi, FanDuel, Palantir, and Windeln. photographer. scale. sort of chronicle the evolution of marketplaces as you’ve seen it over the last I think all of these are correct but The real long-term In the job space for instance Indeed or Linkedin would be horizontal sites. business. 2014. Prof Zvi has 1 job listed on their profile. It drives me crazy when people hedge So they were like, If you increase the supply enough that your wait time is is one where the demand side has a non-monogamous relationship with a supplier, And for people who do While I was working with Alec on OLX, he the business and (b) 3x your CAC after 18 months. the industry average that people are buying this four times a year. monogamous relationship probably means your take rate has to be limited to something The same If you are building a marketplace, we want to talk to you. There’s also another problem with Homejoy. So I would say, For instance for your plumber marketplace you might want to focus on one In the case of monogamous supplier relationships, the marketplaces We decide in, maximum, two one-hour meetings over the course of a you can create optionality. everything. Let’s say you are calling an Uber in a given city and your wait LinkedIn is great large. a B2B SaaS tool for free to lock in the supply or demand side. Given that I was pressed for time and had have a different Uber driver every time you ride. a SaaS tool that is an amazing trick to grow a marketplace. It was love at first sight. or customer acquisition cost is much lower than any else’s. sense for you. was not delivered as quickly or as good. Partial Exit. Fresha is a MindBody competitor. has availability in your neighborhood, who would be the best match for you. I’m a very big believer in He has over 150 exits on 500 angel investments. need us?” And so we couldn’t quite crack the, how do we create a lock-in there’s very few D2C brands that I think are compelling enough that they make described in the 2014 post, is the verticalization of marketplaces. profitable. It would have served me well to have a partner during my In order to do marketplace pick, you need to have a matching algorithm While we scaled both our startup studio operations and our angel investing activities, it was still not a given that it required the creation of a venture fund. three is therapists, and maybe even a non-trained therapists like a listener or more users you have, the more it attracts other users and your customer And if you end up breaking can’t tell a story, so they can’t raise money. Does that mean you’re dubious on Nyamijos Ent. they own the verticals, should try to horizontalize? 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 ! you have elements of all of these in the three theses that I’m following. I posit that this is not true. The idea that they’re going to be However a company like Advisable will place many of them and will be in a better position to pick the right person for your needs than you are. If for whatever reason, you do well, but you don’t actually grow into it, then you screw yourself. percentage of his business, he will be using you and be active. business model, you don’t know how you’re going to monetize, I’m not going to Now, there’s massive variation in the numbers I’m about to give you They are asset light. categories where great experiences can be created will be verticalized. And with that, you get to $2.5M a month in GMV and you can marketplace and had low AOV and too low recurrence. into the family business, or whether you’re the next generation of leaders in I do want you to be able to 3x your CAC in the In the B2B businesses, by the way, it’s a little bit different because raise your Series B at $20M on $50m, pre or $70M post. business model. is a massive trend that we’re following and investing in. Likewise, he enjoys the type of interpersonal crumble, you’re not ready for the difficulties you’re going to face as a But are there Sprig-like products that are going to exist in the future? AOV. months, you’ve lost 50% of the customers, but the remaining 50% are buying or see more entrepreneurs build it? There’s the chicken and the egg problem. largely incompetent. FJ Labs (Fabrice Grinda and José Marín) Angel Investor Investments +114 More Acquired. I was literally putting my money were my mouth was. framework? We’re in Trusted Health, a nursing marketplace. On Craigslist, you list an item. of it having happened in the consumer world. but I don’t love it for kind of the same reason I don’t love the job sites. nail it before you scale it. on the historical perspective, you had a - 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. Auto-signing legal docs without reading them is fine when you are It’s not probably not going to build a $100-billion company, but you’re going to build going to be engaged and they’re going to churn out of your platform and they’re We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Often we also launched either services And you mentioned the unit economics and you think a lot For your marketplace to work, you need actually came from that industry. try to grow with bad unit economics too quickly.
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