Invest Like The Best
Episode 276 Building & Investing in Marketplaces
Invest Like The Best

Episode 276: Building & Investing in Marketplaces

Invest Like The Best

Episode 276

Building & Investing in Marketplaces

Jeff Jordan is a General Partner at Andreessen Horowitz. We cover how to build and invest in businesses that create consumer marketplaces, the importance of healthy communication between founders and investors, and the unique aspects of the Andreessen Horowitz business model.

This episode is brought to you by:

Canalyst. Canalyst is the leading destination for public company data and analysis. If you're a professional equity investor and haven't talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalyst.com/Patrick

Lemon.io. The team at Lemon.io has built a network of Eastern European developers ready to pair with fast-growing startups. We have faced challenges hiring engineering talent for various projects - and Lemon.io offered developers for one-off projects, developers for full start to finish product development, or developers that could be add-ons to the existing team. Check out lemon.io/patrick to learn more.

[00:02:48] - The notion of perfect competition in marketplaces

[00:04:31] - How to build a marketplace while thinking about perfect competition

[00:05:32] - Promoting price discovery at eBay

[00:06:52] - Features of a marketplace he focuses on 

[00:08:38] - Best way to do lead generation 

[00:10:20] - Red flags for marketplace businesses 

[00:11:00] - Major business lessons learned while at Disney 

[00:12:10] - Learning to be an operator while at eBay; Leaving It All on the Field

[00:14:45] - How he got hired at OpenTable

[00:16:22] - Taking OpenTable public and being its first public company CEO

[00:17:44] - What they did well in financing OpenTable

[00:18:54] - Communications between company leaders and its investors 

[00:19:45] - Going from operator to investor

[00:22:08] - Lessons from the early years of becoming an investor and pricing companies

[00:24:12] - Power of network effects on a startup

[00:26:56] - Healthy tensions inside of a network

[00:29:23] - When the supply side is the more difficult part of the equation

[00:30:27] - Characteristics of founders when it comes to marketplaces

[00:33:30] - The importance of being a perpetual learner as a founder

[00:35:36] - When he starts focusing on unit economics and margin profile in a new marketplace

[00:37:45] - Increasing convenience for a buyer as a business strategy 

[00:42:14] - Categories that could use better marketplace solutions

[00:44:36] - Layers of growth inside a business

[00:50:26] - Lessons with the unique business model of Pinterest

[00:52:03] - Unique aspects of the Andreessen Horowitz business model

[00:55:54] - Finding and recruiting talented general partner investors 

[00:57:37] - The morning basketball game and community strengthening

[01:01:36] - Defining great mentor relationships

[01:04:54] - Kindest thing anyone has done for him

[01:06:05] - Lessons from his parents

Building & Investing in Marketplaces

Introduction

Patrick
Our guest today is Jeff Jordan, general partner at Andreessen Horowitz. Jeff has one of the most interesting set of experiences of the guests that I've had on the show. As an operator, he has been the general manager of ebay.com, president of PayPal and CEO of OpenTable. As an investor, he was one of the first general partners in Andreessen Horowitz and sits on the board of Airbnb, Instacart, Pinterest, and other notable firms. Given his vast experience, he is the firm's go-to expert on all things marketplaces, which is the common thread in our conversation. Please enjoy this great discussion with Jeff Jordan.

A Primer on Marketplaces

Patrick
Jeff, I really struggled as I was reviewing our research before our call today on where the hell to start with you. We've got such a wealth of stuff to cover. I think marketplaces is such a common theme through your career that it would be a fun place to start, both because you've got so much operating and investing experience in this area. The place that I've chosen as an on-ramp is your notion of perfect competition. I think it's a really interesting idea that I'd love you to explain to us as an excuse to talk about all facets of marketplaces building and investing.

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