17 giant marketplaces, one starting move: knocking on doors

Hi, it's Sharan.

70 percent of the biggest marketplace companies started in one city. 80 percent built the supply side before they touched demand. And the number one channel for that first supply wasn't ads or SEO. It was direct sales, on foot.

Those numbers come from Lenny Rachitsky, who spent seven years at Airbnb and then interviewed founders and early growth people at 17 of the biggest marketplaces. DoorDash, Uber, Lyft, Etsy, Instacart, OpenTable. His talk on it is a few years old now and I still haven't seen a better dataset on how these companies actually began.

Some of the detail is almost funny. OpenTable's team walked restaurant to restaurant with their hardware under their arms. Uber found its first drivers on Craigslist. Airbnb signed up New York hosts one at a time and sent people to photograph the apartments. Rover stayed in Seattle until the model worked. Instacart launched in cities with bad winters, because nobody walks to a grocery store in a Chicago January.

The easy take is that these were scrappy hacks the companies grew out of once funding arrived. I don't think that's what the data shows. Out of twelve possible growth levers, the average company in Lenny's research used two and a half. The winners didn't try everything. They picked one city, signed supply in person, and repeated that until the market started feeding itself. Word of mouth, the channel that carried demand for nearly all of them, only shows up after those visits.

If you're building a delivery startup, this is good news. The early game was never won with money. Airbnb's first three years were flat, and what broke the flatness was host meetups and door knocking. Both are available to a founder with a small budget and one neighborhood.

So the question I'd ask about your own launch plan: how much of it is the stuff on Lenny's list, and how much is ads, because ads feel less awkward than walking into twenty restaurants?

That's also why Enatega exists in the shape it does. The app is the part you can buy finished. The twenty yeses in your neighborhood are the part nobody can do for you, and that's where your months should go.

One ask this week. Reply to this email with the city you'd launch in and the neighborhood you'd constrain it to first. I read every reply, and I'll tell you honestly whether I'd pick a different zone and what I'd do there in the first month.

And if you're new here and want to see the finished app I keep talking about, it's all at enatega.com.

Talk soon, Sharan