In this episode of Beyond SaaS, Jason Niedle interviews Sjoerd Handgraaf, CEO of Sharetribe, discussing the critical role of positioning in startup success. Sjoerd shares insights on decision-making, the importance of understanding product-market fit, and strategies for growth in the marketplace sector. He emphasizes the need for startups to focus on constraints, learn from failures, and adapt to changing market dynamics. The conversation also touches on the significance of community and content in supporting entrepreneurs.
Takeaways
- Decision-making in business is often like poker, not chess.
- The quality of a decision is independent of its outcome.
- Startups should focus on a constrained market to ensure liquidity.
- Product-market fit is not static; it requires ongoing effort.
- Understanding customer language is crucial for effective positioning.
- Community and content can drive engagement and retention.
- Internal constraints can limit growth potential in startups.
- Successful marketplaces often share similar features and mechanics.
- Learning from failures is essential for growth and adaptation.
- Positioning should align with the company’s mission and customer needs.
Sound Bites
“You can launch something in a day.”
“You need to take that shot.”
“You have to constrain it.”
BeyondSaaS Transcript
Jason Niedle (00:00)
Today we’re talking with Sjoerd Handgraaf, CEO of Sharetribe about how positioning can save your startup.
Welcome to Beyond SaaS. I’m Jason Niedle, founder of Tethos. We solve growth problems for tech companies And we’ve taken what we’ve learned from amazing leaders and compiled those tips, tricks, surprises, book choices into a hyper growth playbook, which you guys can grab at tethos.com/podcast.
Today I’m really excited to talk with Sjoerd who is in Helsinki, Finland. So thank you for staying up so late. He is the CMO of Sharetribe, a customer funded online marketplace platform. And Sharetribe helps founders build successful marketplaces with their mission to make marketplace technology accessible to everyone. Their platform supplies flexible technology for almost any business idea to match buyers and sellers. And this is cool because I looked at it and it has
rentals and services and products and other marketplaces like classifieds and job boards, things I just haven’t seen anywhere where you can actually go and it’s flexible enough to build everything. And Sjoerd also hosts the acclaimed Two-Sided, the Marketplace podcast. So hopefully you’ll tell us a little bit about that. And he regularly writes what he calls opinions disguised as observations, helping Marketplace founders launch, iterate and scale their businesses. So thank you so much, Sjoerd.
Sjoerd Handgraaf – Sharetribe (01:16)
Thanks for having me. Thanks for having me.
Jason Niedle (01:18)
And I appreciate you staying up late and letting the kids go to bed on their own.
Sjoerd Handgraaf – Sharetribe (01:21)
Yeah, yeah, that’s not a, they should be going by now. Luckily there’s someone else in the family as well who can handle that. That’s the pleasure of doing business for mostly US market from Europe. This is one of the things that comes with the job.
Jason Niedle (01:33)
You’re used to it. Do you have a quick tip for our listeners today?
Sjoerd Handgraaf – Sharetribe (01:36)
I do yeah, we all have these massive book lists of what you should read and we’d go and read them. I was thinking, which ones are the ones that really have made sort of a meaningful change in my life or in my behavior that’s business interest?
And for me, like one of them is called this book called Thinking in Bets by Annie Duke, a former poker player. And I think the subtitle, I’m paraphrasing probably, but it’s like how to make decisions with incomplete information or something like that. And that is, the point is that basically often like business books, they talk as if decision-making is like, some kind of chess where, the pieces and this is what you need to do. And she makes actually a really wonderful argument saying that it’s more like poker because never, especially in startups and SaaS businesses,
Jason Niedle (01:59)
Hmm
Sjoerd Handgraaf – Sharetribe (02:14)
you’re always working with incomplete information. So it’s not about knowing the best set of steps that you need to do or moves that you need to make, but rather like being aware of what you don’t know and being aware of how you make the decision and then come back to it and learn from it. where the decision, the outcome of decision might, doesn’t actually say anything about the quality of the decision, which I think is a really
Jason Niedle (02:17)
Mm.
⁓
Sjoerd Handgraaf – Sharetribe (02:37)
really
healthy way of looking at your marketing, for example.
Jason Niedle (02:40)
The outcome of
the decision doesn’t have anything to do with the quality of the decision. I love that.
Sjoerd Handgraaf – Sharetribe (02:45)
Exactly,
Yeah. the book starts with this apparently some famous maybe Super Bowl final or something where a coach did a particular strategy that didn’t work out and people were like, why did he do that? And then she said, well, actually looking at the odds, he had done it 50 times before and it had worked 42 out of 50 times. So.
why wouldn’t he do it? It was the best option with all the information available. And I think that’s just such a lovely, I don’t know, like that’s just something that I didn’t learn in business school or whatever. For example, one thing that really sticks and that I do a lot with the CEO is it’s this little trick that she teaches, like, would you put money on this decision? So if you say like, you you think about certain strategy or whatever marketing campaign, will we do this or will we do this?
Jason Niedle (03:06)
Mmm.
Right.
Mmm.
Sjoerd Handgraaf – Sharetribe (03:29)
Okay, if you would have to put like $1,000 of your own money on which one would you put it? And it’s as silly as it sounds, it is just enough of a sort of check that like brings some clarity. Yeah, yeah. So that’s my tip.
Jason Niedle (03:38)
It’s a tiny shift, but I see how it could actually work. Yeah. Because a lot of
times, so I have this problem in my business too. A lot of times when my rewards are greatly deferred, I’m not very motivated by them. But when I can say like, okay, if this happens, then I reward myself now or tomorrow. And for me, it almost has to be within a week or it doesn’t matter. But that little trick helps me a lot. So I could see how the like, would you take money out of your pocket right now and bet on this?
Sjoerd Handgraaf – Sharetribe (03:49)
Mm-hmm. Mm. Yeah.
Yeah, yeah, exactly. Yeah. Yeah. And it’s like, it just helps it. And we can be, you know, something can fail, but you can still be, especially if you sort of are aware of what you didn’t know at the time, you can sort of map out, actually, now I do know, like this thing that I didn’t know, I do know. So for example, I can actually give an example, I don’t know how long we’re going to hang on this topic, but something that I just did very recently, like, from a growth perspective is that we started reaching out to software agencies.
Jason Niedle (04:22)
You’re okay?
Sjoerd Handgraaf – Sharetribe (04:30)
Because we are essentially a software platform. We initially always focused on people who are not technical or who have this sort lean startup approach, so they don’t want to do a lot of coding upfront. But over time, as a lot of our customers have matured and our product also has matured and our business has matured, we have gotten bigger customers in who sometimes use software agencies who then sort of work with our API, etc, etc. And so we were like, hey, maybe we should go out to them.
We did a of a campaign on like, okay, let’s try to get in touch, a cold email campaign, like what many people do, try to get in touch with them, try to get them on a call. And while the reception is always very enthusiastic and they’re like, this is actually really good. We could use this. The thing is that most agencies, they have maybe one in 10.
maybe one in 20, depends a little bit. Not all of them is a marketplace idea, like not a two-sided idea. So they’re not really interested until they have a customer that do it. And it becomes really hard sell the product. We weren’t looking for any payment or whatever, which is more some kind of like partnership or whatever you want to call it. And I think this was just something that we hadn’t sort of realized that, okay, this is not most of these agencies, they’re really
living by today. So if they don’t need it now, then just getting the sale or getting the deal or getting the partnership is not like, yeah, it’s just hard. even people who are like enthusiastic on the call, sometimes they’re like, yeah, just send me the thing and I’ll send it back. And then they would just ghost and it’s like, okay, well, this is just like, we had just grossly overestimated maybe their interest level.
Jason Niedle (05:44)
Mm.
So it was
the right tactic and was the right decision, but you didn’t know what you didn’t know.
Sjoerd Handgraaf – Sharetribe (06:06)
Yeah, I mean, in retrospect, this is not groundbreaking. We could have maybe come to this conclusion, or like thinking that is probably the case. But then we still probably would have done it like just to try because why not learn it.
Jason Niedle (06:16)
I wonder too,
like you’ve opened the door with them, so I wonder almost if you, because you say give first, ask later is something that you’ve talked about before. And so I wonder if with those people, if you were supplying that information on how to build marketplaces or what the key factor elements are, and then they’re getting your content for a long time, but you’ve already opened the door with a warm call or something like that. Then when the time does come and that one in 10 pops up, you’re there.
Sjoerd Handgraaf – Sharetribe (06:23)
Yeah.
Yeah, that’s why I don’t maybe add that’s a good point. And that’s also how we’ve sort of like written it off. There’s like, hey, they now know about us. They didn’t know about us before, mission accomplished in that way. But I think we were looking for maybe a little bit, a little bit more. But, but yeah, I think looking back at how we made this decision, it’s still, I still stand behind it. It was the right thing to do, right bet to make.
Jason Niedle (06:51)
Yeah.
Cool. Well, tell our listeners a little bit about Sharetribe.
Sjoerd Handgraaf – Sharetribe (07:03)
Yeah, so with Sharetribe, we are marketplace software for founders. We help people who have a marketplace idea, commonly known as the Airbnb for X or Uber for X idea, where you have many parties fragmented on one side, many parties on the other side. If they have a business idea with those characteristics, we have a platform or we have the software for them, which we think can build a platform. And when I say them, I mean literally anyone.
Anyone who’s ever done something on the web, ever opened a blog, or is not that technical, can use our No Code Marketplace Builder to get a really comprehensive marketplace with payments, user management, listing management, reservations, everything working literally in a day. You probably want to spend a little bit more time on customizing it, and we have a 14-day free trial, so you can actually take that time.
But also, if you do want to use code, it’s an open sort of set of API. So you can pull in whatever you want if you need external data or if you want to connect another CRM to it or stuff like that. You can extend it infinitely. And we’ll handle all the scaling. So if your idea is success, takes off. You can build whatever custom feature you want on top of what you already have. And we’ll handle all of the scaling and performance and those kind of things. And we’ve had a couple of really nice customers who have been
gone through that journey that I’m just describing. So it’s not just, it’s not just marketing speak.
Jason Niedle (08:18)
Very cool. And you explore that all the time on your podcast. Tell us a little bit about the podcast.
Sjoerd Handgraaf – Sharetribe (08:22)
Yeah, so the podcast, because what you referred to earlier, give first, ask later, indeed, like that’s what we we try to do with all of our sort of marketing slash content management because that’s not that’s it’s part of marketing. It’s also part self-serving because we basically help people build their startup if it happens to be a marketplace idea.
And so you can imagine that there’s a lot of sort of natural churn in our product, right? Even if our product would be the best in the world, which of course I think it is, their idea might still fail and they would churn. And we realized like seeing that it takes a lot of, marketplace or this particular kind of business, essentially you’re building like two businesses, like one for the demand side, one for the supply side.
We all know people who are great at the idea phase, not so good at executing. So we try to sort of support them with everything that a founder needs. And part of that is we try to give them everything that we have learned from helping like thousands of founders launch their marketplace.
Jason Niedle (09:17)
That’s
amazing, right? Because you have a massive base of knowledge that no one else might have.
Sjoerd Handgraaf – Sharetribe (09:20)
Yeah, exactly.
We’ve seen a lot. And then what we haven’t seen, and there that’s where the podcast comes in, I go and ask, same as you do, people who work in the industry. I’ve interviewed people like founder from Kickstarter, one of the founders of Kickstarter, Lenny Rachitsky who hopefully most people hiring growth know, who was very early at Airbnb, I to Casey Winters on the podcast, who was at multiple two sided platforms like Grubhub, Pinterest, ⁓ Eventbrite, whatever.
Jason Niedle (09:35)
Mm.
Yeah,
Cool.
Sjoerd Handgraaf – Sharetribe (09:47)
And
we try to sort of, you know, uncover what’s the formula to a successful marketplace and then share that with our customers and aspiring customers. also, actually one of the things that we do with content marketing is that it should be usable by anyone. So you can use all of our stuff and never touch a shared product. Of course, we would like you to, but sometimes it’s not a good match. So we try to just deliver that to the world. Like it’s not a customer exclusive podcast. Anyone can find it and
join us in our journey on discovering what makes Marketplaces successful.
Jason Niedle (10:16)
I love that. I have a listener who runs a music studio and I’m like that has nothing to do with AI and SaaS, but she likes the topics. So yeah, it’s great that it can be universal, you know, that you can, can make these learnings as a way to grow your business.
Sjoerd Handgraaf – Sharetribe (10:21)
Hmm. Hmm. Okay. Yeah, yeah, yeah. Yeah. ⁓
Yeah, and of course, just like now, like in this talk, hopefully also, there’s always something that is like goes out of the space that you’re talking about and can be applied somewhere else as well. yeah.
Jason Niedle (10:38)
So you had mentioned earlier, actually I think this was in one of our emails beforehand, that you lost product market fit and found it back. Tell me a little bit about that.
Sjoerd Handgraaf – Sharetribe (10:49)
Talking about things that you sort of realize like after many years working in this space is that this is sort of recent learning that product markets fit like the way it’s usually described is that it’s some kind of like sequential journey. So you do this, you have your idea, if you follow the lean startup approach, like you have your, you go out, you build an MVP, you validate it.
You adjust, you get the feedback, etc. And then at one point you hit product market fit and then you’re, you know, it’s up in a way like it’s going from that. Yeah, exactly. And then you go into step scaling. And something that I just sort of learned ⁓ from our own experience and from, reading other things, but what I in retrospect sort of saw happening in our own experience is that it’s not a static way of being.
Jason Niedle (11:19)
And you’re done, it’s magic.
Sjoerd Handgraaf – Sharetribe (11:36)
One of the Reforge people, Ely Lerner, I want to say, but he calls this thing the product market fit treadmill. So you reach it, but at that point, you just already have to do work just to stay in place because the product and the market are both like sort of dynamic entities. And so
things can change in the market. Yeah, no, exactly. Like the most glaring example that we see now is that, know, AI is changing everyone’s market. And so what has worked before…
Jason Niedle (11:53)
Especially now. Yeah.
You almost can’t be
a SaaS product without saying that you somehow have AI in your product anymore, otherwise no one’s like, well, who are you without AI in your product?
Sjoerd Handgraaf – Sharetribe (12:10)
Absolutely. Yeah, absolutely. I mean, the market in that way is not even sometimes a rational being, right? Like why like there are sure there are SaaS businesses, why would we even need AI, but people expect it and what people expect it like the table stakes determine what is the market. And if your product doesn’t, change accordingly, then you lose it. And so I think we had that. So the very first product that we had in 2011
Jason Niedle (12:15)
Hmm.
Sjoerd Handgraaf – Sharetribe (12:34)
more like a WordPress kind of thing or like Squarespace for marketplaces, like very quick set
but it had some limitations and especially once people got successful, they needed some custom feature, which we simply didn’t, there was no sort of like, there wasn’t the flexibility that we have in our current platform. So we couldn’t offer them that. So on the one hand, like I said, natural churn loads of people leaving.
And then the ones that got successful, were also losing them because they were starting to build from scratch, after having proven their idea with them. And for a while that was still like, I think fine people, but like the product was good enough and know, growth was really great for a couple of years. But then at one point it sort of slowly flattening. So churn went up, acquisition went down and, and in retrospect, I feel that, yeah, like expectations had gone up. Like, and not that we were lazy on the product, we were just not adding the feed, like I think the demand for features just
Jason Niedle (12:57)
Yeah.
Hmm.
Mm.
Sjoerd Handgraaf – Sharetribe (13:24)
was faster than what we could add or maybe not the features that people were, not all people at least were looking for. So I feel that that’s when we lost it. And then we built this, this is like the third version that is out now. We lost it in 2024.
Once we get that old product run, we tried to build this product which was a fully API based, but then we ran into the problem that actually you do need to be technical to take it into use, which is also sort of like, we lost that part of the audience. We tried, selling those two products at the same time for a little while, which is extremely confusing for customers. And then we built this, we were like, okay, we need to combine these two. Like we need a no code product that can also take code, can also be customized, does not get in the way.
Jason Niedle (13:49)
Mm-hmm.
Mm.
Sjoerd Handgraaf – Sharetribe (14:08)
And that’s this product that we launched in 2024. And since then, I feel we have really found it back because we, before we got that out, had sort of two years, which were like flat to decline growth. Like there were some horrible quarters in there and we was building this new product waiting for it to go out. It was not a lovely time. we had tried to be like a positive company, like respecting people’s time. We weren’t doing
extreme overtime we know the software development is hard like there’s no point putting artificial deadlines in but there was still anxiety as you know as you see the burn increasing churn increasing and nothing really coming in top of the funnel at the same speed and this new product just coming a little bit late out a little bit later than you’d like but then after
Jason Niedle (14:41)
Hmm.
And costing money
to develop.
Sjoerd Handgraaf – Sharetribe (14:47)
Yeah,
no, exactly. And then when it finally came out, suddenly we’ve had like 2024 was our best year on record. I’ve been with the company like nine years. It’s been the best year we’ve had. It’s been like incredible. So like suddenly things work also. Do you know what I mean? And I think that that is like maybe a sort of a message of hope. I don’t know to marketers out there that I think that a lot of the marketing stuff is sort of always built on the product market fit thing. that the product
It’s just not good enough. You know what I mean? So like all these marketing hacks that you read about or like, you you see these great use cases. We did this, we did that. I think what people forget to mention that, and also we had a really, really good product. Like we had, think Lenny Rachitsky actually said that in the episode, was like build something people want and then everything starts working. So.
Jason Niedle (15:36)
You do have to do the other things, right? But if you don’t have that core that provides the right value and solves the right problem, then all those other things are never going to work right.
Sjoerd Handgraaf – Sharetribe (15:42)
Yeah, yeah. but I think that, because it’s hard to look critically, at your software and be like, maybe it’s not as good as it should be. I think especially in organizations that
like engineering focused or like product focused that
might
not hit because, they’ve been working on this for years how can it possibly be bad it must be the marketer who’s who’s not
Jason Niedle (16:03)
I mean, honestly, I just talked
with a software company the other day and their categories will be dead in a year because of AI and they still are not ready to accept that. And they’re like, they want me to come in and when I talk to them, I’m like, you see where your category is headed, right? And they’re kind of in denial about it. And I’m like, no, I can’t go there. If you can’t accept that your industry is falling off a cliff and you have to make some radical shifts, then it’s not going to end well.
Sjoerd Handgraaf – Sharetribe (16:10)
Yeah.
Yeah, yeah.
Hmm.
Sometimes you’re also truly just not seeing it because you’re like, no, this product that we have, is great. And well, I mean, that’s the whole science in itself. Like how do you convince the customer to do something like that?
This is sort of a learning that realization that we’ve had here internally also about this product market fit. And since then, I think we’re also look at that more radically. So to your point, example, fiery discussion going on as a company, like what do we do with AI? like, is it a competition? Is it an enhancer? How are we positioning ourselves here?
We need to do something, but what is the right thing to do feels still like we need to do some work on that still.
Jason Niedle (17:02)
I had a guest bring up Lovable and then I had a listener say, I tried Lovable and I built a site I was working on for years and not making any progress and it would have been a $10,000 site and I built it in three hours. And it works pretty well. And it’s like, some of these tools are unbelievable, you know, and I don’t know if they’re relevant to Sharetribe, but they’re absolutely changing things for sure.
Sjoerd Handgraaf – Sharetribe (17:08)
Yeah.
Yeah.
Yeah.
Yeah,
I haven’t tried out Lovable. I tried out Replit and there’s Bolt. ⁓ Yeah, yeah. But I mean, I’m sure that the sort of the experience, the rough experience is roughly the same. Okay, it can build a lot of things for you like and it can really produce code. it’s not entirely black box. I think my issue for now with it is that and I think where shared web is maybe
Jason Niedle (17:26)
Lovable is pretty amazing. I haven’t tried the others.
Sjoerd Handgraaf – Sharetribe (17:43)
adding more values that whichever you get everything already out of the box. Do you know what mean?
Our experience is that marketplaces, I think this is also one of the foundations for our business, that marketplaces share about 90% of the same features. Whether you’re a AirBnB or a car rental, the mechanics behind getting to a transaction are very similar. Correct. Correct. And so we have that up and running and tested for you at scale. I think the value comes from that.
Jason Niedle (18:00)
There’s certain key components that have to exist.
Sjoerd Handgraaf – Sharetribe (18:09)
I’ve seen people launch something in a day. And I think with my experience with the AI coding it still takes quite a while to have it understand what you want. And then of course, what if it breaks? What if it’s a scale? Then at some point you’re going to need a developer who then needs to familiarize themselves with whatever the AI garbled up. And I’m not convinced it’s the best approach. Yeah.
Jason Niedle (18:28)
may not always be
the safest thing right now, yeah.
Sjoerd Handgraaf – Sharetribe (18:31)
Yeah, but
let’s see. I mean, I don’t want to be in denial about this. So that’s why we’re discussing this also internally.
Jason Niedle (18:36)
Yeah, so a moment ago you mentioned that 2024 was your best growth year ever. And then I saw on your website that you guys just published the 26 key marketplace metrics. So what are your key metrics? How are you measuring?
Sjoerd Handgraaf – Sharetribe (18:49)
For sure when I talk about the best year I’m just talking about revenue growth. We did not add barely any revenue like yearly revenue for the last two years, for the two years preceding 2024 and we added almost half a million I think in one year in 2024 alone and we have been on the same flow since so.
Jason Niedle (18:52)
Okay, good.
Sjoerd Handgraaf – Sharetribe (19:09)
So that’s the metrics I’m talking about. we’ve improved it, but it hasn’t increased to the same amount. Think accounts, like our flow is basically like someone visits the site, they create a trial account, etc. And so I think all of those top of the funnel numbers, they went up. But I think what was just really made the difference is that people liked the product. And so conversion was just,
much, much better, like the way that we did the pricing and we arranged the plans just made a lot more sense to people you know, it was easy for them to choose the right plan. They liked the price that they’re paying for it. It fits with what they want. And I think that whole combination. And also I think we were much clearer. we did our positioning much better. So it was much easier for customers to understand.
Jason Niedle (19:33)
Mm.
Sjoerd Handgraaf – Sharetribe (19:51)
What it is that they’re buying into, what is being offered, and then in the product also, we delivered on that promise that we made on the marketing side and all the marketing beforehand, which has been like a new thing for us or a refreshed thing for us.
Jason Niedle (20:03)
So I like to look at that problem. It’s always like top of funnel, like more bodies in the funnel and then once they’re in the funnel, reduce friction. And it sounds like, that’s like remove constraints to buying and remove the other constraints. And it sounds like you said you were getting the same amount of people in the funnel, but your plans are more clear, your product’s more effective, you do more of the things that they wanted to get done, and so you had a much higher conversion rate. So even with the same funnel, all of a sudden you’re getting more growth.
Sjoerd Handgraaf – Sharetribe (20:08)
Yeah.
Yeah.
Yeah, I mean, we were growing also at the top of the funnel, but I think that is not to the degree that we grew with the revenue. I mean, this sounds a bit lame, but it is a holistic thing. You know what mean? That like, what you put out there, the first time that people engage with your brand, come across your brand, that it’s already clear what it is that you’re doing.
Jason Niedle (20:41)
It is. It should be. Yeah.
Sjoerd Handgraaf – Sharetribe (20:50)
What can they expect? Why are you better than the competitors or the competitive alternatives? Who are you for? Those are things that I think over the time, because like I said, like we’ve been in this business for over a decade, me nine years, this is something that, and maybe this also relates to like mentioning the bubble when you’re in the bubble. it’s easy to forget that, and also probably for us that
most people in the world don’t even know a product like ours exists, you know, that there is a thing that can build a marketplace. And so it’s really easy to overestimate what people know and sort of make things more complex than they are. We underestimate the amount of people who don’t know about this entire category existing. So like,
Jason Niedle (21:15)
Mm.
Mm-hmm.
Right,
you’re living it, so of course it exists, right? But there’s plenty of people who think, there’s nothing that’s going to help me put together a rental marketplace.
Sjoerd Handgraaf – Sharetribe (21:30)
Yeah, no.
Precisely precisely and so I think we just did a much better job at that. Maybe actually that’s another modern book tip this great book by April Dunford called Obviously Awesome, which is like a guide to positioning startups basically SaaS startups And we just followed that book It outlines a workshop. We did that with the whole management team and people from all parts of the company. Like what are people talking about? How are they talking about our product? Like we went through loads of
our customer support tickets, went, you know, what feature requests, when we asked them to give us a review, what are the words that they use, what verbs, like are they talking about speed? Are they talking about ease? Are they talking about how nice it looks? Are they talking about the price? You know, like, because you have sort of preconceived notions about what you’re putting out there, but that might not be how people experience it. And actually they take us because it looks so good while they just like us because we’re so fast.
I think we just got all of our like, is it all ducks in a row? Is that an expression? I think we, yeah, I think, yeah. And I think that that is just, you know, like then everything starts clicking just a lot better.
Jason Niedle (22:26)
Yeah, you’re ducks in a row. Got your ducks in a row.
So I love on this show, I love to look at constraints and what is it internally that’s holding you back from growing faster? What is the internal constraint to growing faster?
Sjoerd Handgraaf – Sharetribe (22:41)
Yeah, it’s also because it’s a very bit of special company. Like our ownership structure is extraordinary. We are what is called a steward owned company. We were originally sort of traditional VC funded company. And then after a couple of years, right around when this sort of lull in growth started, our investors started to push us to a direction that we weren’t super excited about. Although the two founders realized, hey, actually we don’t want to sell this company ever.
And so we moved to something called Steward Ownership, basically means like we raised 1.5 million euros in crowd investment. So we have investors, but Steward Ownership model basically means that the company is built for a mission. And like you mentioned very nicely in the intro, our mission is to democratize the platform economy. And we do that by making technology accessible to everyone.
And that is our mission and everything should be in the purpose of the mission. Our mission is not to actually generate a profit. Like the profit is a means to the end of ⁓ what I just described. And the other thing that comes with this is that we cannot be sold. So it will be very hard to raise additional funding. So we are profitable. We have some money in the bank, but I think maybe our
Jason Niedle (23:32)
Mm-hmm. Mm-hmm.
Sjoerd Handgraaf – Sharetribe (23:45)
biggest internal blocker is just like resources because we cannot expand the marketing team really fast until we have sort of proven that we can, you we can get one.
Jason Niedle (23:54)
Right, you don’t have
millions of dollars in VC money that you can throw out marketing and lose money for the next 10 years.
Sjoerd Handgraaf – Sharetribe (23:57)
Correct.
Exactly, exactly. And I think that that is really great. I’m super grateful for that because you just pay a lot more attention to things like unit economics, like LTV retention, those kinds of things. But sometimes you need to take that shot, you know, and we just have, maybe compared to what you said, like the VC-funded…
company who’s growing faster, we just have a more limited amount of shots. So I think maybe that is internally the biggest constraint that like we need a bit more for a bit more conservative with making big bets. Let me put it like that.
Jason Niedle (24:28)
Sure, that makes sense. love that you have your own podcast and you’ve met all these marketplace founders. What have you learned from them about growing a company?
Sjoerd Handgraaf – Sharetribe (24:37)
Any aspiring marketplace entrepreneur who’s listening to this podcast or has maybe this idea to understand is that the one thing you need to do when you start a marketplace is constrain it. So don’t go out and be the global Airbnb and have like a marketplace that is immediately global from the sites because there is this thing in marketplace called liquidity. So liquidity is the likelihood that if you are a seller on the marketplace, you sell what you list there. And if you’re a buyer, you find what you need.
Jason Niedle (25:02)
Mm.
Sjoerd Handgraaf – Sharetribe (25:02)
And
most marketplaces, if not all, can basically be divided in this sort of matrix from like, on the one, like on one axis you have like locations, like geo, and the other ones you have categories. So if we take a really simple example, like a car rental marketplace or a peer to peer car sharing platform, actually, we have a really cool customer called DriveLaw from Singapore, have grown to many millions, they’re now also Australia and New Zealand. But I’ll take them as an example. They started in Singapore, which is a really tiny, city state.
Where actually cars are extremely expensive, so it makes a lot of sense. And they could have gone to any other company, but Singapore is actually a really great hub because it’s very compact. Everybody can do business with almost everybody. Of course, they have neighborhoods. So if they launched it in Singapore and I need to find a car in Singapore, if they have their supplier, I can always find someone. If they would have gone bigger like East Asia and they would have, I don’t know, some cars in Taiwan and then the other things, you know.
demand in some other place, you cannot make this transaction happen. And no, exactly. And like this is happening. Like I’ve seen this happen so often that, you know, and even the most famous ones like Uber started on the corner of some metro station where it was like, okay, our demand is there because, you know, it was like, I think it was San Francisco. was some super busy Metro and whatever other connects were bad. They went there. Grubhub Casey told me it was just in Chicago in certain neighborhoods because,
Jason Niedle (26:00)
Right, there’s no match.
Mmm.
Sjoerd Handgraaf – Sharetribe (26:25)
you want to be able to talk to the restaurants in the neighborhood and you want to first advertise to people living in that neighborhood. There’s no point taking Chicago bigger because just getting enough supply on board that everybody finds something that they like and is close is just too big. So you really need to take it. I think Andrew Chen, one of the, you know, Andreesan Horowitz investors who was early at Airbnb, another book, another book recommendations, but he has this book called the Atomic Network. And that’s what he finds, like find the smallest
Jason Niedle (26:30)
Mm-hmm.
Sjoerd Handgraaf – Sharetribe (26:51)
thing where these things are in order and then just start your marketplace for that. Doesn’t matter if you have only four transactions per month, you will learn like 80% of what you need to learn about your idea in that small, small constraint cycle. So I think that’s the normal one lesson I’ve learned that everybody says at any scale that this is what you need to do. Or alternatively, I wish we would have done that in the beginning because we wasted so much time and money.
Jason Niedle (27:14)
Interesting. So on episode 26, which I don’t think has come out now as we’re recording this, we had Guilherme from a company named Wali, W-A-L-I, and he’s down in Brazil and he does car sharing and car rentals. was so interesting how he broke it down and this supports your thoughts exactly. So first he started in one city.
But they were starting with daily rentals. But then they realized there’s people who can’t even afford the car for a day. So then their other segment became hourly rentals. And then there was people who could afford it and they wanted the car for the month. So they had those three different audiences in one city. Then they moved to another city and they realized, wow, these people resonate with things differently. We have different landlords because they had to park the cars and obtain cars. And so when he was looking at his segmentation, they had to get hyper local in every one of those elements.
Sjoerd Handgraaf – Sharetribe (27:41)
Yeah.
Yeah.
Jason Niedle (28:01)
And just move slowly from city to city until they could have enough saturation on that market. And then, okay, good. Now we’ve got this, now we can move to another city and grow it again. But it’s just like you said, if they just tried to go to all to Brazil to everyone, it never would have worked.
Sjoerd Handgraaf – Sharetribe (28:01)
Yeah.
Yeah. Yeah.
Yeah, because like this understanding this liquidity like is so important like there’s a great interview to have with, with this company called White Hat. But she used to work for higher.com when they moved to the UK. And they literally just went to so they went to London first and it broke all of the things down. And they just had this massive spreadsheet where there’s like, you know, like
certain type of coders on the one thing like whatever like UX designers in Notting Hill or something and like as soon as one of these things turned red, she called their marketing person’s like, okay, I need you need to put out advertisements for this job or we need more UX, Python coders in whatever West Chapel or whatever. And it was really like they just had this massive, like massive spreadsheet with all these little holes and just trying to balance it all the time. And of course, over time, they got more
Jason Niedle (28:58)
interesting.
Sjoerd Handgraaf – Sharetribe (28:59)
more automated, but that’s truly what a marketplace is. Like there are all these tiny, tiny centers where there’s just good match in and out, going in and out, and they need to be in balance because otherwise you don’t make any money.
Jason Niedle (29:09)
Yeah, it’s this magical thought between literally matching buyers and sellers in the best way possible.
Sjoerd Handgraaf – Sharetribe (29:14)
Yeah, yeah, exactly,
Jason Niedle (29:16)
Well, any final thoughts before I let you head back?
Sjoerd Handgraaf – Sharetribe (29:18)
No, just, like I said, you have this idea or what I said resonates with an idea that you had, would be great if you give Sharetribe new Release a try. It might be a really good fit. And if you’re into podcasts or general business podcasts or want to learn more about marketplaces, check out Two-Sided, the Marketplace Podcast available on all the platforms.
Jason Niedle (29:38)
Cool, and where can our listeners find you?
Sjoerd Handgraaf – Sharetribe (29:40)
Well, can take my name from the episode description and just add me on LinkedIn. Or just send me a message at sharetribe.com. that is S-J-O-E-R-D. That’s my first name at sharetribe.com.
Jason Niedle (29:51)
And that website again is sharetribe.com, just like it sounds, S-H-A-R-E-T-R-I-B-E.com, Sharetribe. Sjoerd, thank you so much for being on Beyond SaaS. For tech leadership out there, we’re committed to exploring company growth. So we drop episodes twice a week on Tuesdays and Thursdays. And you can find me, Jason Niedle, at tethos.com, where of course you can grab the Hyperscale Playbook at tethos.com/podcast.
If you got some value today, please share the episode with a friend. And I love questions, comments, feedback. That’s really helpful. Until next time, this is Beyond SaaS.
