June 12, 2020: Learnings inspired by listening to Invest Like The Best podcast episodes with Sarah Tavel of Benchmark and Jeff Lawson of Twilio. This took me down the rabbit hole of learning about 100 marketplaces from a16z’s article on private/startups and First Round Capital’s focused interview with Jeff Lawson on Twilio’s values and culture.

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Episode Notes:

The a16z Marketplace 100

• B2C marketplace companies in the US by non-cash consumer spend; private and startup companies

• "The top 4 companies (Airbnb, Doordash, Instacart, and Postmates) account for 76 percent of the list’s total observed GMV”. / these companies were 7-12 years old

• "late-‘90s, when the average time to IPO was around 3 years"

• Cameo: "purchase celebrity shout-outs for friends, family, even themselves"

• "$22 billion food delivery market"

• "companies are emblematic of emerging categories among millennial and Gen Z consumers, including local and indie brands, celebrity engagement, and streetwear.” / Is it the creation of new sub markets? Or just a natural evolution of what matters for people with the passage of time? Just like how horseshoes and husbandry was probably a big market before. Something else to note is that though ‘celebrity engagement’ and ’streetwear’ are fast growing markets, that they will be big markets is a different question. Some markets aren’t big enough to support  large valuations. 

• "Within the travel segment, Airbnb (#1) is the runaway leader, accounting for 95 percent of segment GMV—of course, these days, Airbnb’s primary competitive set includes large, public companies focused on travel, as opposed to other startups.” / Doesn’t seem very useful to classify market shares in this manner.

• Difference between Airbnb and Food Delivery = Airbnb is a single, global network whereas food delivery companies (UberEats, Doordash, Grubhub and Postmates) compete in specific cities (even urban vs. suburban of each city)… dominance in one geography doesn’t mean an advantage in another. “...winner-take-all-dynamics are nonexistent."

• "When consumers can order the same meal from multiple platforms, the providers then compete on price and experience (most notably delivery time).” / not a profitable battle long term. 

• https://a16z.com/2020/02/18/marketplace-100/

Twilio’s Company Values & Culture

• Twilio use case: Everything to do with automated text messages and calls. 

• In job interviews, it might be a worthy question to ask if employees could recite company values

• Lawson on culture: "Values are written words, and your culture is how you actually live those written words."

• Company values will form as the company matures (i.e. 20-40 employee mark)

• Process: 1) Gathered 12 long-term minded employees from all over company 2) Record 100+ ideas 3) Cut 100 to 25 to 10 4) See which ones you can’t live without “Oxygen Test"

• 9 Things (Not core values): 1) Live The Spirit of Challenge, 2) Empower Others, 3) Start with Why, 4) Create Experiences, 5) No Shenanigans, 6) Be Humble, 7) Think At Scale, 8 ) Draw The Owl, 9) Be Frugal

• Where each value isn’t some fancy corporate speak but means something. It’s something people can look at and define as ‘yes’ or ’no’. It’s not like values like respect, integrity or communication. 

• The “salt shaker” lesson from Danny Meyer => the leader job is to always bring everyone back towards excellence and show them what it looks like and that it is what you as the leader stands for. Employees and customers will always try to destabilize you and its your job not to get upset but bring everyone back to stability. “Back to the centre”.

• “A reporter interviewed me for a series entitled ‘Lunches With Unicorns.’ She described our office as a ‘far-from-luxurious’ building ‘tucked in the back of a dingy structure. She called out the ‘grungy beige carpets’ and ‘a battered orange cone’ standing guard next to the elevator,” says Lawson. “A lot of people would be horrified with this description of their company, but I'm actually proud. Our value of ‘being frugal’ is being lived and visible to those who observe.”

• “Leading a company means being a conscious custodian of its values. It’s a requirement, not a nice-to-have. Because, here’s the reality: every company has a culture and has values whether or not you put them into words,” says Lawson.

• https://firstround.com/review/draw-the-owl-and-other-company-values-you-didnt-know-you-should-have/