Lenny's Podcast: Product | Career | Growth

Developing a growth model + marketplace growth strategy | Dan Hockenmaier (Faire, Thumbtack, Reforge)

October 9, 2022

AI Summary

5 min read

Dan Hockenmaier shares experiences from Thumbtack, Faire, and his consulting at Basis One (acquired by Faire), explaining growth models as spreadsheet-based representations of how a business scales and marketplace strategies that require a light touch to avoid disrupting ecosystems.

Building Growth Models

A growth model captures acquisition channels (traffic, conversion), retention (activation, survival rates), and monetization (fees or transactions per user, AOV) for SaaS; transactional businesses add transactions per period and unit economics like COGS; marketplaces layer in supply acquisition/retention and side interactions. Build from first principles in a spreadsheet to force deep understanding—half the value is the process, as it reveals non-linear effects like virality or reinvested margins where payback period trumps LTV:CAC. Avoid over-reliance on templates; pair with an analyst for iteration, and create mini-models per team (e.g., growth funnels vs. tension managers like quality or credit teams balancing short-term volume against long-term retention).

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What you'll learn

1 **[00:45] (00:45) **Dan's Background & Intro**
2 **[05:54] (05:54) **What is a Growth Model & Why Build One**
3 **[07:35] (07:35) **Building Growth Models: SaaS, Transactional, Marketplace**
4 **[16:00] (16:00) **Key Learnings: Retention's outsized impact + Thumbtack Example**
5 **[25:23] (25:23) **Core Marketplace Metrics**
6 **[34:00] (34:00) **Supply vs. Demand: Focus on Demand, ROI Models**
7 **[39:43] (39:43) **Marketplace Nuances vs. SaaS + Gardener Metaphor**

+ Full timestamped outline available in the app

Show Notes

Dan Hockenmaier is an expert on marketplace strategy and growth. He was previously the Director of Growth at Thumbtack as well as a partner at Reforge, where he co-created the monetization track. Currently, he is the Head of Strategy and Analytics at Faire. In today’s episode, Dan shares the building blocks of a growth model, important considerations when building your growth model, and how to get started. We also chat about retention best practices, the complexity of building a marketplace, the future of marketplaces, and when it makes sense to add a SaaS business to a marketplace, and vice versa.

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Find the full transcript here: https://www.lennysnewsletter.com/p/developing-a-growth-model-marketplace

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Where to find Dan Hockenmaier:

• Twitter: https://twitter.com/danhockenmaier

• LinkedIn: https://www.linkedin.com/in/dan-hock/

• Website: https://www.danhock.com/

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Where to find Lenny:

• Newsletter: https://www.lennysnewsletter.com

• Twitter: https://twitter.com/lennysan

• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/