How to start a marketplace in an industry you know nothing about - Emmanuel Nataf (Reedsy)

Please note: Transcript is automated so will contain mistakes.

[00:00:00] Emmanuel Nataf: And so we just reached out, you know, you reach out to a hundred people and you're going to find like those early adopters who are just curious about it, who might have had the idea actually for the product, but never developed it. So they're like, yeah, I thought about it. I thought that was needed. Okay.

I'm happy to sign up and create.

Welcome to two-sided the marketplace podcast brought to you by Sharetribe.

[00:00:31] Sjoerd Handgraaf: Well, welcome to the podcast. Thank you for that. Yeah, thanks for agreeing to come on. I really like to reach these idea, but before we really transporting through the, all the marketplace specific for receipt, can you tell us a little bit about who was at Montebello and what did you do before you started.

[00:00:47] Emmanuel Nataf: Yeah. So before I started reading, I was actually at school. I was terribly bored, you know, in a business school, basically extremely interested in startups and tech and kind of like trying to develop different ideas. And then, you know, as soon as I had something that felt interesting, actually, you know, we went to see investors left school.

And so essentially reads is pretty much the only thing. I really don't from a business perspective, from a work perspective. Uh, so yeah, so in a way, like, um, I don't have, I didn't have much of a background, which didn't help, you know, with credibility in the beginning, but you know, you know, sometimes you just find out about an industry you dig in and you have ideas.

Yeah.

[00:01:29] Sjoerd Handgraaf: Yeah, yeah, no, absolutely. Obviously. Yeah. So it was you and three other people, correct?

[00:01:34] Emmanuel Nataf: Yeah. We focused founders and three French dudes, uh, and one Brit. So yeah, when we started the company, we initially moved altogether basically to London, uh, where our first investors were based and slowly as we developed the company became fully remote.

So now we fully distributed company. We're about 40 people based a bit of. Yeah.

[00:01:56] Sjoerd Handgraaf: And so you were in business school and the other three, do any of them had already history with the publishing industry?

[00:02:03] Emmanuel Nataf: None of us. I think we were all quite interested in. Cultural creative industries in general and you know, startups in tech, but none of us had experience with publishing and actually my co founder, regardless the first one of us that's published a book.

He published a book like a few months ago about how to market a book, basically.

[00:02:23] Sjoerd Handgraaf: Okay. Yeah. Yeah, because maybe you can tell us a little bit about what is Reedsy. And then we would like to hear, I guess, how did you, how did you get the idea? Especially because usually the story is that like, oh, I work in this industry and then I noticed the problem.

So yeah. Tell us a little bit about, uh, first of all, what does read, see just in a nutshell, and then if you can tell how did you come across the idea that.

[00:02:42] Emmanuel Nataf: Yeah. So very briefly we basically help authors publish their book. So most authors we work with will look to self, publish a book, but also help people who want to work with a publisher.

We have them publish the manuscripts before they submit to agents and publishers. Uh, so the main product is a marketplace where you can find a curated community of professionals, you know, who have experienced working with, uh, some of the best publishers and on best selling titles. Uh, so if you're looking for an editor, a designer, Proofreader illustrator, et cetera, those professionals do stop professionals will be available on Reedsy.

Uh, so that was the initial idea. It came from learning about the space, basically getting a Kindle, realizing that the fact that distribution was changing so much was going to impact the rest of the value chain. And just as a business model, the creativity, the freedom and the business model of self-publishing felt very interesting.

And so. Quickly we thought about, okay, how can we support this industry? So people can start publishing and professional fashion, even though we, now we help all types of authors. And so, as we developed, so we started with the marketplace and as we developed, and I think we'll talk about it later, but we realized that most people were.

Lost with the whole process of publishing a book. So we started developing content, educational material and tools. Uh, we have the whole set of tools that's available for people to learn about writing craft and slowly, you know, get familiar with the whole journey, the whole publishing.

[00:04:13] Sjoerd Handgraaf: Yeah. Let's, let's leave that until a little bit later, because I would like to, so where you all roughly, same age.

So

[00:04:19] Emmanuel Nataf: three of us were still at university two hours in business schools. Once our designer, Matt was studying architecture actually jumped out. He could, he could make buildings and design websites. So, and, um, yeah, and I was CTO. Vincent had more experience building product is slightly. Yeah.

[00:04:37] Sjoerd Handgraaf: So, yeah, because I'm really interested in, like, how did you get about, like, how did you build the very first product, for example?

So, because you're not from that industry, so you don't really have, uh, you know, often the idea gets sort of pre-validated over many years. So how did you, like, how did you validate the idea in a way and what was the first version that you built.

[00:04:56] Emmanuel Nataf: Yeah. So, you know, there's different ways of like, you know, looking at a market, you can be like, the market doesn't know what it needs, but I'm pretty convinced in a very artistic passion.

Uh, you know, that, you know, this is what the market needs. And so you build it and you see what happens, or you can just like run surveys and like try to validate your ID for, you know, in a very like, um, You know, marketing driven a way. And so we kind of went, went like more, you know, the product way, like, you know, we feel like there's a product that's missing that could help support this industry.

Let's see whether, whether that could work. So, but we did, we, we did do a bunch of interviews. We did talk to a lot of people in the industry. We were trying to get a sense of, you know, whether we were onto something that was actually missing. And so initially a lot of people telling us, yeah, I'm not sure we really need this or that company tried and the failed, uh, you know, and so, so obviously, you know, in the beginning, there's a lot of stuff to verify, uh, before you can get some sort of like product market fit.

But yeah, for us, that was more, it felt like it's needed. Let's try again.

[00:06:02] Sjoerd Handgraaf: Yeah. And so what's the first, did you build it from scratch? Like you mentioned you had a CTO, so did he just coded from scratch or did you use like WordPress

[00:06:11] Emmanuel Nataf: or something? Yeah, so CTO, I mean, is it, is he wasn't him and he is a full stack developer, but.

Backend developers. So the first version of the site had like the whole front end, the whole CSS in a single file. X was kind of like a weird thing, but it works. So it's enough to raise a bit of money and get a little bit of traction. And so, yeah, Matt and I started Matt, who is our designer, started designing the products I thinking about it.

And the very first iteration of the product was basically the profiles of the professionals who would, you know, at some point. The site. And we used a disc profiles to basically showcase some really great professionals, uh, who were kind of like our early adopters and willing to kind of like, you know, have a, have a go at it and see what would happen.

And so one of the first people we had on the site was Stephen King's, uh, one of Stephen King's, uh, designers. And so. His work was truly amazing. And so, um, allow us to real estate kind of like style work as well in his portfolio. And so, um, we were using that profile over and over and over and over again to show the quality of the professionals who were available on Reedsy.

And so that allowed us to get our first customers basically. And so in the very beginning, we were only charging on one side of the marketplace and then slowly as we were able to provide more value, we started charging them. Yeah. Yeah.

[00:07:35] Sjoerd Handgraaf: Okay. So do things about the next day, maybe the first one is like, how did you get even the first people on board?

Like from the, from the professionals.

[00:07:42] Emmanuel Nataf: So. So we started with designers because like the visual aspect, you know, it's, it's easier to sell something when there's like something visually compelling. And so we started looking for like, you know, top designers who'd worked on selling books, very famous books.

Really just profiles helped, you know, get us running, you know, uh, logs. And so we just reached out. And so, you know, you reach out to a hundred people and you're going to find like there's early adopters who are just curious about it, who might've thought about who might have had the idea actually for the, for the product, but, you know, did it never developed it?

Uh, so they're like, yeah, I thought about it. I thought that was needed. Okay. I'm happy to sign up and create a profile. And so.

[00:08:23] Sjoerd Handgraaf: And so early on, uh, so that's mostly designers, but from the very start, did you have multiple like categories of providers on there? We had

[00:08:32] Emmanuel Nataf: two categories. We had editing and design, which remain our top services basically.

Uh, today we do, we provide a bunch of internal services. So from edits assessments, developmental editing, cookie editing, proofreading, indexing, et cetera. And so, and for design that was like cover design book, interior design type. And the restorations. And so yeah. Do services where like the initial services we started with, and then slowly, slowly afterwards, as we saw, you know, in need, uh, we added.

Yeah, because of

[00:09:02] Sjoerd Handgraaf: course it's, I guess it's mostly digital, right? Because often I asked the question, like, um, you know, did you constraint in any way? So basically we just established that you've had two categories. What'd you kind of need for book. Someone's need to put the content in there, then you need someone to edit it and then you need some nice wrap around it.

And then basically that's the minimum thing you need for. But did you in any other way, like constrained the marketplace for company on the other side? Like how did you get the first customers on board? Like, did you do that like country by country, for

[00:09:30] Emmanuel Nataf: example? Yeah. So we quickly realized that, you know, so we only doing it in English to begin with.

Uh, and we quickly realized that the us was going to be the largest market by far. Um, so they want too many constraints and English speaking people. That was it. Actually, we had one constraint because when we started Stripe for like Stripe, the payment service provider that we use was, uh, so the product is called a Stripe connect.

He has a product from us to build marketplaces. The payment system for third parties was only available in limited number of countries. So we did have some limitations because of Stripe. And initially, because Stripe was so new, a lot of people were pissed that we want to using PayPal, but, you know, after.

It's started to work. Took a few years. Actually. We got complaints a lot though.

[00:10:19] Sjoerd Handgraaf: Yeah. I remember like we have in our, like in shared truck in our shared drive products, we also use it. And I remember that it was initially like, I think the English speaking countries and in several, uh, Western European countries and it has, but it has, I mean, it has killed quite fast over the last couple of years.

Yeah. And so actually ended up coming back to that earlier point where you mentioned something about, you were only charging one side of the, of the marketplace. So actually it's a cycle where you do.

[00:10:44] Emmanuel Nataf: We started with the supply side. Uh, so initially, so people providing services to authors and then after three or four months, we added the demand side.

We wanted to make sure we're providing enough value to the, to both sides charging, but we charged from day one. We will never free on whatever. Do you

[00:11:03] Sjoerd Handgraaf: remember what it was like the first marriage first transaction. Very first.

[00:11:07] Emmanuel Nataf: The very first book. So I think actually, I think it was an Australian editor.

That's worked on a book about what was it, Vikings or something like that, something, something kind of funny and random. Um, but yeah, uh, so yeah, that was the first project. And actually it was a much larger amount than we expected. Yeah. Yeah. So

[00:11:26] Sjoerd Handgraaf: earlier we established that you basically use let's call it like direct sales to acquire the supply side.

What were some of the first, uh, tactics or strategies you use to acquire the demand side?

[00:11:37] Emmanuel Nataf: So fairly early on, I think we, so we basically did, like, I guess what most companies do, like when they're starting out or anyone looking to sell a product and find an audience we'll listed a bunch of channels and a bunch of ideas that would potentially allow us to reach our target markets, uh, and fairly early on, I think we, we knew that, uh, content marketing was going to be something that would make sense for us though in the first.

I guess like in the first, maybe couple of years, we're producing content that wasn't really like, you know, doing, you know, what we wanted. We didn't really have a sense of like, you know, how's your work back? You know, I didn't see her when I was at university, you know, like in the first few years. And like, it was just so easy to trick Google and to, you know, to rank for anything and make money.

Uh, but you know, over the years, like Google became like a lot smarter. So just, you couldn't just produce any sort of content and, you know, engage rank anymore. So the first couple of years we were doing a bit, a bit of everything, it would say we were doing something, we were running some ads. We're like doing some content, we're doing some webinars.

We're doing like in-person meetings and events, which, you know, back then, that was crazy. And so, yeah. And after two, three, We started getting people on the team who were really, really strong at content and SEO and we, and we've become like some sort of like, uh, you know, a content machine, you know, I have, so, yeah, so we, so we've become really, really good at producing content.

We're always trying to take content to the next level whenever we can actually even build a. Uh, instead of just having a blog post we'll do it basically. And so, yeah, so it took a, just like some, some learning I would say, but yeah, we have an audience of authors, people like to read and consume, you know, written content.

So for the most part, having a blog and producing content, we also have a YouTube channel that's grown really, really fast in the past few years, uh, where we cover anything from, you know, writing craft to, you know, uh, publishing, distribution, marketing, et cetera. And so, yeah, so oldest channels, all this content related channels, uh, have led to a, you know, well today there's maybe like 2.5 million people coming to the site of month.

Uh, and that's pretty much, you know, purely organic. Wow.

[00:13:53] Sjoerd Handgraaf: Yeah, that's amazing. When you say like, if we can turn it into a product, we will, could you give an example of what, what do you mean with that?

[00:14:00] Emmanuel Nataf: So for instance, so if you Google writing prompts, you will find like Reedsy, I was like the number one, uh, as the number one results.

And initially, uh, for quite a while, like, you know, people were Googling, you know, writing prompts and we were getting. You know, list of prompts. And at some point we decided to introduce some sort of contest, her writing prompts contest. So every week now we have like a new series of prompts on a different topic every week.

And so people can submit a short story and as a whole we've built actually an entire community out of. Instead of just having a blog post or just like a director a that would list prompts. It's a whole community and people can send me stories and we even have judges reviewing them and finding like the six, you know, the winners every week.

And so that, that's just an example, but we've done that for a bunch of keywords. Um, so we've created a bunch of tools. Uh, we have like a book, title, generator, character in engineering. Uh, anyway, a bunch of different generators and a bunch of different directories that aren't just like basic block posts.

Uh, we, sometimes we start with a basic blog posts and they feed you forget. Or even if we don't get the traction that we look for, we try to develop something even more advanced. Yeah,

[00:15:15] Sjoerd Handgraaf: no, that sounds cool. Yeah. I was going to, because now, while you were talking about this, I was thinking like, oh, there must be a heavy community around this.

Like if, if you know about like writers and people like to share, and like people like there's many of these sort of creative, like endeavors that automatically sort of generate community, have you done? So, so this was a great example of that. Have you done any other things to sort of, let's say, like see to the community, like improve.

[00:15:40] Emmanuel Nataf: So, yeah, so we have like a whole like platform called Reedsy learning. Uh, that's basically. Online courses right now, the email courses, but there will be a new version of that product coming up in the coming months. Um, and so basically you can take free courses that, you know, period of 10 days, you get an email every day that to cover, you know, whatever, whatever it is that you might be doing, how to write a Romans book, how to write Saifai how to write fantasy.

We have a bunch of different courses how to create a cool. Uh, you know, et cetera, et cetera, et cetera. And so it's just a different way of like, you know, sharing our content with our origins, uh, because some people want to read a blog post. Some people want to, you know, gain email in the morning while they're getting coffee and the croissant.

Yeah. So, yeah, so there's like a, we giving people different ways of learning about the whole process, basically.

[00:16:28] Sjoerd Handgraaf: Yeah, that is cool. That is really cool. So

[00:16:31] Emmanuel Nataf: we also added a few other tools that I think are really worth mentioning. So we have a tool that we call the zebra, Canada. The name might be a bit confusing, but it's basically a book production tool that has some of the collaborative features of a Google docs, but allows you to export your book as a PDF.

Why NEPA that you need the files that you basically need. Distributing your book. Uh, and so that too is really amazing. It's a really, really elegant really lights, you know, uh, interface where you can just like, you know, throw your thoughts, uh, structure your story, uh, and it will, we'll be adding more outlining features and, uh, in the coming month as well.

So really great. Throw your ideas until the point where you're ready, you know, to download the files that changed for Amazon or, you know, auto retailers basically.

[00:17:18] Sjoerd Handgraaf: Does it demonstrate, calming to the format that you need for Amazon? For example,

[00:17:22] Emmanuel Nataf: if I would just say, yeah, that's with all online retailers for both physical and.

Wow.

[00:17:29] Sjoerd Handgraaf: I should've known about this earlier. Like T tribe. We have also, uh, we also published a book, I think two years ago, maybe longer, actually, time's a little bit of a vague concept, but, uh, called the Lee and marketplace and we published it ourselves through Amazon. And next year I was the main responsible for that project.

And I remember now it was, uh, quite a headache, uh, certain steps and formatting, et cetera. Yeah.

[00:17:51] Emmanuel Nataf: Is that essentially like, that was a pain point for like, you know, too many authors or like some people would spend quite a lot of money. You know, editing the book and then they wouldn't put any efforts into, uh, you know, the formatting of it.

And so, you know, it's not just the text, you know, it's a whole thing that matters. And so, um, and so it was kind of frustrating. So essentially the tool, you can throw anything at the tool, it will give you something that looks really great. So you taught to learn it. You don't have to learn in design. You don't have to learn about how to design a book.

You don't have to think about it. We removing that. Something about it. Just give it to it.

[00:18:25] Sjoerd Handgraaf: Yeah. Yeah. And, uh, I saw on the, on the side that you have something like more than 2000 editors right now, and thousands of other like professionals, like you mentioned earlier on one thing that I've always like also learned through podcasts and talking to many marketplace entrepreneurs, it's like the importance of quality of the supply side, specifically of the service.

So how do you maintain the quality? How do you check it anyway before like at the beginning? And how do you maintain it?

[00:18:52] Emmanuel Nataf: Actually it's something that didn't help us in the very beginning, but truly helped us in the long, in the long run. Uh, so initially, you know, the first few people who applied these people, we, you know, we, we talked about it, but we reached out to some really creative professionals initially, and we found a few early adopters, but then as we, you know, started to grow more and more people applied.

And a lot of people got rejected and got really pissed. And so you'd have like, you know, really nasty comments on a bunch of different forums and everything. And so when you're just starting, you're taking all that negative feedback and stuff. You're like, what the hell? But like, we, we stuck with it and we're like, it doesn't matter if those people aren't happy.

Like we think we need this type of professional. This level of experience, et cetera, to provide services with us. So it doesn't really matter if some people are angry or upset or whatever, we'll just take with it. And so, so that's why, even though, you know, we've been running for seven years, but there's only in a way 3000 people providing services with us.

It's because we only want the very best. And so for most services, uh, we get like a lot of information about like, you know, uh, work experience and all the different books that people have worked on. And so. We double-check that they've actually worked on the books that they mentioned. We take a look at the books and their reviews.

We look at the work experience. So, yeah, so we have like different things that allow us to vet in some cases, for instance, for marketing, where it's quite hard in this industry to find really talented book marketers or people who are really knowledgeable about this niche. And so we actually interview them.

So, so the process depends, varies a lot, depending on the, on the server. Yeah, no,

[00:20:30] Sjoerd Handgraaf: that makes sense. Yeah. Yeah. And you mentioned, uh, earlier when we said that your very first transaction is that it was more than you expected with always like leads me to the question. And I think that's the fear, especially of early marketplace founders, like disintermediation.

How do you make sure that the transaction actually happens online? So you can get to what you are.

[00:20:51] Emmanuel Nataf: So we might be an exception in the sense that like, even though we've grown and we attract off people to the site every month, we still have that light, tight community of professionals providing services with us.

And so a lot of them find a lot of really interesting projects through us. And so it's like a source of interesting projects that they don't really want to lose. It's time, the interest to actually risk it. Uh, but the bus from that one thing you do is you make it, you build all the tools that might be needed to make the transaction, the whole process, the whole collaboration as smooth as possible.

Um, and so we always developing multiples, uh, basically for professionals. So they don't have to think too much about anything. Just one simple thing, but like the whole process. Contracting, uh, creating a contract, getting it, signed, all that stuff, you know, it's a few clicks on Reedsy. And so it gives you some peace of mind, essentially providing some sort of guarantees that, you know, if things go wrong, there will be a part in the middle that will try to mediate and everything.

And that we'll try to come to some sort of fair agreement. And so all that support essentially, uh, plus hopefully some quality projects leads to people. Hopefully, not this intimidating too much. It's always a risk. It's definitely always happening, but yeah, you try to limit it by just providing tools are so good that people don't want to go anywhere else

[00:22:10] Sjoerd Handgraaf: to do the things.

Yeah. Yeah. That makes sense. Yeah. I'm not even sure. I mean, like I've talked to so many people about this. I'm not even sure whether you already accepted. I think this is my also be one of the things that, especially like early marketplace founders. What's the word like disproportionally worried about

[00:22:25] Emmanuel Nataf: like, uh, yeah, I mean like human beings are all nice, you know?

And so, you know, as soon as they can try and save a bit of money, it doesn't matter too much to them. Whether, you know, someone put a lot of effort into building a nice product and you know, is actually marketing it to find them customers. Some people really don't care about that. Some people are really like,

[00:22:48] Sjoerd Handgraaf: No. I mean, I don't mean to say that it never happens, but I think it's maybe less of a problem than it really is.

[00:22:54] Emmanuel Nataf: I'd said there's like a minimum, like number of like tools that must be on the site. Otherwise that will happen. Uh there's like a, yeah. If you don't make contracting easy enough, like. Yeah.

People will go elsewhere. Yeah. I mean,

[00:23:10] Sjoerd Handgraaf: like maybe not even tools, right? Like it's more about like the value that you provide with if I'd like, basically, so that whatever is the transaction or the commission that you take somehow is in relation to, to the value that you're providing and tools is a really great way of doing that.

Of course. And like you said, also, I think you've mentioned something like some kind of contracting it's kind of like, um, same as what Airbnb. When they started adding insurance, right? Like some kind of security safety that you build in. So now that makes a lot of sense. And of course also, I don't know how, of course, how many people write a lot of books, but like the repeat uses it's may be a little bit lower than when with some other services I can imagine.

Yeah. And so let's move a little bit into the transaction part. Just a couple of quarters. I don't know how many questions I'll have about that, but you mentioned initially charged one side. I imagine from that I sort of deducted now you're turning both sides.

[00:24:01] Emmanuel Nataf: Yeah, we do something that's very similar to what most marketplaces do.

Our fee. Our fees basically are shared between both sides, just because we think we provide a service to both. So that's why we think it makes sense. We take basically a 10% commission from both sides. So if an editor comes to you and says, I don't know, like, uh, to cook it at your computer to your book, it will be a thousand dollars.

The actual price to the client will be 1100 and the payout to the freelancer will be at 900.

[00:24:29] Sjoerd Handgraaf: Okay. No, no, that makes a lot of sense. And, uh, is there any other, do you have any other revenue models? Like we have so many tools, like, do you charge a subscription for dose, for example?

[00:24:38] Emmanuel Nataf: No. So on the marketplace, which is our main product, that's the only revenue we're getting out of it.

We do have another product that we released like a couple of years ago, which we called Reedsy discovery, which is a place for authors to get their book reviewed ahead of the launch. So to get some basically early, you know, early reviews that they can use as like marketing material for Amazon and other retailers, their own site, et cetera.

And so that's one, we, we charge only $50 per year per review, basically.

[00:25:09] Sjoerd Handgraaf: Okay. Yeah. Yeah. Okay. No, I mean, I could imagine that there might be opportunity to also maybe start charging for the subscription and I could do more advanced these adding new tools get it's a trend that you see with some auto market places.

It's sort of like a SaaS enabled marketplace. I mean, I'm, I'm sure you're used to not be happy about

[00:25:28] Emmanuel Nataf: this suggestion, but like, yeah, no. I mean like, um, yeah, there's like a, the marketplace itself. We differentially not going to add anything to it. At least for the foreseeable future future, but I don't, I don't think that will change.

Yeah. We have some additional tools we want to add to our preproduction tool that maybe we'll charge for. But, you know, I think overall that's the business model that's worked quite well for us and yeah. There's no, there's no reason to do anything else. Speaking

[00:25:54] Sjoerd Handgraaf: of the future, what's in store for the future

[00:25:56] Emmanuel Nataf: of retail.

Yeah. I mean, there's always more products we want to build and develop into product, the main product, the marketplace that we have today. So we, August, 2021 is being fully redesigned and the front end is being fully rebuilt. Uh, so, you know, there's like still all the stuff that back in 2014, when we were kids, we thought, you know, would be useful to people.

And so we've, we, we know precisely, you know, which features are needed and you know, and what should be in the product now. So. You know, a brand new interface, hopefully super intuitive, super fast. So we fully rebuilding this. We, as I mentioned a little bit, uh, earlier, uh, our learning platform is. We did a lot as well.

Uh, so we want to take learning to the next level basically for a number of reasons. But yeah, we, won't just better quality books in the sites. And also we were working on training more editors because like, as we've grown, you know, uh, we've been like, okay, this is really great, but there's not. That many really talented editors available on the market and simple marketers and other verticals.

And so we working on basically, you know, some sort of university, uh, to train everybody. So yeah, that's one of the things we doing and yeah, and there's a few other products, one really cool product that we'll be adding as well. As, as I mentioned, as part of our book production tool, there will be some outlining features which hopefully will be more intuitive than everything that's currently under.

Uh, a lot of authors use Scribner and like all the tools you might have heard about it, which we don't think that's great. Uh, so we've been like thinking about a bunch of different features for that. So hopefully there will be more educational and more tools to support offers basically on we'd see, in the coming months and years.

Great.

[00:27:46] Sjoerd Handgraaf: Hey, as a last question for this episode, is there anything you would have done differently and, or any tips you would have for starting marketplace founders? A lot of people listening to this will be like very early on and less than you want to get.

[00:28:01] Emmanuel Nataf: I don't know, like, it's really depends. Like, you know, where you're coming from, how for us, like we thought we knew didn't know that much.

Uh, like as I said, you know, straight, fresh out of universities. Uh, so, so yeah, so the market today is extremely different from the market. When we started in 2014, you were raising a seed round at 500. And that was already a very nice syndrome. You know, today you're raise a few millions on an idea. So essentially it's like a totally different environment and ecosystem.

You don't have to take any money we had to because we were just like, we didn't have much in the bank accounts. But, you know, building a product is so cheap these days that, you know, if you have some, a little bit of funding, a little bit of money on the side, you don't even need to take all those millions are available to you and you can have the freedom of building your business independently and the way you like.

And so it's actually something that we've kind of changed over time. We thought we were going to go for one round and then the other, and then the other, and then the other. And in a way we were kind of lucky that we, we almost raised a series, a. Turn down, like the term sheets that we have, because we were seeing some really strong growth and we're like, okay, maybe there's a way to keep building this in a more independent fashion.

And so I think, you know, like, uh, starting a company, it's a little bit like, you know, people go to school and they want to get to the next year and the next year and the next year, the next year. And so when you start a company, you know, like the next step is in the next funding round, like in 18, 12 or 18 months.

And there's that, that's that model that's be like, you know, present in everyday. You know, head, but that's all made up, you know, like it just, you know, there's just, people want to put money into your company, so you make them more money. Also, you make more money to Facebook and Google and, but you don't have to do that.

You know, like you, maybe you can raise a bit of money in the beginning if she needed to kickstart the whole business, but for a bunch of industries, a bunch of niches it's not needed. Uh, and so. It's not that we'll do it differently, but it's something that we've realized over time that we didn't need all those millions to build something that impacts people in a very positive way and that scale.

And yeah, I would say that's something that's really around. Yeah.

[00:30:09] Sjoerd Handgraaf: Wow. I mean, that's a fantastic, fantastic. I mean, I couldn't subscribe to that more like at Sierra tripe also we, we moved our company from a regionally, like more traditionally VC funded model to a, what is called a steward owned model. We are basically only employees can have sheriffs with voting rights.

And we did a sort of crowd investment rounds, which raised like 1.2 million, I believe. And then we bought out for a parts, the original investors. And now we're also like a self-funded company full autonomy, because we have a bigger mission than indeed like moving from round to round. And then. Going for an exit and then, well, whatever, like abandoning ship.

Yeah. And I agree that that's like the dominant model that you see in all the press tech crunch, especially in the startup scene as if that is the only method of financing. So I think that's a great lesson to bring out that are, there's more available. And

[00:31:00] Emmanuel Nataf: I think like it's my current battle, but like, uh, you know, when you see like the types of businesses that VCs.

Like actually, like, it depends on the VCs obviously, but a lot of VCs like truly put me off, like, you know, these days, you know, like all that money pulled into like, uh, oldest food delivery companies, uh, you know, creating like a, I dunno, like developing laziness. And like, I think I read an article. What was it like a society of, uh, servants, basically all those people, you know, on this kudos, like, you know, you know, bringing you your food and stuff, like all that crap, all those billions, you know, like.

Do you really want to work with those people? I don't know. Does it make sense? Does it work with your values? Yeah.

[00:31:40] Sjoerd Handgraaf: Yeah, no, I think that's like an, I agree, like that's something that not, I mean, you have so much to think about early on that. It's not, it's not something you immediately realize. And especially if you come from outside, that seems to be the, the, the dominating model, like you said.

And of course it works for, like, there are lots of industries or businesses. Yeah, it is required. Like if you do some big tech or deep tech, which just stuck. Yeah. It's just needed a lot of capital upfront then. Yeah. Then maybe that's the way, but it's not a, it's not the only way. I totally agree. So, yeah, let's end on that.

Let's hope that that reaches some ears in the future. Thanks a lot. And Manuel, thanks for your time and all the best to.

[00:32:16] Emmanuel Nataf: I thank you very much. Bye bye. Thank you for listening to two-sided the marketplace podcast. If you enjoyed today's show, don't forget to subscribe. If you listen on iTunes, we'd also love for you to rate and give us a review.

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