EP350 - Live Commerce Is Where E-commerce Was in 2005: Whatnot's Tom Verrilli

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Welcome to the Jason and scot Show, your source for the latest news and trends

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in the e-commerce industry.

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Featuring host Jason Retail Geek Goldberg, Chief Commerce Strategy Officer of

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Publicis, and scot Wingo, co-founder and CEO of ReFiBuy.

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Here are Jason and scot.

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Welcome to the Jason and scot Show. I'm your host, Jason Retail Geek Goldberg.

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And as usual, I'm here with your co-host, scot Wingo.

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Hey, Jason, and welcome back. Jason scot Show listeners. We are continuing

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our live series here from the Retail Club AI Festival in beautiful yet cloudy

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today, Huntington Beach, California. I'm grateful for cloudy after yesterday.

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Yes, we had a very sunny day.

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Joining us fresh off the main stage is Tom Verrilli. He is the chief product

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officer of one of Jason and I's passion, guilty pleasures, I guess is what you

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would call it. Whatnot. I'm not guilty.

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Yes, not at all. Whatnot. Thank you for having me, gents.

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Welcome to the show. We're excited to have you. So give us a little background.

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What did you do before Whatnot?

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I have a feeling I know what chief product officer does there,

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but let's make sure that everyone understands what's in it. Yeah, let's start there.

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So I'm really lucky. I get to lead the product and design teams at Whatnot.

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And for those of you who aren't familiar with, you know, tech product,

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that's basically how does the app work? How does it look? How do the features function?

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You know, whether it's tools for our sellers or whether or not it is things

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like discovery for buyers and all of the kind of like follow-on post-purchase

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stuff. Yeah, both sides of the equation. Both sides of the equation.

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So I've been at Whatnot for just on three years now. I think it's three years

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next week, actually, which is great.

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And prior to that, I spent just under seven years at Twitch.

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Which is obviously live streaming video games and a little bit of time in social

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before that. I was at Twitter back when it was Twitter and before that,

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believe it or not, I was in India running an e-commerce startup.

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So I've been a bit everywhere. You've been at this for a while?

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Just a little while. Thankfully, the greyhairs don't show up on a podcast.

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The key is to just sit next to someone that has more greyhairs.

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You're fine. Oh, great. Perfect.

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Do you have a lot of people are set up, a lot of marketplaces are set up where

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you have of a seller side and a buyer side.

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Is that kind of how you guys organize kind of underneath what you're doing? Broadly.

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I mean, I think for us, one of the things that sets live commerce apart is like

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just how much it is like a really high trust interaction because you can kind of see the seller.

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So we tend to be very over indexed while making sure that's true.

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So we have loosely speaking buyer, seller, and kind of trust as our three core

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pillars, but we're remarkably flat.

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So it's not, we don't spend a lot of time talking as orgs.

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It's much more just kind of like direct work with the teams.

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I'd love to dive into some slightly rudimentary questions because I'm going

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to be honest, in my world, I'm shocked by how many people are still not completely

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aware of you or paying enough attention to you.

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Like, just to put this in perspective, I talk to a lot of big brands and retailers on a daily basis.

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And a common question is like, what am I not paying attention to that I should?

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And two years ago, the answer for me was, disappointingly, it was TikTok shop, right?

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Right. Because tons of these huge momentum, fastest growing retailer in the

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history of mankind and tons of big consumer brands were like,

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that's that's some time waster for kids. We're not thinking about it. Right. Yeah.

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And so today they're all aware of it, whether they have a good strategy or not is another thing.

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And so my answer today is you like, thank you, sir, that, hey,

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the the thing you're not paying enough attention to in our space,

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that's very likely to be important to your future is whatnot.

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The next problem I have with everyone is they conflate two things,

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which in my mind are related but different, live streaming and short-form video commerce.

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And so sort of first question for you, are you like exclusively committed to

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one or the other? I feel like, I think I know the answer here, but-

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I think the short answer is no. Like, WhatNot Today is almost exclusively live streaming.

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And so for those of you not familiar, imagine, you know, a FaceTime,

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but you've got all of your commerce kind of integrated, a one-to-many broadcast

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with, you know, dozens or sometimes thousands of customers.

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And you are running, whether it's fixed price buy it now or auctions.

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So WhatNot Today, the heart and soul of it is live. But increasingly,

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you know, it's important to us just that we serve our customers and retailers well.

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Live as a format is incredible because it is in it's very,

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trust building you know you can talk to your seller you can interact with them for the

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seller it's the most revenue dense time that you can possibly spend

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you know customers are coming very deliberately to buy you get all of the same

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kind of advantages you used to have when you're in brick and mortar selling

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where your curation your personality your sales all really matter but you get

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like internet distribution,

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but we're kind of pragmatic as a company is the honest answer.

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And so as we grow and talk to more retailers, what they need are the things

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that we will build. But at its core will always be that idea of like,

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you know, we think live is probably the best format for selling,

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but it's not a like, we shall never, never.

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Fair. And then the other thing I always get is people misunderstand the categories

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that you're, that you cover, right? Like, so very, very commonly it's like,

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oh, there's some kind of collectible scarcity thing, cards or shoes or whatever. Yes.

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And can you talk to us a little bit about what categories are important on the

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platform? Sure. So believe it or not, WhatNot is live today in 224 categories

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in nine different countries.

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And kind of collectively across those, retailers made about $8 billion in sales

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last year. This year, they will comfortably double that.

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Does that mean your salary will double this year? Gosh, I hope so.

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Yeah, this seems reasonable to me. I don't know that that's exactly how that

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works, but with a little bit of luck.

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So we started in collectibles. Whatnot's kind of like origin story is actually,

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you know Funko Pops? You know the

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small collectible figurines with the big heads? I have mini Funko Pops.

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So do our co-founders. Yes. And they actually started just a static website

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for buying and trading Funko Pops.

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And then this is like December 2019, world changes, early 2020.

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And what they noticed was that people were going live on instagram and then

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they were trying to negotiate in the comments to exchange these things and so

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they kind of like shut down the company spent two weeks locked in a room recoded

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it to be full live commerce

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and then from there it went basically through the collectibles loop it went

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into kind of like pokemon cards sports cards but you know today fashion is actually

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our biggest vertical by order volume,

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and we are selling everything on the platform from live lobsters to louboutins

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from kind of like skateboards all the way through to kind of what I buy recently

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I think I bought a musical instrument on what not recently I bought an accordion,

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like you can actually get almost anything you can do you already know how to

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play the accordion or is this a new hobby I didn't but I annoy my team a lot

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with an analogy about accordions and so I just bought it as a prop brilliant

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I got it yeah yeah I have some of those too yeah yeah.

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So $16 billion, and you guys did a big funding raise recently when I think I

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saw the $16 billion number come out.

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We did. We were very lucky. We just raised our Series G that values the company

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at about $20 billion. Yeah. So those are some real numbers.

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I'm not an expert. That seems like a little momentum there. You know what?

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My take on this one when I talk to folks is like there was this period in the

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early 90s where everybody was like, okay, the internet exists,

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but are people really going to buy stuff on it? You used to hear this like no

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one's ever going to buy a car on the internet. That's crazy.

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And then you got to like the late 90s and it was like all right this might be

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a thing for collectibles

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it might be a thing that the nerds are going to use but I doubt that the average

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person is going to and kind of mid-2000s it was like okay this is inevitable

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everyone who sells is going to sell online the question is going to be how much

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of your business will be online and that obviously changes depending on the retailer

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yeah I think that's basically 2005 for live right now where it is quite clear

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to me that everything that is sold online will be sold live.

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How much of their channel mix live makes up for retailers, I think will vary.

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The sellers that are really the kind of like heart and soul of what it's today

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are actually like small brick and mortar businesses.

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Businesses who predominantly find when you sell on most marketplaces,

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your entire personality and supply chain gets reduced down to a listings detail

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page, which is homogenous.

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You all show up exactly the same on Amazon, whether or not you want.

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And, you know, there's a large number of goods in the world,

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but there is a finite number of them. And so you're selling the same thing someone

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else is selling in the exact same UI that someone else is selling it.

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And all you can do is compete on price.

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Whereas live selling gives you the opportunity to bring personality.

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It lets you bring knowledge. It lets you bring to your community.

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And it kind of really helps you build that core repeat customer as opposed to

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just kind of competing for search traffic.

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Got it. I haven't had a chance to shop on the fashion side. What are some examples?

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Are there any brands we would know that are kind of going live there?

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Or is this, again, like a local boutique? They've got some excess inventory.

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What's the model on the fashion side? At the moment, it's kind of started in

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two things. It's mostly local boutiques and small businesses,

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like more of the kind of mom and pop shop brick and mortar.

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The other thing that we've seen move really materially is the kind of like the

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TJ Maxx kind of model of people being like surplus inventory and surplus stock

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that they want to move on whatnot, where you are really volume sensitive and less margin sensitive.

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And the amazing thing about live commerce is there are sellers on whatnot who

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run an auction every three seconds.

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So it's like, here it is. And you just kind of, you can move,

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if you're doing that math, you can move a couple hundred items an hour.

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And it's really material. So it started mostly like in liquidation and it's

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starting to move up into the kind of like boutique retailers.

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And interestingly in fashion, one of the examples I really like is Invicta Watches,

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which is like an owner operator manufacturer down in Florida.

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I have seen this channel. Yeah.

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Invicta now have like three channels on whatnot and are kind of like reorienting

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basically their entire business around it because they can cut out that entire

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middle layer of distribution and just kind of go direct to the customer

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and they've got an incredible community and following like those guys are they're

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very entertaining yeah but like it doesn't have to be loud and brash there's

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a lot of people where we find that like you know the owner of the of the brand

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is the most compelling person to go shop with

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a good example i was talking yesterday to a couple based in houston called the don's luxury

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and they move about you know i think they said this year they'll be between

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60 and 80 million dollars of kind of like high-end consignment whether it's

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kind of like Birkin bags or, you know, Louboutins.

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And for them, it basically takes what was going to be a consignment store,

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and they're fighting for traffic, and they get to kind of build that community.

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We'll wait one second for that. Wait for the fire department? Yeah.

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Someone just heard they could get a Louboutin bag on whatnot,

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and they just— Red hot deals right here. They're rushing.

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The I'm more of a collectible person and when I've been on whatnot for a long

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time and it's really interesting I feel like there's a new type of a format

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added all the time so it used to be kind of like an auction then people would

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have a little store hung off the side sir and now they

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now I can't even keep track of all the different formats how do you guys how do you guys,

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how do you guys innovate in that way this is like coming from a merchant request

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the merchants are asking you for this stuff or you're just kind of like wow

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it'd be really cool if we did this almost exclusively from starting with the merchants.

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One of the secrets of product is to always believe your customer,

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but never necessarily listen to them exactly because people don't necessarily

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understand all the nuance.

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But the way that we work, and maybe one of the differences between Whatnot and

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the dozen or so live startups that started and didn't last is we think about

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growth in a category by category manner.

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So as I said, we started only in Funkos, then it became cards,

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then you slowly move out and you go and talk to a seller in that vertical and

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you work out what do you need?

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So one of the newest verticals on what not is like fresh and specialty foods.

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So I wasn't kidding when I said earlier that we sell everything from lobsters to Louboutins.

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There is a guy not too far from here called scot.

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He's down in San Diego and he spells his name wrong though. Correct.

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I'm sure he does. There's only one way. Yeah.

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And he was a massive Pokemon buyer and whatnot. And he emailed our CEO one day

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and said, I, I own a company called, you know, e fish co we're done on the dock in San Diego.

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And I think people would love to buy like, you know, Farm to table,

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seed to table goods on whatnot. How can we do it?

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And later on that week, we flew out our co-founder and an engineering team to his place.

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And they were like, all right, what do you need? And so it's things like,

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you know, obviously when we're selling you collectibles, it's okay if it arrives

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in seven to eight days on USPS.

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And it's fine if there's a delay in shipping. It's annoying,

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but like you'll live. No one is waiting eight days for their lobster.

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So you've got to go in and say, okay, great. How do we get, you know, overnight shipping?

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How do we start handling, you know, the dry ice of the world and all of those

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things. And so each time you're seeing that new format pop up,

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scot, that's us sitting down with a seller or a collection of sellers and saying,

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what do you need? Are you margin sensitive? How can we build better margin formats?

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Are you volume sensitive?

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Maybe we can help you customize the length of your auctions.

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Eventually, our biggest sellers now will have multiple channels running 24-7.

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And one of the things that I'm pretty passionate about at the moment is how

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do we help you with more revenue per hour?

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Because eventually, we run against the clock. Physics is the problem for some

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of our sellers as opposed to...

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Yeah, there's formats like Dutch auctions.

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Correct. What are the formats available right now? So currently,

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we've got a mixture. We've got two auction formats. One is just a classic auction

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where you can start it anywhere from, say, 30 seconds, and it just runs as a classic countdown.

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We've got that auction does the little increments of plus 10 seconds when there's

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a bid in the last 10 seconds, and that's one. It's an extended bid.

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It's what people basically use to try and make sure that they optimize for price.

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And then we have what we call sudden death auctions, where you can set the auction

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anywhere from two and a half to 10 seconds. And when the clock runs out, the clock runs out.

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And that's your old classic V1 internet experience of sniping.

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You're trying to win the auction at the last second. And that tends to be for

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folks who are trying to move a pallet of shoes, you know, and how do we kind of move through those?

00:13:33.170 --> 00:13:35.660
And then within our fixed price formats, we've got a couple of different ones.

00:13:35.660 --> 00:13:37.780
We've got your classic, just straight buy it now.

00:13:38.199 --> 00:13:41.619
We've got what we call flash sales, which is the ability to kind of like run

00:13:41.619 --> 00:13:44.369
a large group of things in a very limited window for discounts.

00:13:44.369 --> 00:13:46.039
So 50% off for the next 30 seconds.

00:13:46.533 --> 00:13:48.420
We've got a thing called party purchase, which we really like,

00:13:48.420 --> 00:13:52.500
which is kind of taking the early internet group buying theory and basically.

00:13:53.140 --> 00:13:55.490
Setting a series of milestones. that seem to have an experience this way.

00:13:55.520 --> 00:13:58.350
Basically, you can incrementally drop the price depending on the more you set,

00:13:58.350 --> 00:14:01.100
but that's all built into the UI and you can kind of see, you know.

00:14:01.100 --> 00:14:06.560
So the lobster guy could say, we just got 1,000 in and if I can sell 500.

00:14:06.560 --> 00:14:10.800
They're 999 unless I sell 250 and then they're 30% off. And if we sell 1,000,

00:14:10.800 --> 00:14:12.020
it's 50% off for everybody.

00:14:12.440 --> 00:14:15.720
And all of that kind of like happens as it rolls. And then as you say,

00:14:15.720 --> 00:14:18.140
we're like always trying to build and experiment with new formats.

00:14:18.140 --> 00:14:21.240
So, you know, later on this year, there's a lot more that I think we can do

00:14:21.240 --> 00:14:24.460
with helping sellers kind of get, you know, different things like you know today

00:14:24.460 --> 00:14:27.130
one of the the hallmarks of whatnot is you've got to you've got to basically ship,

00:14:27.650 --> 00:14:31.160
as soon as you sell. How can we help people who maybe want to build custom goods

00:14:31.160 --> 00:14:35.240
get more of those kind of like pre-ordering type things, which would also help

00:14:35.240 --> 00:14:38.640
with collectibles when there's like really big releases. And so we're always

00:14:38.640 --> 00:14:39.650
trying to work through those formats.

00:14:39.990 --> 00:14:42.900
Do you guys get involved in fulfillment at all today? Is that?

00:14:43.400 --> 00:14:46.429
We don't currently. Yeah. It's very vertically integrated for the buyer.

00:14:46.659 --> 00:14:50.739
So there's a lot of marketplaces where after you sell, you as the seller then

00:14:50.739 --> 00:14:52.839
have to go and buy the shipping label and you've got to do the math in your

00:14:52.839 --> 00:14:55.149
head of like margin on whatnot.

00:14:55.149 --> 00:14:58.579
All of that's vertically integrated so the buyer pays shipping and then the

00:14:58.579 --> 00:15:02.880
seller basically can just immediately you know kind of like fulfill from there

00:15:03.070 --> 00:15:06.370
and we support you know a variety of shipping providers globally for that

00:15:06.729 --> 00:15:10.810
but we're not currently in the fulfillment game yeah so it's something i'm very curious about yeah.

00:15:11.820 --> 00:15:17.430
In tradition, like very early marketplaces, one of the early problems was trust. Yes.

00:15:17.770 --> 00:15:23.100
And so how do you guys think about trust? Like what do you do to instill confidence,

00:15:23.580 --> 00:15:26.710
in buyers about the sellers on your platform? Yeah, listen, I think trust is

00:15:26.710 --> 00:15:28.170
the question in e-commerce, right?

00:15:28.330 --> 00:15:31.700
Because unlike if you're working in socials, like where all someone's doing

00:15:31.700 --> 00:15:34.200
is just giving their time, here, it's my credit card, it's my money.

00:15:34.909 --> 00:15:38.070
So trust has always kind of been right at the fore for that for us.

00:15:38.070 --> 00:15:40.790
We have very kind of vigorous, like both buyer protection policies and seller

00:15:40.790 --> 00:15:43.070
protection. policies as to how those things come together.

00:15:43.533 --> 00:15:46.590
The first thing obviously is live video is great for that because there is this

00:15:46.590 --> 00:15:50.210
wonderful artifact of what you were selling and what you said about it and what

00:15:50.210 --> 00:15:52.870
I asked for in the chat. We've got all of that on fire.

00:15:53.200 --> 00:15:55.330
So that tends to make things easier in a dispute where like,

00:15:55.540 --> 00:15:58.710
no, no, I said seven and you sent me an eight and you can go back to the tape

00:15:59.000 --> 00:16:00.010
as if it's a football game.

00:16:00.366 --> 00:16:04.099
And that tends to be pretty useful. And then again, vertical by vertical,

00:16:04.099 --> 00:16:05.629
there's lots of nuance in the policy.

00:16:05.629 --> 00:16:08.609
So something like in collectibles in sports cards, one of the questions is like,

00:16:08.609 --> 00:16:12.679
are you ensuring a product against the value of the purchase or its collector's

00:16:12.679 --> 00:16:16.349
value which may be very different than the price that you bought it at and whatnot's

00:16:16.349 --> 00:16:18.279
kind of like high value items policy has always been

00:16:18.659 --> 00:16:21.359
we'll make it right for the buyer at the value of the item not what they paid

00:16:21.359 --> 00:16:24.699
for it because those two things in a marketplace can differ pretty meaningfully

00:16:25.049 --> 00:16:28.870
and then similarly it helps with things like you know everybody in retail is

00:16:28.870 --> 00:16:32.170
worried about like counterfeits and supply chain and all of that really helps

00:16:32.460 --> 00:16:35.570
that we've got all of that on video and can kind of run it down and then the

00:16:35.570 --> 00:16:38.880
last thing for us is we've always taken a pretty active role in verifying our sellers up front

00:16:39.230 --> 00:16:42.580
so they go through a lot of different steps of verification before they sell.

00:16:43.160 --> 00:16:47.470
And then you've got the advantage, obviously, of very real-time responses from

00:16:47.470 --> 00:16:50.720
folks in the chat where, you know, scot, you could probably pick a fake in

00:16:50.720 --> 00:16:53.340
particular collectibles categories because you're passionate about it.

00:16:53.550 --> 00:16:57.000
So we've got like a really active community element as well that doesn't typically

00:16:57.000 --> 00:16:59.110
exist in common retail. Yeah.

00:16:59.680 --> 00:17:01.799
Seems like the competition's waking up.

00:17:02.519 --> 00:17:05.639
I've been working with eBay for decades and they go through these.

00:17:06.179 --> 00:17:08.959
They're not what I would call a super innovative company right now,

00:17:09.266 --> 00:17:12.610
but I think I think they've ramped up the eBay live format to try to kind of

00:17:12.610 --> 00:17:14.120
counteract what you guys are doing.

00:17:15.379 --> 00:17:17.969
Do you feel like, are you guys feeling that in your business or is it,

00:17:18.209 --> 00:17:21.460
you know, how do you feel about the competitive landscape these days?

00:17:21.670 --> 00:17:26.640
Listen, I think a format is not a moat, right? So like if you're going to anchor

00:17:26.640 --> 00:17:29.250
your entire business on where the only people doing this particular type,

00:17:29.250 --> 00:17:30.610
I think that's probably a short lived business.

00:17:31.010 --> 00:17:35.540
For us, the really thing that sets Whatnot apart is the incredible sellers who

00:17:35.540 --> 00:17:39.040
are alive there and like the buyers who show up every day with that very specific

00:17:39.040 --> 00:17:40.490
high intent to kind of shop.

00:17:41.000 --> 00:17:43.380
And it's kind of interesting. one of the things we were talking about on main

00:17:43.380 --> 00:17:47.020
stage is there's a type of high intent buying, which is like very,

00:17:47.420 --> 00:17:49.820
I want, I need, you know, I need to replace my air filters.

00:17:49.920 --> 00:17:53.210
I've got like, I need this particular light bulb. It's very hyper-specific and

00:17:53.210 --> 00:17:55.380
a lot of e-commerce is optimized for that.

00:17:55.833 --> 00:17:58.200
Whatnot shoppers are much more like people who go to the mall,

00:17:58.700 --> 00:18:01.660
come with the intention to shop, but I don't know specifically what I want.

00:18:01.660 --> 00:18:04.350
It's kind of like, I go to the mall because I know I've got a bunch of weddings

00:18:04.350 --> 00:18:07.810
coming up this summer and I need clothes, but it's not like I know I need a

00:18:07.810 --> 00:18:09.420
crisp white Oxford, right?

00:18:09.700 --> 00:18:13.150
And so So whatnot buyers come in every day with incredible high intent.

00:18:13.469 --> 00:18:19.339
They spend upwards of 90 minutes a day shopping on whatnot. They're very engaged from that perspective.

00:18:19.519 --> 00:18:23.019
And that core community of buyer and seller and the degree of retained customer

00:18:23.019 --> 00:18:25.349
that you build is ultimately the value proposition.

00:18:26.860 --> 00:18:29.640
U.S. retail was, what, $7.5 trillion last year?

00:18:30.066 --> 00:18:34.080
If live really is an omni-channel for everyone participating in retail,

00:18:34.080 --> 00:18:36.870
there's no way we will be the only people competing in that.

00:18:36.870 --> 00:18:39.090
But we are currently the vast majority of that market.

00:18:39.430 --> 00:18:44.990
And I think we have both the best offerings in terms of product as well as price for sellers.

00:18:45.210 --> 00:18:48.849
And so I spend remarkably little time, scot, worrying about what anyone else

00:18:48.849 --> 00:18:52.269
is building and most of the time trying to make sure you've got enough feedback.

00:18:52.269 --> 00:18:56.029
I have a feeling that's a much larger list that you worry about than what someone

00:18:56.029 --> 00:18:58.540
else is up to. I'm curious.

00:18:59.650 --> 00:19:03.120
I mentioned you as someone that big brands should be watching.

00:19:03.600 --> 00:19:09.010
If a big bank came to you and said hey like how should we be working with or

00:19:09.010 --> 00:19:10.300
thinking about whatnot like.

00:19:11.280 --> 00:19:16.179
What is the best advice? Like with if you're a big apparel manufacturer and

00:19:16.179 --> 00:19:19.669
you just found out from the show that apparel is a significant category on whatnot.

00:19:19.669 --> 00:19:24.869
Yeah. Like, do I need to go recruit a bunch of presenters and get them to sign up on the platform?

00:19:25.189 --> 00:19:30.349
Would you help do matchmaking for me? Like should should a big apparel manufacturer

00:19:30.349 --> 00:19:31.839
have a direct relationship on whatnot?

00:19:31.839 --> 00:19:34.399
Listen, as I said earlier, we are delightful pragmatists. Yeah,

00:19:34.399 --> 00:19:38.439
it sounds like I heard if I just have a few lobster that the founder will come

00:19:38.439 --> 00:19:42.269
to my house and work out a selling arrangement. So I'm assuming if Abercrombie

00:19:42.269 --> 00:19:43.459
& Fitch calls, you're available.

00:19:44.109 --> 00:19:47.219
I imagine if somebody like Abercrombie & Fitch called, yes, we would probably take that call.

00:19:47.219 --> 00:19:50.759
But the success that we've seen for folks, and if you take Invictor as a good

00:19:50.759 --> 00:19:55.789
example of a very real brand selling tens of millions, what we found is there's

00:19:55.789 --> 00:19:59.229
a consistency required in order to kind of like, it's not a we can do a show

00:19:59.229 --> 00:20:01.239
a quarter or like we'll do a test show.

00:20:01.449 --> 00:20:03.459
You kind of got to come in and you got to build your audience.

00:20:03.629 --> 00:20:06.199
You got to build that kind of loyal customer base. And one of the amazing things

00:20:06.199 --> 00:20:08.950
about whatnot is just how much repeat buying there is.

00:20:09.120 --> 00:20:12.280
So for the vast majority of our sellers in any given show, more than half of

00:20:12.280 --> 00:20:13.630
their customers are repeat buyers.

00:20:14.100 --> 00:20:17.400
And so if you want to come in and really take advantage of live,

00:20:17.400 --> 00:20:20.670
I think it is about how do you commit to saying, great, we're going to go live

00:20:20.670 --> 00:20:24.470
two, three hours a day, every day, Monday to Friday, and start building that audience.

00:20:24.730 --> 00:20:29.180
And then our best sellers end up doing things like a theme show on Friday,

00:20:29.180 --> 00:20:32.660
we're going to have a bag show on Saturday, it might be shoes.

00:20:32.960 --> 00:20:35.880
And they try and make sure that the seller there is kind of catering to the

00:20:35.880 --> 00:20:38.629
audience who's really interested in those things. And then the other one is...

00:20:39.270 --> 00:20:43.430
You know understand if you're looking for margin or if you're looking for volume

00:20:43.650 --> 00:20:47.780
and then like tune your your formats accordingly am i looking to make sure you

00:20:47.780 --> 00:20:50.799
know we've got some of our best bag sellers are obviously not going to let go

00:20:50.799 --> 00:20:53.400
of a louboutin for less than it is worth that would be crazy,

00:20:53.900 --> 00:20:56.650
and maybe my favorite fun fact that i've learned at what in the last three years

00:20:56.650 --> 00:20:58.530
is lego sets never depreciate in value,

00:20:59.080 --> 00:21:02.440
they apparently like you know i'm glad you said that this is part of my whenever

00:21:02.440 --> 00:21:07.070
a big star wars set comes out i buy three of them one one to keep boxed is collectible

00:21:07.070 --> 00:21:10.320
one to open and play with and one to sell in two years later.

00:21:10.320 --> 00:21:13.330
Yep. And it pays for the other two. Right. So my wife thought I was crazy,

00:21:13.330 --> 00:21:16.269
but I've replicated this. That does not prove that you're not crazy.

00:21:16.269 --> 00:21:20.800
However, yes, I am crazy, but not about that one. Passionate and crazy is a very fine line. Yes.

00:21:22.259 --> 00:21:24.100
But like if you're, if you were coming to kind of, you know,

00:21:24.100 --> 00:21:26.720
if Lego was coming to talk to us, obviously Lego wants to make sure that they're

00:21:26.720 --> 00:21:29.970
selling those things at full retail. And so it's a very different show set up.

00:21:30.330 --> 00:21:33.200
But the nice thing that I would honestly say is if you're curious about whatnot

00:21:33.200 --> 00:21:37.020
from, from listening to this, or you've been listening to Jason long enough, go and watch whatnot.

00:21:37.290 --> 00:21:40.789
Spend some time on the platform, watch the sellers because the amazing thing

00:21:40.789 --> 00:21:44.389
about live from my perspective is it's a blank canvas, right?

00:21:44.389 --> 00:21:46.919
There's a lot of things that sellers can do. And so most of the innovation on

00:21:46.919 --> 00:21:50.229
the platform, as much as I appreciate the compliment earlier, does not come from me.

00:21:50.419 --> 00:21:53.339
It comes from a seller who's pushing a thing and trying a thing and you kind

00:21:53.339 --> 00:21:55.169
of watch them almost break it.

00:21:55.529 --> 00:21:59.509
And then you say, great, how do I fix that for you so that it works better? Yeah.

00:21:59.859 --> 00:22:03.219
Speaking of almost breaking things, in the early days of whatnot,

00:22:03.219 --> 00:22:05.849
I would log on, there'd be like three or four live streams, right,

00:22:05.849 --> 00:22:08.609
in my little part of like maybe comic collectibles or something.

00:22:08.933 --> 00:22:12.090
And I wouldn't, you know, I'm sure there was more going on, but I could kind of see that.

00:22:12.600 --> 00:22:16.400
Now I go in there, and it's just like this massive amount of everything.

00:22:16.400 --> 00:22:20.230
There's always at least for my world, hundreds of things going on in one category.

00:22:20.230 --> 00:22:23.960
Yes, then I met you multiply that, you said 224, 24.

00:22:24.980 --> 00:22:29.320
And it's always very crisp and tight because you have these timed auctions.

00:22:29.320 --> 00:22:30.632
That matters, right? Yes.

00:22:31.019 --> 00:22:36.499
So how have you guys tackled that technological problem of, like,

00:22:36.499 --> 00:22:37.529
how many streams are running it?

00:22:38.589 --> 00:22:41.969
This may be, feel free not to answer this, but it feels like there's thousands

00:22:41.969 --> 00:22:43.539
of streams running at any time.

00:22:43.939 --> 00:22:47.719
And then on the other side, there's millions of people picking from those streams. Correct.

00:22:48.289 --> 00:22:51.489
And then it also works really well on desktop, mobile, iPad.

00:22:51.729 --> 00:22:55.139
So you've got a lot going on there. We do. As a technologist,

00:22:55.139 --> 00:22:56.029
I'm kind of curious, like,

00:22:56.750 --> 00:23:00.170
But it feels like you have an insanely small team, too. We do.

00:23:01.010 --> 00:23:04.270
How does all that work? A pretty small team relative to the technology.

00:23:04.270 --> 00:23:09.440
I think some of it is you hire the best people, and that doesn't mean you need loads of them.

00:23:10.670 --> 00:23:13.870
I think part of it, though, just comes from focus. If you decide the things

00:23:13.870 --> 00:23:16.200
that you want to be really good at, and then you kind of apply yourselves at

00:23:16.200 --> 00:23:19.510
that, there tends to be payoffs. So some of the crispness in the discovery you're

00:23:19.510 --> 00:23:21.440
describing is a format advantage.

00:23:21.780 --> 00:23:25.269
If you think about a traditional retail, you basically have the commerce signals.

00:23:25.599 --> 00:23:30.049
If you think about traditional social you get all of the engagement watch time likes chats

00:23:30.409 --> 00:23:33.959
i get both and so i have this capacity of not just this the lego streams you

00:23:33.959 --> 00:23:36.279
might look at scot but also the ones where you comment

00:23:36.619 --> 00:23:40.279
ask questions the times when you've purchased so we've got a lot of advantages

00:23:40.279 --> 00:23:45.449
that we can interact those two things yeah and then sometimes that format trade-off is like live.

00:23:46.230 --> 00:23:50.250
Really matters if you get there one second after the auction start like ended or 10 seconds before,

00:23:50.770 --> 00:23:54.390
and so we had to go and tackle the like how do you make your recommendations incredibly fast

00:23:54.660 --> 00:23:58.330
problem really really early most companies are still doing like what we would

00:23:58.330 --> 00:24:02.060
call batch recommendations where overnight they'll calculate what is the thing

00:24:02.060 --> 00:24:05.290
that jason might want to buy tomorrow and then if jason shows up we basically

00:24:05.290 --> 00:24:08.030
filter everything on the site for the list that we calculated last night,

00:24:08.599 --> 00:24:11.399
on whatnot what is being sold this minute is not predictive of what's being

00:24:11.399 --> 00:24:14.859
sold next minute and so we're doing it as jason shows up yeah and that has these

00:24:14.859 --> 00:24:18.269
real compound advantages over time and like you know some of it is earlier this

00:24:18.269 --> 00:24:19.269
year we actually went and acquired,

00:24:19.849 --> 00:24:21.479
an AI company in New York called Shaped.

00:24:21.849 --> 00:24:26.920
And their particular technology is how do you extract and extrapolate from the

00:24:26.920 --> 00:24:28.830
data you have really rich understandings.

00:24:28.830 --> 00:24:33.330
So we would know that you're a Star Wars Lego nerd, not just a Lego nerd generally,

00:24:33.500 --> 00:24:37.980
and not just a Lego shopper broadly, because my mom buys Lego and whatnot for her grandkids.

00:24:38.170 --> 00:24:41.220
She is not the same customer as you, and she doesn't want to be in the same auctions as you.

00:24:41.390 --> 00:24:44.650
Yeah, yeah. You must have to have your own codex for the video and all kinds

00:24:44.650 --> 00:24:48.720
of stuff. Yeah, I'd actually like a filter to make sure I don't bid on any auctions

00:24:48.720 --> 00:24:50.730
against scot. That would be a bad idea. Yeah.

00:24:53.280 --> 00:24:57.340
Well, Tom, I know you have a lot going on here, and we promised 30 minutes.

00:24:57.340 --> 00:25:00.280
So, unfortunately, we're out of time, but we really appreciate you coming by.

00:25:00.280 --> 00:25:01.830
Thanks, boys. I'm glad you're having fun. Yeah, you guys.

00:25:02.550 --> 00:25:05.730
It was great to talk to you, and we'll look forward to the lobster dinner tonight.

00:25:06.099 --> 00:25:08.309
And until next time, happy e-commercing.

00:25:09.739 --> 00:25:14.109
You've been listening to The Jason and scot Show. For all the latest news and

00:25:14.109 --> 00:25:21.159
trends on e-commerce and shopper marketing, subscribe to us on iTunes or visit jasonandscot.com.