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.Listen now on Apple, Spotify, Google, Overcast, and YouTube.—Where to find Dan Hockenmaier:• Twitter: https://twitter.com/danhockenmaier• LinkedIn: https://www.linkedin.com/in/dan-hock/• Website: https://www.danhock.com/—Where to find Lenny:• Newsletter: https://www.lennysnewsletter.com• Twitter: https://twitter.com/lennysan• LinkedIn: https://www.linkedin.com/in/lennyrachitsky/—Thank you to our wonderful sponsors for making this episode possible:• Amplitude: https://amplitude.com/• Flatfile: https://www.flatfile.com/lenny• Eppo: https://www.geteppo.com/—Referenced:• Reforge: https://www.reforge.com/• Casey Winters on Lenny’s Podcast: https://podcasts.apple.com/us/podcast/how-to-sell-your-ideas-and-rise-within-your-company• Faire: https://www.faire.com/• Dan’s blog post on the future of marketplaces: https://www.danhock.com/posts/the-future-of-marketplaces• Careers at Faire: https://www.faire.com/careers—In this episode, we cover:(00:43) Dan’s background(04:01) What is a growth model?(07:20) The building blocks of a growth model for your own business(10:22) The value in building your own model(11:12) The importance of retention over growth (14:49) Getting started building your model(19:18) The growth model at Thumbtack(20:36) The importance of the early user experience for retention(25:02) Why is a marketplace a good business?(28:23) Health metrics for marketplaces(33:47) Supply and demand, and why you shouldn’t neglect demand(36:23) The role of ROI equations and how to use them(39:16) Why you should tread lightly when working with marketplaces(42:43) Expanding marketplaces(46:50) How marketplaces can add a SaaS offering, and why adding a marketplace to a SaaS business is trickier(49:47) When is there an opportunity to unbundle?(54:43) B2B marketplaces (56:36) What is fragmentation?(58:46) The future of marketplaces—Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Get full access to Lenny's Newsletter at www.lennysnewsletter.com/subscribe