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Lenny Rachitsky Profile picture
@lennysan
Apr 26, 2021 • 9 tweets • 4 min read • Read on X
Take rates of 40 marketplaces, platforms, and more. Takeaways and surprises in thread 👇 Image
Takeaway #1: There is a relatively clear distinction between “platform” businesses taking 5-15% (which make it easier for you to run your business, e.g. @Patreon @SubstackInc), and Marketplaces taking 10-50% (which bring you new business as well, e.g. @DoorDash @BookCameo)
Takeaway #2: Differences in take rates are primarily driven by three factors: (1) whether you can drive new demand, (2) how much convenience you provide the seller, and (3) the level of competition in the market.

Take rate = Convenience + Demand - Competition
3/ For example:

Gumroad (8.50%): High convenience + Little demand gen - Medium competition

Substack (~13%): Very high convenience + Little demand gen - Medium competition

Twitch (50%): Very high convenience + Very high demand gen - Very low competition
4/ Surprises:

1. @OnlyFans (a platform that doesn’t bring any demand) is able to charge 20% (a rate normally reserved for marketplaces). This is because they solve a major pain point for their creators (e.g. accepting payment for sex work) and there isn’t much competition.
2. @Etsy's fees are at the low end of the spectrum for a marketplace (i.e. even lower than Substack, which doesn’t drive demand). This is probably because of heavy competition with Amazon.
3. @toptal is able to charge close to 40% as a labor marketplace. This is likely due to how much time and effort the platform saves both supply and demand.
4. @Twitch takes 50%. This likely speaks to the quality of the product and the significant network effects.

5. @Shutterstock and @GettyImages take up to 85%. This is likely due to how little work there is to get paid once you’ve uploaded your photos.
If you're looking for more, check out the full post which also includes:
âś… How to choose your take rate
âś… How to increase your take rate
âś… How to lower your take rate (and why)
lennysnewsletter.com/p/take-rates

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More from @lennysan

Lenny Rachitsky Profile picture
Sep 24, 2024
New data on the state of the product job market 🧵

1. Remote jobs are shrinking fast (down 35% from peak) Image
2. There’s been a shift to hiring more senior candidates

The chart below shows the proportion of open PM jobs by level over time.

If you look at the light blue and dark blue segments below (i.e. Senior and Lead/Senior++ roles), you can see they have definitely grown from early 2023 in the percentage of PMs being hired. In particular, Lead/Senior++ roles are growing their percentage of open roles the fastest. And the share of Entry/Mid-level roles (the pink segment) has decreased the most since early 2023.Image
3. More than one in five open PM roles is based in the San Francisco Bay Area. The share grew from 15.4% to over 20% in the past two years, and it appears to be growing further. Image
Read 7 tweets
Lenny Rachitsky Profile picture
Jul 23, 2024
The rise of product management over the past 25 years.

Huge growth for 20+ years, followed by a plateau over the past couple of years.

This tells us the PM role isn’t going through the hypergrowth it saw earlier this decade, but it’s also not shrinking. This seems like a good and healthy thing all around.

Numbers-wise, there are about 450,000 active PMs in the U.S. right now, and 2,500 to 4,500 are being hired each month.
Here are the top hirers of PM roles over the past few years: Image
As a comparison, here’s the engineering role over that same time frame—similar growth trajectory, also a bit of a slowdown in the past one or two years, though not as much of a slowdown as PMs. Again, this seems right and healthy.
Read 4 tweets
Lenny Rachitsky Profile picture
Feb 27, 2024
In most hiring processes, you’re lucky to get 45 minutes to chat with a candidate before having to make a thumbs-up or thumbs-down decision.

How do you use that precious time to get the most important information about the candidate?

For over a year now, I’ve been asking my illustrious podcast guests to share their favorite interview questions (nearly 150 guests now!), and the collection of questions that’s emerged is like nothing I’ve seen elsewhere. These are not just great questions—they are exceptionally good at pulling out the essential insights about the candidate in the least amount of time.

Below, I'll share some of my favorite high-signal-to-noise interview questions, including what to look for in a great answer, grouped by theme. To see the full list, don't miss today's newsletter post (link below).Image
How to learn the most about a candidate from a single interview question—High-signal-to-noise interview questions inspired by my 150+ podcast guests

Keep reading for some of my favorites 👇
lennysnewsletter.com/p/how-to-learn…
Theme: How do they handle the hard stuff?

Question 1: Talk me through your biggest product flop. What happened and what did you do about it?

“I look for people being brutally honest about how bad it was and why it failed. The rest of the interview, they’re trying to tell you all the wonderful things they did and all the accomplishments they had. And so I think the rawer the answer in terms of how bad it was and why, the better.”

—Annie Pearl, corporate vice president at @Microsoft, ex-CPO at @Calendly
Read 13 tweets
Lenny Rachitsky Profile picture
Jan 16, 2024
Every startup can be distilled into a simple equation.

And until you can express yours as one, you don’t fully understand your business.

Having this equation gives you a map for understanding your biggest growth drivers, your key inputs and output, and once your teams are aligned behind it, and the equations operationalized, you’ll experience a huge force multiplier—because every team will be focusing their energy on the same (high-leverage) levers.

I teamed up with @danhockenmaier to collect the detailed equations for the eight most common tech business models:

1. Bottom-up B2B SaaS with seat-based pricing
2. Bottom-up B2B SaaS with usage-based pricing
3. Top-down B2B SaaS
4. B2C subscription
5. B2C free (ads)
6. B2C marketplaces
7. B2B marketplaces
8. DTC/e-commerce

👇🧵Image
(Keep reading for a summary, or bookmark this post for later)
lennysnewsletter.com/p/the-math-for…
1. Bottom-up B2B SaaS with seat-based pricing

Examples: @Figma, @SlackHQ, @Zoom, @Adobe Creative Cloud, @Asana, @Jira

ARR = New ARR + Expansion ARR + Reactivation ARR – Churned ARR – Contraction ARRImage
Read 22 tweets
Lenny Rachitsky Profile picture
Sep 18, 2023
Some of my biggest surprises when researching paths to PMF for top B2B companies:

1. If you build it, they *will* come—if you have strong product-market fit.
Though it often takes years to find initial PMF, once you do, a common pattern across top startups is strong (and explosive) organic growth—primarily seen as cold inbound and word-of-mouth growth.

This was true for Segment, Loom, Dropbox, Canva, Sprig, Stytch, and most others.


Image
Image
Image
Image
2. Stop thinking of product-market fit as a single moment.

It can be, but it almost always isn't.

Instead, think of finding PMF as an ongoing process of finding stronger fit with more and more segments of the market.

Here's how @shishirmehrotra describes it: Image
Read 15 tweets
Lenny Rachitsky Profile picture
Sep 12, 2023
Though there will never be a foolproof formula for finding product-market fit, here’s my best attempt at creating a guide for B2B startups that'll save you much time and pain.

It's based on interviews and research into the PMF journeys of 25 top B2B startups.

Here's a peek: Image
Here's the full post: A guide for finding product-market fit in B2B

Inside:
1. A framework for finding PMF
2. Signs that you’re approaching PMF
3. What to do if you aren’t

It's one of my new all-time favorite posts, and I'm super proud of it.
lennysnewsletter.com/p/finding-prod…
@KiwiDenny I go into what exactly it looked like in the post itself.
Read 4 tweets

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