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Oct 7, 2016 · 27m · 20vc

20VC: What Makes A Great marketplace Founder, The Key Metrics Marketplace Success Is Centred On & 3 Ways To Prove To Investors You Are A Domain Expert with Karthik Sridharan, Founder & CEO @ Kinnek

Karthik Sridharan · 18m spoken Harry Stebbings · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The 20 Minute VC, host Harry Stebbings speaks with Kinnek Founder and CEO Karthik Sridharan about building a B2B market network for SMB procurement, prioritizing marketplace liquidity over GMV, and leveraging deep domain expertise for successful venture fundraising.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 27.3% of the talking time here. How this is scored →

Harry as informed peer 2.5 Guest teaching 3.8 Guest disagreement 0.5 Harry pushing back 1.7
05100:0010:0020:002:21–5:17 · Harry as informed peer 1/10 The Founding Story and Inspiration Behind Kinnek Harry asks a standard conversational opening about Kinnek's origin story. Karthik outlines how he and his co-founder discovered SMB procurement pain points while researching small businesses in New York.5:17–8:21 · Harry as informed peer 2/10 Differentiating Marketplaces and Market Networks Harry relays an investor question about market networks versus marketplaces. Karthik educates the host on how Kinnek captures the broader B2B interaction graph rather than focusing purely on transactional GMV.8:21–12:08 · Harry as informed peer 3/10 GMV vs. Liquidity in Marketplace Dynamics Harry brings up a founder dinner debate about GMV as the fundamental metric. Karthik reframes the topic, explaining why liquidity SLAs are a far more fundamental health indicator than top-line GMV.12:08–15:12 · Harry as informed peer 3/10 Competitive Landscape and International Expansion Plans Harry asks about competition from Alibaba and presses Karthik when his initial answer stays high-level. Karthik clarifies how local SMB requirements insulate Kinnek from overseas trade directories.15:12–20:37 · Harry as informed peer 4/10 Key Lessons and Strategies for Startup Fundraising Karthik outlines three core lessons for startup fundraising. Harry contributes informed VC ecosystem perspective by highlighting the common founder mistake of chasing vanity intros to famous investors.20:37–24:51 · Harry as informed peer 2/10 Quick Fire Round: Insights, Books, and Vision In the quick fire round, Harry poses a curveball question asking for advice to marketplace investors. Karthik provides structured criteria on how investors should grill founders on marketplace dynamics.2:21–5:17 · Guest teaching 2/10 The Founding Story and Inspiration Behind Kinnek Harry asks a standard conversational opening about Kinnek's origin story. Karthik outlines how he and his co-founder discovered SMB procurement pain points while researching small businesses in New York.5:17–8:21 · Guest teaching 5/10 Differentiating Marketplaces and Market Networks Harry relays an investor question about market networks versus marketplaces. Karthik educates the host on how Kinnek captures the broader B2B interaction graph rather than focusing purely on transactional GMV.8:21–12:08 · Guest teaching 5/10 GMV vs. Liquidity in Marketplace Dynamics Harry brings up a founder dinner debate about GMV as the fundamental metric. Karthik reframes the topic, explaining why liquidity SLAs are a far more fundamental health indicator than top-line GMV.12:08–15:12 · Guest teaching 4/10 Competitive Landscape and International Expansion Plans Harry asks about competition from Alibaba and presses Karthik when his initial answer stays high-level. Karthik clarifies how local SMB requirements insulate Kinnek from overseas trade directories.15:12–20:37 · Guest teaching 3/10 Key Lessons and Strategies for Startup Fundraising Karthik outlines three core lessons for startup fundraising. Harry contributes informed VC ecosystem perspective by highlighting the common founder mistake of chasing vanity intros to famous investors.20:37–24:51 · Guest teaching 4/10 Quick Fire Round: Insights, Books, and Vision In the quick fire round, Harry poses a curveball question asking for advice to marketplace investors. Karthik provides structured criteria on how investors should grill founders on marketplace dynamics.2:21–5:17 · Guest disagreement 0/10 The Founding Story and Inspiration Behind Kinnek Harry asks a standard conversational opening about Kinnek's origin story. Karthik outlines how he and his co-founder discovered SMB procurement pain points while researching small businesses in New York.5:17–8:21 · Guest disagreement 0/10 Differentiating Marketplaces and Market Networks Harry relays an investor question about market networks versus marketplaces. Karthik educates the host on how Kinnek captures the broader B2B interaction graph rather than focusing purely on transactional GMV.8:21–12:08 · Guest disagreement 1/10 GMV vs. Liquidity in Marketplace Dynamics Harry brings up a founder dinner debate about GMV as the fundamental metric. Karthik reframes the topic, explaining why liquidity SLAs are a far more fundamental health indicator than top-line GMV.12:08–15:12 · Guest disagreement 0/10 Competitive Landscape and International Expansion Plans Harry asks about competition from Alibaba and presses Karthik when his initial answer stays high-level. Karthik clarifies how local SMB requirements insulate Kinnek from overseas trade directories.15:12–20:37 · Guest disagreement 1/10 Key Lessons and Strategies for Startup Fundraising Karthik outlines three core lessons for startup fundraising. Harry contributes informed VC ecosystem perspective by highlighting the common founder mistake of chasing vanity intros to famous investors.20:37–24:51 · Guest disagreement 1/10 Quick Fire Round: Insights, Books, and Vision In the quick fire round, Harry poses a curveball question asking for advice to marketplace investors. Karthik provides structured criteria on how investors should grill founders on marketplace dynamics.2:21–5:17 · Harry pushing back 0/10 The Founding Story and Inspiration Behind Kinnek Harry asks a standard conversational opening about Kinnek's origin story. Karthik outlines how he and his co-founder discovered SMB procurement pain points while researching small businesses in New York.5:17–8:21 · Harry pushing back 1/10 Differentiating Marketplaces and Market Networks Harry relays an investor question about market networks versus marketplaces. Karthik educates the host on how Kinnek captures the broader B2B interaction graph rather than focusing purely on transactional GMV.8:21–12:08 · Harry pushing back 2/10 GMV vs. Liquidity in Marketplace Dynamics Harry brings up a founder dinner debate about GMV as the fundamental metric. Karthik reframes the topic, explaining why liquidity SLAs are a far more fundamental health indicator than top-line GMV.12:08–15:12 · Harry pushing back 4/10 Competitive Landscape and International Expansion Plans Harry asks about competition from Alibaba and presses Karthik when his initial answer stays high-level. Karthik clarifies how local SMB requirements insulate Kinnek from overseas trade directories.15:12–20:37 · Harry pushing back 1/10 Key Lessons and Strategies for Startup Fundraising Karthik outlines three core lessons for startup fundraising. Harry contributes informed VC ecosystem perspective by highlighting the common founder mistake of chasing vanity intros to famous investors.20:37–24:51 · Harry pushing back 2/10 Quick Fire Round: Insights, Books, and Vision In the quick fire round, Harry poses a curveball question asking for advice to marketplace investors. Karthik provides structured criteria on how investors should grill founders on marketplace dynamics.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 81.6% · guest 18.4%0:00 · Harry 81.6% · guest 18.4%3:00 · Harry 14.7% · guest 85.3%3:00 · Harry 14.7% · guest 85.3%6:00 · Harry 14.2% · guest 85.8%6:00 · Harry 14.2% · guest 85.8%9:00 · Harry 0% · guest 100%9:00 · Harry 0% · guest 100%12:00 · Harry 15% · guest 85%12:00 · Harry 15% · guest 85%15:00 · Harry 14.9% · guest 85.1%15:00 · Harry 14.9% · guest 85.1%18:00 · Harry 17.6% · guest 82.4%18:00 · Harry 17.6% · guest 82.4%21:00 · Harry 9.6% · guest 90.4%21:00 · Harry 9.6% · guest 90.4%24:00 · Harry 70.4% · guest 29.6%24:00 · Harry 70.4% · guest 29.6%27:00 · Harry 100% · guest 0%27:00 · Harry 100% · guest 0%
Sharpest disagreement ▶ 11:38 Challenging GMV hyper-focus as running before crawling

Karthik firmly rejects the common founder obsession with GMV, arguing that focusing on GMV before establishing liquidity SLAs is like trying to run before crawling.

 Hardest push from Harry ▶ 14:00 Harry presses on Asia expansion plans

Harry interrupts after Karthik gives a high-level explanation of Alibaba to directly demand whether expanding into Asia is actually part of Kinnek's explicit roadmap.

 Biggest teaching moment ▶ 9:38 Explaining the B2B network graph vs transactional marketplace

Karthik reframes traditional marketplace theory, educating the host on how owning non-monetary communication edges creates a far more defensible B2B network graph.

 Harry holds his own ▶ 19:23 Harry highlights the flaw of vanity VC intros

Harry demonstrates keen industry insight by defining the 'glory intro' phenomenon, explaining how founders mistakenly target famous VCs who do not invest in their sector.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
The Founding Story and Inspiration Behind Kinnek 1200 Harry asks a standard conversational opening about Kinnek's origin story. Karthik outlines how he and his co-founder discovered SMB procurement pain points while researching small businesses in New York.
Differentiating Marketplaces and Market Networks 2501 Harry relays an investor question about market networks versus marketplaces. Karthik educates the host on how Kinnek captures the broader B2B interaction graph rather than focusing purely on transactional GMV.
GMV vs. Liquidity in Marketplace Dynamics 3512 Harry brings up a founder dinner debate about GMV as the fundamental metric. Karthik reframes the topic, explaining why liquidity SLAs are a far more fundamental health indicator than top-line GMV.
Competitive Landscape and International Expansion Plans 3404 Harry asks about competition from Alibaba and presses Karthik when his initial answer stays high-level. Karthik clarifies how local SMB requirements insulate Kinnek from overseas trade directories.
Key Lessons and Strategies for Startup Fundraising 4311 Karthik outlines three core lessons for startup fundraising. Harry contributes informed VC ecosystem perspective by highlighting the common founder mistake of chasing vanity intros to famous investors.
Quick Fire Round: Insights, Books, and Vision 2412 In the quick fire round, Harry poses a curveball question asking for advice to marketplace investors. Karthik provides structured criteria on how investors should grill founders on marketplace dynamics.

Statements from this episode (6)

Insight
SMBs cannot use consumer platforms like Amazon for custom procurement
“Small businesses are kind of stuck in this awkward no man's land where they can't really go to Amazon or eBay or use consumer sites like that. Like say me and you could, because they're usually buying pretty custom things. They're buying custom equipment, they…”
Karthik Sridharan Oct 7, 2016 ▶ 4:36
Insight
Marketplace liquidity is a necessary precursor to GMV
“Do we have good liquidity? And that is a necessary But not sufficient precursor to GMV and a whole bunch of other engagement metrics for a marketplace. So that's kind of what I always look at as first principles rather than just focusing on GMV.”
Karthik Sridharan Oct 7, 2016 ▶ 11:33
Opinion
Alibaba is structurally relegated to acting as a glorified trade directory
“They're mostly focused on an East Asian supplier base, and mainly in mainland China. So most of Alibaba's buyer base is in Europe and America, and they're connecting with suppliers in East Asia. What that ends up meaning is that The currency issues, tariff iss…”
Karthik Sridharan Oct 7, 2016 ▶ 12:56
Insight
SMB procurement is inherently localized rather than global
“There aren't a lot of small businesses and medium-sized businesses that are dealing with factories and suppliers that are thousands of miles away, so the SMB market tends to be a lot more regionalized, nationalized, and kind of localized.”
Karthik Sridharan Oct 7, 2016 ▶ 14:46
Insight
Growth-stage VCs expect metric fluency two to three layers deep
“Especially as you go into later rounds, investors really expect you to have a solid understanding of your business, two, three layers deep with your metrics, not just what's GMV, but acceleration of GMV in certain product categories.”
Karthik Sridharan Oct 7, 2016 ▶ 17:41
Insight
Investors should pass on founders who cannot fluently explain marketplace dynamics
“Make sure that the founder can speak ad nauseum about marketplace dynamics. They don't, if they can't, then it's not worth it, because marketplaces are difficult enough as it is to execute. They have to be thinking about those issues from the very beginning.”
Karthik Sridharan Oct 7, 2016 ▶ 22:49
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