Mar 23, 2022 · 40m · 20vc
20VC: Startups Fail Because They Do Not Take Enough Risk, Why A/B Testing is Inefficient and Slows You Down, Why It is Impossible To Hire Good PMs so Stop Trying & 3 Key Signals The Best Engineers Present with Grant LaFontaine, Founder & CEO @ Whatnot
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
In this episode of The Twenty Minute VC, host Harry Stebbings interviews Grant LaFontaine, co-founder and CEO of Whatnot, who shares the key operating principles driving America's fastest-growing marketplace. LaFontaine details Whatnot's engineering-first culture, counter-conventional views on product management and A/B testing, capital allocation for big bets, and lessons in scaling leadership as a first-time founder.
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 28.8% of the talking time here. How this is scored →
Harry as informed peer 3.5 Guest teaching 3.8 Guest disagreement 2.5 Harry pushing back 2.6
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 34:14 Rejection of founder angel investing
Grant unequivocally rejects founder angel investing with an emphatic 'Don't do it. Never', dismissing common founder justifications as unaligned with optimizing company success.
Hardest push from Harry ▶ 27:30 Harry challenges GMV with alternate North Star metricHarry explicitly challenges Grant's focus on GMV by advancing his own thesis that repeat seller rate is a far better North Star metric and inviting Grant to 'shoot me down'.
Biggest teaching moment ▶ 27:50 Grant corrects Harry on leading vs lagging metricsGrant breaks down why Harry's suggested repeat seller metric is flawed, explaining that retention is a lagging indicator that masks underlying platform quality issues until buyers and sellers have already left.
Harry holds his own ▶ 34:52 Harry defends angel investing as a learning vehicleHarry pushes back on Grant's ban on founder angel investing by citing first-hand founder arguments that investing provides operational insights that can be brought back to benefit the core business.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| The Origins and Early Pivots of Whatnot | 2 | 3 | 2 | 1 | Harry introduces Grant and asks standard origin questions about early pivots and learnings from Facebook and Google. Grant gently reframes the notion of an 'aha moment', explaining that pivots produce high anxiety rather than sudden epiphanies. Grant also introduces Whatnot's radical 50-to-1 engineer-to-PM ratio. | |
| Why Early-Stage Startups Don't Need PMs | 2 | 4 | 2 | 2 | Grant explains why FAANG PMs struggle at early-stage startups due to over-reliance on strategy and data over user empathy. He outlines Amazon's framework for one-way versus two-way door decisions to justify executing uncomfortably fast. Harry prompts on speed vs quality trade-offs. | |
| Balancing User Feedback with Intuition and Taste | 3 | 3 | 1 | 1 | Harry asks a strong operational question regarding how Whatnot evaluates product taste when interviewing engineers. Grant details their practical product interview process, emphasizing user empathy and willingness to take ownership without process overhead. | |
| Inverting Risk Focus and Embracing Failure | 4 | 4 | 3 | 3 | Harry brings up a CEO thesis that the best CEOs are resource allocators to question Grant on how bets are selected. Grant pushes back on conventional FAANG risk-mitigation, arguing startups fail more often by not taking enough upside risk than by taking too much. | |
| Building and Maintaining Culture in a Remote Environment | 4 | 3 | 1 | 3 | Harry leverages backchannel feedback from Whatnot investors to ask about culture and probes Grant on the friction of letting underperforming hires go. Grant candidly admits early scaling mistakes where hires were made via referrals without explicit principle vetting. | |
| Learning Lessons from Outages and Prioritizing Quality | 3 | 4 | 3 | 2 | Grant recounts severe outage issues from moving too fast and rejects standard B2B/VC playbooks for consumer startups. He explains that metrics are a second-order phenomenon following deep user empathy and describes how their growth team operates without standard A/B testing. | |
| The Pitfalls of Over-Relying on A/B Testing | 3 | 5 | 4 | 2 | Harry questions Grant's stance against A/B testing given industry orthodoxy. Grant forcefully argues that A/B testing slows execution, lowers expected value compared to high-confidence shipping, and breeds risk-averse incrementalism. | |
| Choosing GMV and Core Health Metrics Over Single North Stars | 6 | 5 | 4 | 6 | Harry directly challenges Grant's choice of GMV by proposing percentage of repeat sellers as a superior North Star metric. Grant counters Harry's proposition by demonstrating that repeat seller retention is a lagging indicator that hides trust and quality issues until after churn occurs. | |
| Navigating Leadership Challenges as a First-Time Founder | 3 | 3 | 1 | 1 | Harry and Grant engage in a personal discussion about leadership weaknesses and first-time founder challenges. Grant openly shares his difficulty with hard performance conversations and how CEO coach Matt Mochary helped establish executive feedback frameworks. | |
| Managing Imposter Syndrome and Handling Startup Anxiety | 5 | 4 | 4 | 5 | In the quickfire section, Grant vehemently opposes founders doing angel investing. Harry pushes back with the counterargument that angel investments provide founders with cross-industry learnings, but Grant firmly rejects this justification as a slippery slope and distraction. |
Statements from this episode (34)
Startups Are a Long Process Without Singular Aha Moments
“I think, like, you know, many start-ups, It's a long process in there. I don't think there is an aha moment.”
Whatnot Pivoted From Craigslist Alternative to Collectibles in Two Weeks
“We were going to start a better full service Craigslist. Two weeks in, I was validating the business model, and I was like, we can't make money from this business. We have to change. And then we switched over to building a collectibles marketplace.”
Whatnot Operates With 50 Engineers and Only One Product Manager
“So today we have about 50 engineers in the team. We have one product manager.”
Whatnot Requires All Engineering Candidates to Pass a Product Interview
“All of our engineers actually go through a product interview so that they can make sound product decisions and judgments.”
Empowering Engineers to Drive Product Decisions Significantly Accelerates Execution
“When you have the people who are actually executing and building the thing, driving the decisions, they're way more empowered and you have fewer people in the equation so you can get things done way faster.”
Whatnot Plans to Maintain Unusually High Engineer-to-PM Ratios Long Term
“We'll probably always keep the ratios very high relative to standard companies because we want to optimize for speed.”
Big Tech Product Managers Focus Too Heavily on Strategy and Numbers
“In terms of hiring PMs, the biggest pool of PMs today are coming from like the fan companies, Facebook, Google, et cetera. And they tend to be Strategy and numbers focused.”
User Empathy Enables Fast, High-Quality Product Decisions Without Large Datasets
“If you are really grounded and empathetic to your users, you can make high quality decisions Without huge amounts of data, ultimately what that allows you to do is speed everything up. Add value to users exceptionally fast.”
Whatnot Runs Company-Wide Slack Dogfooding Before Releasing New Features
“We're really heavy dog food and culture. Once a feature is ready, We just spin up a slack dog fooding channel, and the whole company goes at it, and everyone sends the feedback, and the engineers stack rank it, and figure out what they want to fix, and what th…”
Whatnot Operates Without Product Managers, Jira, or Ticketing Systems
“Because we're in a world where we basically don't have PMs, there's so many decisions and bits of ownership that engineering is required to take control of. We don't have JIRA. No one writes tickets.”
Pre-emptively De-risking Projects Is Inefficient for Early-Stage Startups
“Most of the risks that you enumerate are never real, and so instead you kind of have to just push something out there and understand what the real risks are.”
Startups Should Not Reward Failure, But Ensure It Is Not Punished
“We actually don't explicitly reward failure, because I also don't think you want to reward failure. We make sure that failure is not punished, right?”
Taking Insufficient Risk Is a Primary Reason Scaling Startups Fail
“I actually believe one of the bigger failure points for startups, they do not take enough.”
Startups Should Cap Experimental Bets at 20 Percent of Total Resources
“No more than 20% of resource on new and exciting bets.”
Software Features Rarely Require Teams Larger Than Six People to Build
“Most things in software, you don't need more than six people to actually make happen.”
Whatnot's Live Shopping Feature Was Built by One Co-Founder in Six Weeks
“Live shopping on whatnot was built by my co-founder in six weeks by himself”
Whatnot Grew 100 Percent Month-Over-Month During Its Early Scaling Phase
“In terms of what we've messed up in culture, when we first started scaling the company, we had not like well articulated our culture. The thing was growing a hundred percent month over month.”
Team Performance Drastically Improved After Every Employee Firing at Whatnot
“But what I can say is after every one that we have done, the team's actually improved quite drastically.”
Whatnot's Mobile App Experienced System Outages Every Day in February 2022
“You know, I think in February of this year, our app went down every day, literally every single day.”
Building Consumer Products Requires Deep Empathy Rather Than Metric Formulas
“Building great consumer companies is not a mathematical equation. It's like when I go and look around, like all of the materials about how do I build product? How do I think about this? There's so much stuff on retention and cohorts and metrics and this and th…”
Clubhouse, OpenSea, and Whatnot Are the Only Notable Recent Consumer Startups
“I think in the past year, there's probably been like Three really interesting consumer companies. It's been Clubhouse, OpenSea, and us.”
OpenSea and Clubhouse Founders Both Originated From Pinterest
“Two out of three founders, OpenSea founder and Clubhouse founder all came from Pinterest, and a huge chunk of our team is actually now from Pinterest.”
Whatnot's Growth Team Ships Fast and Refuses to Run A/B Tests
“At most Fang companies. The growth team is heavily oriented towards A-B testing and metrics. Our growth team is just building things and doesn't test anything and ships it fast.”
A/B Testing Slows Product Execution and Encourages Incremental Thinking
“I think it just slows you down, encourages incremental thinking.”
Whatnot Rolled Out a Major Browse Feature Update Without A/B Testing
“We just, we rolled it out two days ago. We didn't maybe test. It was a huge, huge change.”
Gross Merchandise Value Is Whatnot's Primary Tracked Business Metric
“The metric that we look at the most is GMV.”
User Retention Is a Lagging Indicator That Misses Emerging Platform Issues
“One of the problems with that is it's probably just like a lagging indicator of the value of the platform. People will leave once there are problems and you want to like isolate the problems earlier on.”
Whatnot Allocates Significantly More Resources to the Supply Side of Its Marketplace
“Our business is very, very seller oriented. And so we do spend a lot more of our time on the supply side.”
Organizational People Conflicts Cannot Be Solved Using First Principles
“Like all the people problems that you run into, they're not like the business problems where you can work back from first principles. People are really like complicated. When you start to run those conflicts and getting like organizations to work well together…”
Openly Roasting the CEO Builds High-Trust Executive Leadership Teams
“He'll kick it off with me where it'd be like, all right, you can go and roast Grant on all of the bad things he's doing. Give him like the toughest feedback you can give him. I'll sit there and listen to it. And most of the time it's accurate. And so I'll ackn…”
Grant LaFontaine Claims Whatnot Is the Fastest-Growing Marketplace in Tech History
“We're the fastest growing marketplace ever.”
Startup Founders Should Never Engage in Angel Investing
“Don't do it. Never. I think there are founders I know who do it, and some of them have, like, reasonably good logical reasons for why they do it. I think if you're a founder, it's incredibly important that you fully optimize the success of your company.”