The Exchanges

Q Now, some of those expansionary products that you mentioned there from financing to insurance to trade-ins will be more impactful than others. What was the most impactful from a margin transformation perspective?

A Financing is a huge one. And so in the automotive retail, about 90% of transactions are financed. Um, and, um, because the industry is so fragmented, it's basically just outsourced to lenders. And so dealerships generally get, uh, basically a lead gen fee about one and a half percent of the amount financed, um, of the car, but the lender is making closer to 10%, um, of the amount financed, right? Because these are multi-year loans and they're collecting interest throughout and net of all their expenses, et cetera. So on a 25,000 dollar car, That's about 2000 dollars of profit per car in spread. And so we built at Carvana, um, we've built ourselves as a full spectrum lender. We do our own proprietary credit scoring, loan structuring, decisioning, underwriting.

AI assessment note: “Financing is a huge one. And so in the automotive retail”

Q To what extent do you listen to team members on product reviews? And what I mean by that is, I think we should do this. That's great, Dan. Back in your box.

A We love the ideation coming from everywhere. Um, you know, we have a number of product managers in our organization that were customer advocates. They were on the phones listening to customers and dealing with customers all day, every day. We have ones that were loan underwriters. We have ones that did home delivery of vehicles. And they know how the experience actually works and where the tooling has been falling down and, and where the frictions are and how to make those gains. And so we love that coming up from the bottom, but we have a very high bar for rigor. You better have a hypothesis for, you know, why this is going to matter. And a good framework for that is, you know, the magnitude of impact times the frequency of occurrence. You can say that something is a horrendous experience, but if it happens One in every 50,000 deliveries. That's not a very good thing to bring to the table. Um, even something with medium pain that happens one in every 50 deliveries is much more important for us to, to pay attention to. And you can distill that into a unit economic impact. You can say, what is this doing to our cost per unit? Or what is this doing to our profit per unit? And we ask everyone to collapse their ideas into that unit economic framework so that they can be compared apples to apples.

AI assessment note: “we love that coming up from the bottom, but we have a very high bar”

Q You mentioned the multiple different products there. I'm really interested to hear about how you think about a review, so to speak, of what you've done. What did you do that you wish you hadn't done with the benefit of hindsight?

A I would say my biggest regret is more of a team structuring regret than, uh, a specific product decision. So for, for the first many years at Carvana, I said that my job was to build a machine that can parallel process the needs of the business. And there is a lot of truth in that. You need to build capabilities as primitives that can be snapped together. And for a vertically integrated business like ours, we do need to do many things at once, but I took it too far. At one point we had 90 very small teams working in parallel. Um, but that also means 90 different prioritization cues. And ultimately there are not 90 number one priorities that the fifth priority of a certain team might actually dominate the number one priority of many other teams, but they're not going to get to it because it's fifth on their queue. And so what we did in 2022 is we went from 90 back to eight, uh, and we forced so much more Cross-functional prioritization. And we asked resources to be more flexible between teams and to have a willingness to jump into different projects and reprioritize more dynamically. And this ended up being so huge in putting more effort and speed behind the most important priorities in the business.

AI assessment note: “I would say my biggest regret is more of a team structuring regret”

Q Okay, so it has to go back to the core offering and it has to drive value there. What product decision did you make that was the biggest mistake in Carvana's time?

A It's a fun one. It's somewhat counterintuitive. Um, one thing that we did early, uh, is we wanted to offer free shipping for everyone. And, you know, so we're an e-commerce business, and we want to give you a broad selection, and our cars are in these, like, hundred acre facilities around the United States, like five, 6000 cars on the ground. We have a nationwide logistics network that we own and operate, and we wanted every car in the network to be free for every customer in the network, because the truism of e-commerce is that you must have free shipping. Um, and consumers love free shipping. So you think, okay, that seems reasonable. But in our case, the costs are very high. We can't rely on FedEx or UPS or USPS to just deliver a car to you. We have to do it ourselves.

AI assessment note: “one thing that we did early, uh, is we wanted to offer free shipping”

Q Final one as a CPO analyzing other companies around you, which other companies product strategy have you been most impressed by?

A This is a popular one, I suppose, but I love the go to market of space X first order. If you're going to drop the cost of getting to space by an order of magnitude, I have nothing but respect for the operational discipline required to do that. But simultaneously, you're going to then use that advantage to build out star link, which is likely to be an insane cash cow of a business that will allow you to continue to invest. And it's, it's brilliant. And, and it's really to be admired because it takes. Such incredible vision and discipline and execution to do it. And, and that's what I love the most is, is disciplined, uh, you know, execution operators.

AI assessment note: “I love the go to market of space X first order.”

Q To what extent do you listen to team members on product reviews? And what I mean by that is, I think we should do this. That's great, Dan. Back in your box.

A We love the ideation coming from everywhere. Um, you know, we have a number of product managers in our organization that were customer advocates. They were on the phones listening to customers and dealing with customers all day, every day. We have ones that were loan underwriters. We have ones that did home delivery of vehicles. And they know how the experience actually works and where the tooling has been falling down and, and where the frictions are and how to make those gains. And so we love that coming up from the bottom, but we have a very high bar for rigor. You better have a hypothesis for, you know, why this is going to matter. And a good framework for that is, you know, the magnitude of impact times the frequency of occurrence. You can say that something is a horrendous experience, but if it happens One in every 50,000 deliveries. That's not a very good thing to bring to the table. Um, even something with medium pain that happens one in every 50 deliveries is much more important for us to, to pay attention to. And you can distill that into a unit economic impact. You can say, what is this doing to our cost per unit? Or what is this doing to our profit per unit? And we ask everyone to collapse their ideas into that unit economic framework so that they can be compared apples to apples.

AI assessment note: “we love that coming up from the bottom, but we have a very high bar”

Q What's the most recent wow moment you've had with a consumer product, and why that one?

A I have to give you two. One isn't crazy recent, but it's fun, was the first time that my wife tried Google Maps inside of virtual reality. Um, and she was like, tromping around our living room like Godzilla, and like looking in our apartment window, and And just like experiencing this immersive experience. And I'm a, I'm still a big believer in, in what's going on in the metaverse. And, and, uh, I'm very excited by where that all can go. I think a second one is just literally two days ago, I got a Rivian and I'm obsessed with it. Um, there's just so much craft in every detail of that car. Like the headrests have like a plaid inlay in the middle of them. And when you're, Setting the, the flow of the direction of the air vents. It's this beautiful animation, and you can save it as your default so that when I get in the car, the air vents point in a specific direction, and my wife gets in the car, they point in a different direction, and there's just a lot of craft in that car, and, uh, and I love it. It's beautiful.

AI assessment note: “two days ago, I got a Rivian and I'm obsessed with it.”

Q Okay, so it has to go back to the core offering and it has to drive value there. What product decision did you make that was the biggest mistake in Carvana's time?

A It's a fun one. It's somewhat counterintuitive. Um, one thing that we did early, uh, is we wanted to offer free shipping for everyone. And, you know, so we're an e-commerce business, and we want to give you a broad selection, and our cars are in these, like, hundred acre facilities around the United States, like five, 6000 cars on the ground. We have a nationwide logistics network that we own and operate, and we wanted every car in the network to be free for every customer in the network, because the truism of e-commerce is that you must have free shipping. Um, and consumers love free shipping. So you think, okay, that seems reasonable. But in our case, the costs are very high. We can't rely on FedEx or UPS or USPS to just deliver a car to you. We have to do it ourselves.

AI assessment note: “one thing that we did early, uh, is we wanted to offer free shipping for everyone.”

Q Final one as a CPO analyzing other companies around you, which other companies product strategy have you been most impressed by?

A This is a popular one, I suppose, but I love the go to market of space X first order. If you're going to drop the cost of getting to space by an order of magnitude, I have nothing but respect for the operational discipline required to do that. But simultaneously, you're going to then use that advantage to build out star link, which is likely to be an insane cash cow of a business that will allow you to continue to invest. And it's, it's brilliant. And, and it's really to be admired because it takes. Such incredible vision and discipline and execution to do it. And, and that's what I love the most is, is disciplined, uh, you know, execution operators.

AI assessment note: “I love the go to market of space X first order.”

Q Can you help me understand how does the margin improvement in Carvana happen? Is it you get discounts on bulk buys of Is it you get better at transformation margin? Can you help me understand how that margin profile changes from, bluntly, really challenging to really good?

A Yeah, absolutely. Um, a lot of it is about vertical integration. So when I get to explain Carvana to new employees or to investors, I use one super zoomed out slide to start with and say, look, we sell a commodity product. Um, and if you can sell A commodity product and capture more profit than anyone else can. And I don't mean raise prices. Uh, I mean, capture more of the profit pools surrounding the transaction. Um, in, in an automotive that is financing, that's insurance, that's accepting trade-ins and being able to monetize those effectively. There are a lot of hands in the cookie jar, um, of any given automotive transaction. Um, so if you can grab more of the profit pools associated with that transaction, And you can spend less on a variable, uh, expense basis. Um, and so, you know, at a dealership, that's the, the sales guy, the sales manager, the finance person, the finance manager, all of those sorts of things. If you can drive those variable expenses down, um, that also means all the third parties associated with the transaction. Um, you know, you're, you're inheriting their cost structures. You're inheriting their profit margins anytime you're using third parties. So if you can do More of the work yourself as a first party and drive those expenses down. Now that transaction is worth more to you than it is to anyone else. You're generating more of the profit pools, you…

AI assessment note: “a lot of it is about vertical integration. So when I get to explain”

Q And where does the best experience hurt margin most?

A Yeah. Um, well, it's certainly subscale trying to move cars across the country. There is so much under utilization of assets. These are big nine car haulers going down the freeway. And if they've got three cars on them, it's not a very good use of expenses, but you have to be willing to move those trucks and get cars to customers. Because if you say I'm going to wait until the nine car hauler is full, then I can only tell you, I will get you your car somewhere between three and 11 days from now, which is not a good customer offering. And it's going to take a long time, which is low converting. And so you have to be sort of willing to absorb some of that under utilization for a period of time. But then once you get to the point where you're actually sort of fulfillment constrained instead of demand constrained, There's so much incredible optimization work to be done where we get, we've done so much software building around intelligent labor utilization and, and logistics network and fulfillment utilization to make the unit economics really, really sing. Um, and that takes, takes time.

AI assessment note: “under utilization of assets. These are big nine car haulers going down the freeway”

Q I, I, I really agree with you in terms of the importance of writing. What do you think are the most non-obvious other skills that product people or the best product people have? You mentioned their writing. We mentioned business mindedness. Any others where you're like, when I look at my team, the best have this less obvious skill?

A I think high accountability is the number one thing you have to look for where people take it personally when things aren't succeeding. Um, and it's just that willingness to go the extra mile to go and watch the customer session replays and to take notes and to do the product teardowns of competitive products and compare and contrast, uh, to sit and read every word of copy on the page out loud, uh, and, and, you know, feel embarrassed when it's not intuitive. Um, and it's that taking it personally that you want to get it right. Is the number one thing that we look for, uh, is just that willingness to, to want to go the extra mile and to want to sweat the details.

AI assessment note: “I think high accountability is the number one thing you have to look for”

Q Can I ask you, how do you think about the challenge of whether to get them to work on Carvana, where you have a huge amount of knowledge, asymmetric information, and you'll probably just think that everything's not great because it's not at the level that you are having spent years there, versus a neutral product where you start on a level playing field?

A It is an asymmetric advantage, but we always have them do Carvana problems and we'll try and make it something that is relevant to us. So we'll stand up, uh, you know, a dummy SQL database and say, query this and, and tell us what you would do in this strategy to increase attach of warranty products on a sale or, you know, and what's that going to do to the unit economics of the transaction. Um, and we'll give them a bunch of historical data and, and it'll be non-intuitive. So that, um, you have to sort of ferret out those non-intuitive, uh, uh, realities that are buried inside of the data and then come to a conclusion on what you would change in the interface to make it better. And you're right that it's, um, an asymmetric advantage that we understand it quite well, but you get to see level of effort and critical thought and, and, you know, the versatility there. And so we aren't hesitant. We also don't hire, um, Super, super senior people. We like to grow our talent from within, and so I would not have the issue of, boy, this person's such a big deal, I can't possibly ask them to do homework. Um, that's less of a problem.

AI assessment note: “It is an asymmetric advantage, but we always have them do Carvana problems”

Q What's the most recent wow moment you've had with a consumer product, and why that one?

A I have to give you two. One isn't crazy recent, but it's fun, was the first time that my wife tried Google Maps inside of virtual reality. Um, and she was like, tromping around our living room like Godzilla, and like looking in our apartment window, and And just like experiencing this immersive experience. And I'm a, I'm still a big believer in, in what's going on in the metaverse. And, and, uh, I'm very excited by where that all can go. I think a second one is just literally two days ago, I got a Rivian and I'm obsessed with it. Um, there's just so much craft in every detail of that car. Like the headrests have like a plaid inlay in the middle of them. And when you're, Setting the, the flow of the direction of the air vents. It's this beautiful animation, and you can save it as your default so that when I get in the car, the air vents point in a specific direction, and my wife gets in the car, they point in a different direction, and there's just a lot of craft in that car, and, uh, and I love it. It's beautiful.

AI assessment note: “literally two days ago, I got a Rivian and I'm obsessed with it.”

Q Can you help me understand how does the margin improvement in Carvana happen? Is it you get discounts on bulk buys of Is it you get better at transformation margin? Can you help me understand how that margin profile changes from, bluntly, really challenging to really good?

A Yeah, absolutely. Um, a lot of it is about vertical integration. So when I get to explain Carvana to new employees or to investors, I use one super zoomed out slide to start with and say, look, we sell a commodity product. Um, and if you can sell A commodity product and capture more profit than anyone else can. And I don't mean raise prices. Uh, I mean, capture more of the profit pools surrounding the transaction. Um, in, in an automotive that is financing, that's insurance, that's accepting trade-ins and being able to monetize those effectively. There are a lot of hands in the cookie jar, um, of any given automotive transaction. Um, so if you can grab more of the profit pools associated with that transaction, And you can spend less on a variable, uh, expense basis. Um, and so, you know, at a dealership, that's the, the sales guy, the sales manager, the finance person, the finance manager, all of those sorts of things. If you can drive those variable expenses down, um, that also means all the third parties associated with the transaction. Um, you know, you're, you're inheriting their cost structures. You're inheriting their profit margins anytime you're using third parties. So if you can do More of the work yourself as a first party and drive those expenses down. Now that transaction is worth more to you than it is to anyone else. You're generating more of the profit pools, you…

AI assessment note: “a lot of it is about vertical integration... capture more of the profit pools”

Q Is everyone, is everyone not customer led? I mean, like ultimately.

A I certainly hope so, but there is, I think the, the, this notion of being engineering led can sometimes be trying to romanticize and, and give too much control, um, or a perception of control of it's really all about the technology, the, you know, if you build it, they will come. And I think that that is not singularly true. I think you need to have a go to market muscle and you need to have tight feedback loops and analytical rigor and obsession. And There are emotional aspects to using any product that really matter and psychographics and, and all of these things. Um, and so I think you do have to actually be, you know, customer obsessed, and I don't think that, that every organization evangelizes it in the same way.

AI assessment note: “I don't think that, that every organization evangelizes it in the same way.”

Q Um, why is being in Arizona helped you over being in Silicon Valley?

A Because, um, you have to opt into the mission. You know, we kept a very high standard around these things like grit and accountability and problem solving and bias to action and those things. Um, and so once we sort of found the right people, um, they were fully bought in because if you, you know, have those characteristics, You can be employed elsewhere. You could choose to go many different places, but you're in Phoenix, and you have chosen to be with Carvana, and, and, you know, we've really built, um, a very long tenured group. 90% of our senior leadership has been with Carvana since before 2019, so well before the drop. Um, our executive team's been together for 10 years, and, you know, we've built a real cohesion.

AI assessment note: “you're in Phoenix, and you have chosen to be with Carvana”

Q And so to what extent do you think different is better in product? I always oscillate between like customers like what they know, just give them what they know, um, versus actually sometimes a new product paradigm is amazing and differentiated and leads to word of mouth. How do you think about that?

A I think generally speaking, don't make me think. As a consumer, you need to feel comfortable, especially in something that's not habit forming, right? Um, like people learn to use Snap over time, and I found Snap to be utterly unintuitive at the beginning, but it was habit forming, and they did teach people a new paradigm that was ultimately different. If I'm trying to find something on an e-commerce site, being able to search and filter and see results and click through, You don't need to fully reinvent that paradigm. Um, but for example, on how we want to, you're not going to get to test drive the vehicle, right? You're not at a lot going and sitting in every single vehicle. We need to bring you as close as humanly possible to every single detail. We want to show you if there are cosmetic things that we chose not to fix, and we're going to take a high resolution video and let you look at it so that we set really, really accurate expectations. And that was completely different from anything that had ever been done in automotive retail because we had to solve a very specific consumer problem.

AI assessment note: “don't make me think. As a consumer, you need to feel comfortable”

Q Everyone says that being a PM is like being CEO of the product. Do you like that analogy?

A I don't. I think that being the PM, you need to be obsessed with every aspect of the experience, and I think that you need to really intimately understand the system. Um, and what I mean by that is that any good experience has so many inputs and so many outputs, And you really should have a fingertip sense of the relationship between all of those inputs and outputs, where if you're going to make an improvement to one part of the funnel, you should have an intuitive understanding of what you think will happen as a result of that. And you should know how to prioritize as a result of that. But the CEO and saying, I own a P and L is so much less important, really, um, of saying, what is my total payroll? And, you know, what are the payroll taxes associated with that and the total expenses? There's a lot of things that you need to do as a CEO that I certainly don't want product leaders to have to think too much about. Um, I think they need to be obsessed with the customer experience and with the metrics that they're moving.

AI assessment note: “I don't. I think that being the PM, you need to be obsessed”

Q How do you feel about the right background going into product? Do you like consulting? Do you not? What's optimal?

A We've had great success with a small number of consultants that have joined, but you've got to look for that very specific type. It is the person who comes from consulting and says, I hate it. We do all the research and we make these recommendations and then we hand it off to someone else To either do it or not do it. And I hate it. If you get the type of consultant who says, I know everything and now I should make all the decisions. Absolutely not. Um, it's, you need the people who have been put through that meat grinder. Consulting can be very hard work, um, have very high expectations of output. Um, but you need the people who hate it because they don't get their hands on the finished product and they don't, don't get to see it all the way through. Uh, and we've had incredible success, um, with, with that archetype, but not the type that thinks like, now that I've seen the way that a dozen companies operate, I'll tell you how to operate yours because operating is hands-on business.

AI assessment note: “We've had great success with a small number of consultants that have joined”

Q The combination of getting business and unit econ and product is what makes the best. Do you agree? Or is that a stilted view of what a great CPO is?

A I completely agree. I think that You have to be unapologetic about the fact that you're building a business. And, um, you know, we say we do not win by shipping features. We win by moving metrics. Um, and ultimately, while there are so many input metrics and you should have a very clearly defined unit economics driven hypothesis for why we're taking on any given initiative, and you should have leading indicators that you're measuring from minute zero of launching a new initiative and looking for evidence It's that your hypothesis is valid or invalid. Ultimately, if it doesn't drop to the bottom line, you have not contributed anything. Uh, it has to ultimately show up inside of the business. And we are unapologetic about that. It is everyone's responsibility to care about that. That's product engineering, analytics, design operations. It is everyone's responsibility to care about the initiatives that we've taken on and what we're prioritizing And seeing that all the way through to economic impact for the business. Um, and so yes, I think it's, it's absolutely the case that, that everyone should be rigorous there.

AI assessment note: “I completely agree. I think that You have to be unapologetic”

Q What other function has the most tension with product?

A We've really fought this hard. Carvana is such an operationally intensive business, but we have to be hand in glove between technology and operations. And I think sometimes operations has a reputation for wanting a bandaid for a pain that exists today. And sometimes product thinks they're smart and knows more, um, and, and don't worry, we'll handle it. But you really actually need product to live in the weeds with operations and intimately understand the challenges and the experiences and the frictions and the deficiencies. And so you want those folks to be so close together and embedded. Um, and, uh, so I think, you know, product and operations can sometimes be intention, but we work really hard to try and slam them together and make them best friends.

AI assessment note: “product and operations can sometimes be in tension”

Q How do you feel about the right background going into product? Do you like consulting? Do you not? What's optimal?

A We've had great success with a small number of consultants that have joined, but you've got to look for that very specific type. It is the person who comes from consulting and says, I hate it. We do all the research and we make these recommendations and then we hand it off to someone else To either do it or not do it. And I hate it. If you get the type of consultant who says, I know everything and now I should make all the decisions. Absolutely not. Um, it's, you need the people who have been put through that meat grinder. Consulting can be very hard work, um, have very high expectations of output. Um, but you need the people who hate it because they don't get their hands on the finished product and they don't, don't get to see it all the way through. Uh, and we've had incredible success, um, with, with that archetype, but not the type that thinks like, now that I've seen the way that a dozen companies operate, I'll tell you how to operate yours because operating is hands-on business.

AI assessment note: “We've had great success with a small number of consultants that have joined”

Q Um, why is being in Arizona helped you over being in Silicon Valley?

A Because, um, you have to opt into the mission. You know, we kept a very high standard around these things like grit and accountability and problem solving and bias to action and those things. Um, and so once we sort of found the right people, um, they were fully bought in because if you, you know, have those characteristics, You can be employed elsewhere. You could choose to go many different places, but you're in Phoenix, and you have chosen to be with Carvana, and, and, you know, we've really built, um, a very long tenured group. 90% of our senior leadership has been with Carvana since before 2019, so well before the drop. Um, our executive team's been together for 10 years, and, you know, we've built a real cohesion.

AI assessment note: “you're in Phoenix, and you have chosen to be with Carvana”

Q How important is it to have people in product who've delivered products to that customer segment before? Say if you're doing consumer social, they've done consumer social before versus B to B. How important is that past domain expertise in product?

A I would say it can be valuable, but it is not what we index on. Um, you know, when I'm hiring, um, I, I use two attributes and I've sort of tried to pass this through the organization. The two I look for are horsepower and give a shit. And that's what we look for in the hiring process because you can, the, the fun thing about Carvana is there's basically not a single person at Carvana that's done their job before. Um, certainly not at the scale that we do it at. And, um, we've taught people about the automotive industry and, and put fresh eyes on a lot of assumptions about the automotive industry that are really long held. And so being able to question that.

AI assessment note: “I would say it can be valuable, but it is not what we index on.”

Q Was that harder work than being CPO of Carvana?

A It was quite different. It is harder. I think the CEO seat is the, is the loneliest seat there is. Um, you know, there's the, the adage that, that, Shit rolls downhill. And, and I think most CEOs know that the most toxic stuff rolls all the way to the top and, and sort of by definition, it means that all these incredibly capable people that you trust to do so many things for your business and that they are really exceptional and you've chosen to work with them have decided they can't make the decision and they need you to do it. And so the CEO seat is the worst of the worst. And, and I, I didn't have A single moment for seven years where I didn't feel the crushing pressure of, you know, making sure that all these people who had chosen to work at my startup, um, we're going to stay employed and have a great outcome and we were all going to win together and it's a, it's a crushing experience. Um, I think we have a lot of, of former founders on the Carvana leadership team and throughout the business. And so we bring a lot of that founder mindset and accountability, but it's different.

AI assessment note: “It was quite different. It is harder. I think the CEO seat is the”

Q The combination of getting business and unit econ and product is what makes the best. Do you agree? Or is that a stilted view of what a great CPO is?

A I completely agree. I think that You have to be unapologetic about the fact that you're building a business. And, um, you know, we say we do not win by shipping features. We win by moving metrics. Um, and ultimately, while there are so many input metrics and you should have a very clearly defined unit economics driven hypothesis for why we're taking on any given initiative, and you should have leading indicators that you're measuring from minute zero of launching a new initiative and looking for evidence It's that your hypothesis is valid or invalid. Ultimately, if it doesn't drop to the bottom line, you have not contributed anything. Uh, it has to ultimately show up inside of the business. And we are unapologetic about that. It is everyone's responsibility to care about that. That's product engineering, analytics, design operations. It is everyone's responsibility to care about the initiatives that we've taken on and what we're prioritizing And seeing that all the way through to economic impact for the business. Um, and so yes, I think it's, it's absolutely the case that, that everyone should be rigorous there.

AI assessment note: “I completely agree. I think that You have to be unapologetic about the fact”

Q in London. They are everywhere. Now I'm a believer in Adam Smith's invisible hand, minimal market intervention. And then I saw the other day how the unit economics of these Chinese cars are being subsidized so heavily. It is not a fair game when the Chinese government pays for 30, 40% of the cost. To what extent is Chinese cars a net negative for your business, and do you worry?

A On one hand, for any new brand to want to enter the United States, think about what it takes to get cars in the hands of customers. How much capital and how much time to get land and get zoned and get staffed and, and start to fulfill, um, and get those cars in the hands of consumers, versus today, Carvana first party logistics touches 90% of US driveways. So if you can get any car to either coast of the United States, we will get it to 90% of Americans within a week. Uh, so I actually think our infrastructure is unbelievably well set up to facilitate, um, you know, OEMs and brands to get cars into the United States and to distribute them.

AI assessment note: “I actually think our infrastructure is unbelievably well set up to facilitate”

Q What other function has the most tension with product?

A We've really fought this hard. Carvana is such an operationally intensive business, but we have to be hand in glove between technology and operations. And I think sometimes operations has a reputation for wanting a bandaid for a pain that exists today. And sometimes product thinks they're smart and knows more, um, and, and don't worry, we'll handle it. But you really actually need product to live in the weeds with operations and intimately understand the challenges and the experiences and the frictions and the deficiencies. And so you want those folks to be so close together and embedded. Um, and, uh, so I think, you know, product and operations can sometimes be intention, but we work really hard to try and slam them together and make them best friends.

AI assessment note: “product and operations can sometimes be intention”

Q Your money's just gone up in flames if you invest in me as a startup founder. Um, uh, my question to you is, okay, that one thing How do I know which one to choose? What is the advice on the right North star metric and how to know you've got it right?

A Because you can walk down a path of many one things. Um, you certainly choosing the one thing isn't that there is only one thing. It's about putting them in order. And so what I like to ask founders when I'm working with them or investing in, in startups is how is it that your moat gets wider and deeper as you build? And I want to hear how you're sequencing those choices and saying, Once we've got, you know, the incremental gross profit of, uh, being able to originate these loans, right? And we're making far more gross profit than anybody else. We're going to plow that back into market expansion. And as we do that, we'll have a broader selection to choose from, and that's going to increase conversion of people who are coming to the site. And also as we then increase conversion, we can hold more inventory. That's going to get the inventory closer to the customer, which drives delivery times down. And that's going to increase conversion even further. So I can add more inventory, right? And these things build on one another. It is a flywheel. Uh, thank you, Jeff Bezos. Um, and, uh, you know, I wanna hear how you're gonna sequence many one things. I just don't want to hear that you're doing them all at once.

AI assessment note: “It's about putting them in order... how is it that your moat gets wider”