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Dec 26, 2017 · 16m · top-founders

885 Auction Marketplace will Sell $500m This Year, Takes 25% As Revenue

Andrew Blachman · 9m spoken Nathan Latka · 5m spoken
0:00 / 0:00

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

Tophatter CEO Andrew Blachman joins host Nathan Latka on The Top Entrepreneurs Podcast to explain how his mobile discovery marketplace generates $300M to $400M in annual GMV through fast-paced live auctions. Blachman details the platform's 25% take-rate business model, rapid 30-to-60-day customer acquisition payback cycles, and disciplined capital strategy.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 38.6% of the talking time here. How this is scored →

Nathan as informed peer 5.6 Guest teaching 3.2 Guest disagreement 1.8 Nathan pushing back 3.6
05100:0010:001:12–4:13 · Nathan as informed peer 5/10 Introducing Andrew Blachman and Tophatter Business Model Nathan explores the live mechanics of the marketplace, browsing the app during the interview and running quick math on the daily transaction volume based on Andrew's average price points.4:13–6:38 · Nathan as informed peer 6/10 Marketplace Supply Chain Logistics and Annual Revenue Breakdown Nathan digs into marketplace unit economics, clarifying whether revenue is net take-rate or gross merchandise volume, and Andrew details their 80% gross margin on 25% take rates.6:38–8:51 · Nathan as informed peer 5/10 Marketing Acquisition Channels and Fast Payback Periods Nathan tries to press Andrew into revealing specific monthly marketing figures, but Andrew politely declines while explaining their 30-to-60 day marketing payback model.8:53–14:22 · Nathan as informed peer 7/10 Focus on Physical Goods and Historical Funding Trajectory Nathan intensely challenges Andrew on why the company keeps cash in the bank rather than raising capital or spending more aggressively if marketing payback is truly 30 to 60 days. Andrew firmly counters by explaining marketing acquisition saturation, incremental scaling, and diminishing marginal returns.14:22–16:44 · Nathan as informed peer 5/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire questions, and Andrew cooperatively shares personal background and business reflections before Nathan summarizes the core metrics.1:12–4:13 · Guest teaching 3/10 Introducing Andrew Blachman and Tophatter Business Model Nathan explores the live mechanics of the marketplace, browsing the app during the interview and running quick math on the daily transaction volume based on Andrew's average price points.4:13–6:38 · Guest teaching 3/10 Marketplace Supply Chain Logistics and Annual Revenue Breakdown Nathan digs into marketplace unit economics, clarifying whether revenue is net take-rate or gross merchandise volume, and Andrew details their 80% gross margin on 25% take rates.6:38–8:51 · Guest teaching 2/10 Marketing Acquisition Channels and Fast Payback Periods Nathan tries to press Andrew into revealing specific monthly marketing figures, but Andrew politely declines while explaining their 30-to-60 day marketing payback model.8:53–14:22 · Guest teaching 7/10 Focus on Physical Goods and Historical Funding Trajectory Nathan intensely challenges Andrew on why the company keeps cash in the bank rather than raising capital or spending more aggressively if marketing payback is truly 30 to 60 days. Andrew firmly counters by explaining marketing acquisition saturation, incremental scaling, and diminishing marginal returns.14:22–16:44 · Guest teaching 1/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire questions, and Andrew cooperatively shares personal background and business reflections before Nathan summarizes the core metrics.1:12–4:13 · Guest disagreement 1/10 Introducing Andrew Blachman and Tophatter Business Model Nathan explores the live mechanics of the marketplace, browsing the app during the interview and running quick math on the daily transaction volume based on Andrew's average price points.4:13–6:38 · Guest disagreement 1/10 Marketplace Supply Chain Logistics and Annual Revenue Breakdown Nathan digs into marketplace unit economics, clarifying whether revenue is net take-rate or gross merchandise volume, and Andrew details their 80% gross margin on 25% take rates.6:38–8:51 · Guest disagreement 2/10 Marketing Acquisition Channels and Fast Payback Periods Nathan tries to press Andrew into revealing specific monthly marketing figures, but Andrew politely declines while explaining their 30-to-60 day marketing payback model.8:53–14:22 · Guest disagreement 5/10 Focus on Physical Goods and Historical Funding Trajectory Nathan intensely challenges Andrew on why the company keeps cash in the bank rather than raising capital or spending more aggressively if marketing payback is truly 30 to 60 days. Andrew firmly counters by explaining marketing acquisition saturation, incremental scaling, and diminishing marginal returns.14:22–16:44 · Guest disagreement 0/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire questions, and Andrew cooperatively shares personal background and business reflections before Nathan summarizes the core metrics.1:12–4:13 · Nathan pushing back 2/10 Introducing Andrew Blachman and Tophatter Business Model Nathan explores the live mechanics of the marketplace, browsing the app during the interview and running quick math on the daily transaction volume based on Andrew's average price points.4:13–6:38 · Nathan pushing back 3/10 Marketplace Supply Chain Logistics and Annual Revenue Breakdown Nathan digs into marketplace unit economics, clarifying whether revenue is net take-rate or gross merchandise volume, and Andrew details their 80% gross margin on 25% take rates.6:38–8:51 · Nathan pushing back 4/10 Marketing Acquisition Channels and Fast Payback Periods Nathan tries to press Andrew into revealing specific monthly marketing figures, but Andrew politely declines while explaining their 30-to-60 day marketing payback model.8:53–14:22 · Nathan pushing back 8/10 Focus on Physical Goods and Historical Funding Trajectory Nathan intensely challenges Andrew on why the company keeps cash in the bank rather than raising capital or spending more aggressively if marketing payback is truly 30 to 60 days. Andrew firmly counters by explaining marketing acquisition saturation, incremental scaling, and diminishing marginal returns.14:22–16:44 · Nathan pushing back 1/10 The Famous Five Rapid-Fire Questions Nathan conducts the standard Famous Five rapid-fire questions, and Andrew cooperatively shares personal background and business reflections before Nathan summarizes the core metrics.

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

0:00 · Nathan 65.6% · guest 34.4%0:00 · Nathan 65.6% · guest 34.4%3:00 · Nathan 31.8% · guest 68.2%3:00 · Nathan 31.8% · guest 68.2%6:00 · Nathan 38% · guest 62%6:00 · Nathan 38% · guest 62%9:00 · Nathan 23.5% · guest 76.5%9:00 · Nathan 23.5% · guest 76.5%12:00 · Nathan 30% · guest 70%12:00 · Nathan 30% · guest 70%15:00 · Nathan 45.5% · guest 54.5%15:00 · Nathan 45.5% · guest 54.5%
Sharpest disagreement ▶ 13:34 Guest defends controlled marketing growth as common sense

Andrew firmly pushes back on Nathan's premise that they should instantly 10x marketing spend, noting that acquisition costs rise non-linearly and dismissing reckless spending as economically unfeasible.

 Hardest push from Nathan ▶ 12:43 Host challenges guest on holding cash instead of spending

Nathan bluntly confronts Andrew, asserting that holding large cash reserves contradicts Andrew's claim of having complete confidence in rapid marketing payback economics.

 Biggest teaching moment ▶ 13:34 Guest breaks down acquisition cost curves and incremental scaling

Andrew educates Nathan on why venture-backed e-commerce companies fail when trying to scale spend all at once, explaining how customer acquisition costs degrade without disciplined, incremental expansion.

 Nathan holds their own ▶ 12:06 Host challenges binary IPO narrative for mid-stage tech

Nathan counters Andrew's claim about exit bottlenecks by arguing Tophatter's modest $35M funding history leaves plenty of strategic M&A acquirers on the table without forcing an IPO.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Introducing Andrew Blachman and Tophatter Business Model 5312 Nathan explores the live mechanics of the marketplace, browsing the app during the interview and running quick math on the daily transaction volume based on Andrew's average price points.
Marketplace Supply Chain Logistics and Annual Revenue Breakdown 6313 Nathan digs into marketplace unit economics, clarifying whether revenue is net take-rate or gross merchandise volume, and Andrew details their 80% gross margin on 25% take rates.
Marketing Acquisition Channels and Fast Payback Periods 5224 Nathan tries to press Andrew into revealing specific monthly marketing figures, but Andrew politely declines while explaining their 30-to-60 day marketing payback model.
Focus on Physical Goods and Historical Funding Trajectory 7758 Nathan intensely challenges Andrew on why the company keeps cash in the bank rather than raising capital or spending more aggressively if marketing payback is truly 30 to 60 days. Andrew firmly counters by explaining marketing acquisition saturation, incremental scaling, and diminishing marginal returns.
The Famous Five Rapid-Fire Questions 5101 Nathan conducts the standard Famous Five rapid-fire questions, and Andrew cooperatively shares personal background and business reflections before Nathan summarizes the core metrics.

Statements from this episode (14)

Assertion Not checkable as stated
Blachman: Tophatter averages a 25% take rate
“So it varies based on the category and the seller, but on average, our take rate is about 25%.”
Andrew Blachman Dec 26, 2017 ▶ 2:09
Assertion Not checkable as stated
Tophatter attracts millions of daily active consumers
“But now today we've got, you know, millions of consumers coming every day.”
Andrew Blachman Dec 26, 2017 ▶ 3:04
Assertion Not checkable as stated
Tophatter items sell for an average price of $10 to $20
“But on average, we're about 10 to 20 bucks, and we do about a million transactions, sorry, a million dollars of volume a day.”
Andrew Blachman Dec 26, 2017 ▶ 4:03
Prediction Not checkable as stated
Blachman: Tophatter will hit $300M-$400M GMV and $80M-$100M revenue in 2017
“So this year we'll do somewhere between three and four hundred million dollars of Gross transactions and our take be between an 80 and a hundred million.”
Andrew Blachman Dec 26, 2017 ▶ 5:17
Assertion Not checkable as stated
Blachman: Tophatter runs at an 80% gross margin
“So our gross margin on the 80 to a hundred is about 80%.”
Andrew Blachman Dec 26, 2017 ▶ 6:22
Assertion Not checkable as stated
Blachman: Tophatter achieves marketing payback within 30 to 60 days
“So we actually end up getting payback on our marketing spend usually within about. 30 to 60 days.”
Andrew Blachman Dec 26, 2017 ▶ 6:55
Disclosure
Blachman: Tophatter operates at breakeven to maximize growth
“We essentially are operating at breakeven pace in order to grow as fast as we can.”
Andrew Blachman Dec 26, 2017 ▶ 7:19
Assertion Not checkable as stated
Blachman: Facebook is Tophatter's largest and most efficient acquisition channel
“So our biggest channel is Facebook. Because again, what we do is a hundred percent mobile and Facebook is the best, most efficient channel to acquire users for us.”
Andrew Blachman Dec 26, 2017 ▶ 7:43
Assertion Not checkable as stated
Blachman: Tophatter has doubled its business every year since 2012 launch
“We launched the product in 2012. So this is our sixth year. And we've essentially doubled the business every year since we started.”
Andrew Blachman Dec 26, 2017 ▶ 9:30
Disclosure
Blachman: Tophatter has raised $35M total, including a recent $21M round
“So to date we've raised thirty-five million and most recent round was twenty-one million dollars that was really Once the company, you know, the company's been profitable, as I mentioned, been sort of operating at breakeven, and we raised 20, twenty one millio…”
Andrew Blachman Dec 26, 2017 ▶ 10:11
Prediction Didn’t hold up
Blachman: Tophatter will reach $1B+ in top-line revenue within a few years
“And we think that within a few years, you know, this is at least a billion dollar top line business.”
Andrew Blachman Dec 26, 2017 ▶ 11:12
Insight
Blachman: Raising $1B limits e-commerce exits exclusively to IPOs
“The options available for you as a company in e-commerce is really just one, and that's to go public at some point. There aren't a lot of acquirers out there that can, they can you know, create, create success.”
Andrew Blachman Dec 26, 2017 ▶ 11:56
Assertion Not checkable as stated
Tophatter holds over $30M cash in the bank
“We've got, you know, over thirty million dollars of cash in the bank today and we can spend aggressively.”
Andrew Blachman Dec 26, 2017 ▶ 12:33
Insight
Blachman: Non-incremental 10x marketing jumps destroy e-commerce unit economics
“We pour all of the contribution back into more marketing so that we grow our marketing spend But we do it incrementally instead of in one fell swoop, because if you do it in one fell swoop, there's no way the economics are going to hold.”
Andrew Blachman Dec 26, 2017 ▶ 13:55
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