The hierarchy of engagement | Sarah Tavel (Benchmark, Greylock, Pinterest)

Sarah Tavel is a General Partner at Benchmark and sits on the boards of Chainalysis, Hipcamp, Rekki, Cambly, and Medely. She is a founding member of All Raise, the nonprofit organization working to accelerate the success of women in the venture-capital and VC-backed startup ecosystem. Before Benchmark, Sarah was a partner at Greylock Partners. She joined Pinterest in 2012 as their first PM and launched their first search and recommendations features. She also led three acquisitions as she helped the company scale through a period of hypergrowth. In this episode, we discuss:
• Sarah’s Hierarchy of Engagement framework for growing a consumer startup
• The three levels of the Hierarchy of Engagement: core action, retention, and self-perpetuation
• The importance of measuring cohorts and maintaining focus on the core action
• Examples of core user actions from Pinterest and KZbin
• Sarah’s Hierarchy of Marketplaces framework for building a marketplace startup
• The three vectors of growth for dominating a marketplace
• Advice on “tipping the marketplace” and ultimately dominating the market
• The value of focusing on a constrained market
• How to avoid disruption
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Find the transcript and references at: www.lennyspodcast.com/the-hie...
Where to find Sarah Tavel:
• X: / sarahtavel
• LinkedIn: / sarahtavel
• Substack: www.sarahtavel.com/
Where to find Lenny:
• Newsletter: www.lennysnewsletter.com
• X: / lennysan
• LinkedIn: / lennyrachitsky
In this episode, we cover:
(00:00) Sarah’s background
(03:33) Framework 1: The Hierarchy of Engagement
(06:03) Level 1: Core action
(10:33) Level 2: Retention
(14:00) Level 3: Self-perpetuation
(19:32) The importance of focus
(23:54) The challenge of anonymity
(26:04) Advice for founders who want to increase retention
(29:34) What founders often get wrong
(31:43) Examples of core actions
(37:37) Finding your North Star Metric
(38:12) Who should use the Hierarchy of Engagement framework
(38:54) The Hierarchy of Marketplaces framework
(46:09) Level 1: Focus on a constrained opportunity
(50:19) Sarah’s “happy GMV” and “minimum viable happiness” concepts
(54:47) Thumbtack: a counterexample to this approach
(56:36) Signs you’re ready to move to level 2
(58:06) Level 2: Tipping the marketplace
(01:04:15) Tipping loops
(01:10:53) Not all markets are susceptible to tipping
(01:15:55) The challenge of homogeneity in B2B marketplaces
(01:20:29) Signs you’re tipping successfully
(01:21:43) Level 3: Dominating the market
(01:28:29) The opportunity in underestimated markets
(01:30:11) The challenges of chasing GMV and losing focus
(01:36:36) Recognizing currents and momentum in the market
(01:39:20) You can never rest on your laurels
(01:41:03) How to apply these frameworks outside of marketplaces
(01:42:57) Three ways to find marketplace opportunity
(01:45:10 ) Lightning round
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Lenny may be an investor in the companies discussed.

[@bivinpeter2720]

Loved it. There was a smile on Sarah's face throughout the talk. How pleasant and insightful. And Lenny is always calm and a good listener.

[@matthewjamestaylorcom]

This is the best podcast interview that I've listed to without a doubt, so many useful gold nuggets!! BOOKMARKED!

[@tebogoloate4350]

One of the best podcasts I have listened to. Very practical and insightful with real world examples.

[@xyxxabc123098]

This was an incredible interview - loved Sarah's insights.

[@ipranay]

Very insightful! Thanks Sarah and Lenny! I love the current analogy. Sounds like a great way to think about a novel idea in the very early stages.

[@Motivation2Invest]

Great video Lenny/Sarah, nice insights on marketplaces & post links are appreciated. 🚀

[@rchadda]

This conversation is gold!

[@fabioramos7261]

Thank you very much, guys! ❤

[@abdullahaboayesha]

Awesome Loved This , Thank you Lenny , Love you

[@Entrepreneur_in_progress]

It would be great to see Professor Steve Blank, the professor of Eric Ries on your show. The listeners will have a more systemic view and framework to develop and build startups. His framework of customer development is extremely useful for early-stage companies.

[@katetyshchenko1806]

Wow what amazing content❤

[@productmanagementbyutsav3069]

"Every strength has a corresponding weakness"

[@bhanupratapsingh4660]

Hi Lenny, could you add the link to on how to figure out activation milestone?

[@LennysPodcast]

Good point, will do!

[@LennysPodcast]

Added!

[@productmanagementbyutsav3069]

"You can't rest on your laurels" buggest takeaway from this session :)