By Lenny Rachitsky · lennysnewsletter.com · @lennysan on X · YouTube · LinkedIn
Brian Rothenberg argues that a surprising number of billion-dollar companies, including Airbnb, Uber, Square and Eventbrite, share a little-understood growth loop in which demand-side users convert into supply-side participants. He explains that the first step is to check whether this conversion is already happening organically in your data, since forcing it from a cold start rarely works. He walks through how to measure buyer-to-seller conversion using cohorts and leading indicators, and why users may not convert (they often don't understand the supply-side offering). The piece then covers how to improve conversion through clearer branding, prominent calls to action on high-traffic pages, and targeted, personalized messaging at the moment users reach an "aha" point. It matters because it gives marketplace operators a concrete, data-driven playbook for a growth lever their competitors may overlook.
01Key takeaways
- Confirm that demand-to-supply conversion already happens organically before investing in a growth loop around it.
- Track buyer-to-seller conversion with monthly and low-latency cohorts, looking for stable or rising rates over time.
- Survey and interview users to find out whether the demand side understands that they can also become suppliers.
- Use prominent branding and calls to action on high-traffic demand-side pages such as confirmation screens, listings and headers.
- Introduce branding changes gradually, especially when creators want to white-label your product.
- Identify the behavioral aha moment where conversion jumps and send personalized, timely prompts at that point.
02Key sections
- Identifying the loop
- Demand-to-supply conversion is a growth loop where buyers become sellers, as seen at Lyft, Square and Eventbrite. The author recommends confirming the behavior already exists before investing in it.
- Measuring conversion
- Use cohort and low-latency analysis to track how quickly and how consistently demand users convert into supply. Qualitative signals like customer surveys help when data volume is still small.
- Diagnosing why users don't convert
- Survey and interview users to learn whether they understand the supply-side offering, and use converters' stated reasons to form hypotheses for experiments.
- Improving branding and calls to action
- Make the brand, the value and the supply-side action visible across demand-side pages such as checkout, confirmation, headers and listings, rolling out changes gradually to avoid overreacting.
- Targeting the aha moment
- Find the user segments and behavioral points where conversion jumps, such as cross-category usage, and send personalized, well-timed messages at those moments.
03From the post
“1. GTM motions of 30 B2B SaaS companies 2. Templates and examples of 1-Pagers and PRDs 3. A guide to marketplace city expansion Subscribe to get this newsletter every week 👇 Book of the month: The Cold Start Problem, by Andrew Chen Did you know that Andrew Chen has a book coming out?? Yes, the same Andrew Chen who’s written some of the most well-known growth essays out there (and who for the past three years has been working on this book instead of blogging): 1. Growth Hacker is the new VP Marketing 2. How to build a growth team 3. The Law of Shitty Clickthroughs 4. The Power User Curve: The best way to understand your most engaged users I’ve read a preview copy of Andrew’s book, and I can tell you it’s very good. It’s full of real-life examples, actionable advice, and concrete takeaways (basically, all the same reasons you subscribe to this newsletter). Pre-order now to make sure you get a copy as soon as it ships 👇👇👇 Pre-order The Cold Start Problem On to this week’s…”
04Frameworks mentioned
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.