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The Marketplace Academy Podcast by Sharetribe is all about starting and running a marketplace business.
Hello, and welcome. I am Schwartz, CMO at Sharedripe, and this is not a new Marketplace Academy podcast episode, but instead this is a sneaky cross promotion for a new podcast series that we're putting out called Share Tribe Founder Stories. It is a interview podcast where we talk to founders who've built their two sided platforms on our tech, of course, tackling the exact same challenges that many of you face, how to get from idea to launch, growth hacks, pitfalls, lessons learned. So if you are building a marketplace, doesn't really matter if you have a Sharedrive or not. Do give this a listen, and if you like it, please subscribe to Sharedrive Founder's series on Spotify, Apple Podcast, or wherever you get your shows.
Sjoerd Handgraaf (Sharetribe):This is the first episode. Enjoy.
Marcel Fairbairn (GearSource):In 02/2018 or '19, we started calling ourselves a marketplace. And Okay. Then the plot thickens, and basically, we did our first of three replatforms in 2020. We did three nobody does this in the marketplace community. And for anyone listening, please never do this.
Marcel Fairbairn (GearSource):Please, I'm telling you now, people at home, do not do this. We replatform three times in three years, three and a half years. They're all terrible stories.
Sjoerd Handgraaf (Sharetribe):Welcome to ShareTripe founder stories. Today, I'm talking to Marcel Fairbairn. He's the founder and CEO of one of the oldest existing marketplace companies, GearSource. You heard that right. GearSource has been around since 02/2002.
Sjoerd Handgraaf (Sharetribe):That gives Marcel every right to call himself the o g of marketplaces. Only a few giants like eBay and Amazon trace back as far as these very early days of ecommerce. GearSource is a marketplace for professional production equipment. Its early clients included UpStaging, one of the largest touring lighting companies in the world that work with superstars like the Rolling Stones, U2, and Madonna. But it was only around 02/2018 when Marcel realized the business he had spent over fifteen years building was actually a marketplace.
Sjoerd Handgraaf (Sharetribe):And this realization changed everything from how he runs the business to how he thinks about the technology that powers it. Today, GearSource runs on Sharedrive after what Marcel describes as three terrible replatforms in three years. He's gone from doing everything manually, and I mean everything because 02/2002, remember, to now running a very profitable, low touch, global marketplace business. Oh, and somewhere in between, Marcel survived the COVID nineteen pandemic, which made live events, his livelihood, temporarily illegal. I am really excited to bring you this chat with Marcel.
Sjoerd Handgraaf (Sharetribe):So without further ado, let's dive into the wisdom of a true marketplace pioneer who's weathered more storms than most founders will ever face. Hi, Marcel. Welcome to the podcast.
Marcel Fairbairn (GearSource):Hey, Stuart. Thanks for having me. I appreciate it.
Sjoerd Handgraaf (Sharetribe):Yeah. Thanks for for making the time. It's going to be the first ever Skype customer focused podcast. Things might be a little bit bumpy on the way, but let's first put some context around who you are and and what we're going to talk about with Gearsource. So could you tell us a little bit about, what you did before you started, Gearsource?
Marcel Fairbairn (GearSource):Yeah. First, it's it's funny that you said this is the first ever Founders podcast because I believe I'm probably one of the first ever Marketplace founders who who was crazy enough to get into this business. So, it's it's quite appropriate. People call me the OG of Marketplace because I think other than eBay and and Amazon and maybe a couple other, like, of that size, I was the only one. I began my business life in the weirdest possible place.
Marcel Fairbairn (GearSource):I was a a musician, a professional musician. Well Alright. Sort of a professional musician. I was a 13 year old musician who was a singer, and, one day the, our manager who was a Catholic priest came to rehearsals and said, Marcel, I've just fired our bass player and now you need to learn to play bass as well, and the next gig is in thirty days, you need to learn the instrument and 40 songs in thirty days. Okay.
Marcel Fairbairn (GearSource):So I did that and, you know, not not too far into my career as a professional musician, I realized that I was making $200 a week and spending $2.50 on my bar tab, and
Sjoerd Handgraaf (Sharetribe):Okay.
Marcel Fairbairn (GearSource):It probably wasn't a recipe for, you know, life success and and financial success. So It does
Sjoerd Handgraaf (Sharetribe):sound like a professional musician, though.
Marcel Fairbairn (GearSource):It it's very true. It's very true. So I pursued a life in sales and and specifically music retail, guitars, instruments of all kinds, but in a rock and roll sort of music store, and that eventually evolved to sound and lighting systems because I realized that the AOV was much higher on a on a hundred thousand dollar lighting package or sound system than it was on a $500 guitar. And so you could work just as hard, but the outcome was was much greater. Eventually, I I I was living in Canada, Western Canada at the time, and I landed a job with a, Danish manufacturer called Martin Lighting, and, running not running, but, managing sales for their North American distributor.
Marcel Fairbairn (GearSource):So I had a twelve year career that spawned into a very nice career, selling lighting for massive tours like Madonna and Michael Jackson, the Rolling Stones, the Eagles, so many really, really great artists. You know, traveling the world, getting to know people, like when I first started working with Martin, I was from Western Canada. I'd only really been to Los Angeles and New York and Las Vegas for a trade show, but I didn't really know my way around The United States, and here I am the Mhmm. You know, the vice president of sales and marketing. And so traveling the world, it was it was amazing.
Marcel Fairbairn (GearSource):I got to know a lot of great people in great countries, and eventually became a minority owner in a lighting brand in 02/2002. I got bored, really, is what happened, and and I decided to leave that company, sell out my shares, and become an entrepreneur. And it was always sort of in my spirit, in my in my mind to be an entrepreneur, in my DNA, and even working for companies, I was very entrepreneurial. So, I did what everybody did at that time, and maybe even a bit early for you, but I went out and bought a CD set, which was was Seth Godin, and it was a really cheesy name. I think it was like making money on the Internet or creating a business on the Internet or something.
Marcel Fairbairn (GearSource):Yeah. And this is February, probably late two thousand one at this point, and I thought, you know, if I'm gonna my next thing has to be on this thing they call the Internet, and it's gotta be an Internet business of sorts. And the second thing I knew is that the industry I was in was struggling with something that was related to the ramp up of technology and how much quicker technology was moving in that industry. Lighting fixtures, sound systems were going from analog to digital. Lighting systems were going into these automated lighting packages that were now advancing very quickly.
Marcel Fairbairn (GearSource):And Mhmm. So what I saw in this, as a guy who was running facilities, to distribute these products, was that products were getting pushed further and further back on the shelf as new models came out. Imagine if you had a million iPhone ones in stock, and the iPhone two comes, and you just go, oh, go back further on the shelf, we're gonna put the iPhone twos in front of you. Eventually those iPhone ones have no value. Yeah.
Marcel Fairbairn (GearSource):So, I'm listening to this Seth Godin thing and he tells this story of a hippopotamus and some special bird, the hippopotamus lays in mud, staying cool. Mhmm. And he lays there with his mouth open. And there's a little bird that goes inside and lands in his mouth and eats all of the food off the hippo's teeth. And the moral of the story is basically the hippo ends up with clean teeth, he's happy, and the bird was fed.
Marcel Fairbairn (GearSource):Really disgusting meal, but the bird's pretty happy, right? And so Seth's message was that you need to create businesses on the internet, that you're doing something that to you is your bread and butter. It's your it's your food, and but to the to the customer or to the people that you're serving, it's nothing. It's it's like literally you're taking such a small thing from them, but to you it becomes your entire revenue. This was the spark for a marketplace.
Marcel Fairbairn (GearSource):Yeah. And so, what I decided was that in my industry, there was this sort of invisible inventory problem happening, and many people didn't even recognize it. They were so focused on selling the latest, newest stuff, and they were forgetting about all this old stuff. Sales teams were incentivized to sell sell the new products. My initial focus in coming up with this, and at the time I didn't know it was called a thesis, but it was basically a thesis, on Marketplace was that manufacturers and distributors were going to run into very, significant problems with inventory, and there was really no way to get their sales teams focused on selling this old inventory except to just drop the price so low, and then give the sales guy, you know, a a big commission to sell it.
Marcel Fairbairn (GearSource):But instead, I was gonna come along and help them with that inventory. I was gonna be ultimately 100% focused on that either B stock or discontinued or even used demo stock or whatever it was Yeah. While they focused on their new product.
Sjoerd Handgraaf (Sharetribe):Had they realized that already as a problem, or were you sort of ahead of the curve, or they're, like, sort of in denial? Because, know, like, I'm just thinking about they're expensive. You know, they're not, like, digital assets of which you can just, like
Marcel Fairbairn (GearSource):Right.
Sjoerd Handgraaf (Sharetribe):Duplicate a million caught, like, without cost. Like, we can it it must be somewhere on the p and l. Right?
Marcel Fairbairn (GearSource):Like It is, but it's ignored. And so if your overall inventory number is 10,000,000, and Yeah. There's a $1,000,000 problem in that 10,000,000, you know, we'll focus on that next week, next month, next year, whatever. And
Sjoerd Handgraaf (Sharetribe):Got it. Got it.
Marcel Fairbairn (GearSource):So I think people, large enough companies who had asset managers and people who were inventory control experts or whatever, they were noticing this trend. But I was I was running a couple of fairly large businesses. I mean, large $25,000,000 businesses, who this could really become a significant problem. So I think it was bubbling, but it it hadn't yet reached the surface. Again, that was basically my initial thesis for for a marketplace was, while they were focused on selling new equipment, I was going to build a business on the internet because Seth Godin said so.
Marcel Fairbairn (GearSource):And also because from the very earliest time, in my mind, I wanted to be a remote company. I had a a place that I, had built up in Canada in the mountains, and I wanted to spend time in Canada where I'm from. Yeah. But I also wanted to be able to be in the Florida Keys, if I wanted to as well, and nobody knew the difference. Nobody cared where I was, which meant it was a remote company way early.
Marcel Fairbairn (GearSource):Very shortly after launching, and I know we'll get into the launch, but very shortly after, I sort of changed my direction based on, you know, outreach from a a touring rental company who said, can you also do this service for us? And really, my focus shifted away from manufacturers as much because it was a problem there, but it was a much larger problem for rental companies who were constantly evolving their inventory. So
Sjoerd Handgraaf (Sharetribe):So had you had you already identified, right, because, like, if we sort of break this down into the supply demand part, so so, obviously, your supply is there
Marcel Fairbairn (GearSource):just sort of
Sjoerd Handgraaf (Sharetribe):all soon begging you to take it off their hands.
Marcel Fairbairn (GearSource):Yeah.
Sjoerd Handgraaf (Sharetribe):But if they're not selling it, you know, if they can't move it, who did you have in mind to move it to
Marcel Fairbairn (GearSource):at this
Sjoerd Handgraaf (Sharetribe):point?
Marcel Fairbairn (GearSource):Yeah. It's a great question. So one of the things that I learned early on is most of those companies would not sell to their competitors. They wouldn't go to a direct competitor and say, here's a hundred of these lights that I no longer need. Would you like to buy them?
Marcel Fairbairn (GearSource):Because they're then basically building that competitor to beat up on them. However, they would allow me to sell them to their competitor, which is very odd. I mean, literally, I have done hundred thousand plus dollar deals where a company sent a truck a block away to pick the lights up from their competitor or the sound system from their competitor and bring it back to their warehouse. It was done on a platform based thousands of miles away. Extraordinary.
Marcel Fairbairn (GearSource):Okay.
Sjoerd Handgraaf (Sharetribe):Yeah. So you were saying I cut you off. You were saying that, the rental industry came in, or tour rental industry came in, so so you changed directions a little bit?
Marcel Fairbairn (GearSource):My initial target, I guess, for supply side was really specifically manufacturers and distributors, because that's really where I came from that business, and I saw the problem developing. So those businesses did support us early on, but it wasn't big enough, to really be exciting. There there was, you know, first of all, again, they had to identify and accept that there was a problem, and then secondly, they they had to be willing and prepared to allow an outside company to come in and solve that problem for them. Mhmm. And Yeah.
Marcel Fairbairn (GearSource):However, the so in our industry, in the in the sound and lighting and video rental industry, where we rent, or our customers rent to performers, or to festivals, or to, trade shows and conventions and conferences and things. These companies hold a huge amount of inventory, and it's much of the business is specification driven, meaning someone side is saying, okay, we're going out with the Rolling Stones next month, and we want ABC light. And the rental company might say, well, we have DEF light. Will that be okay? No, no.
Marcel Fairbairn (GearSource):I have to have ABC lights. So now that company has to get rid of some a some DEF lights and go out and buy the ABC lights, and so they need to they they don't have a disposal plan. None of these companies, at least initially, in the early stages, had a disposal plan. They just knew that they had to go buy this other stuff, and they didn't have room on the shelves for it because they already had old stuff, and so it was it was a significant problem in a much larger part of the market, which was, you know, were these rental companies, these large rental and production companies globally. Yeah.
Marcel Fairbairn (GearSource):And so, really we shifted focus to not necessarily our direct customers, which we thought were manufacturers and distributors, but to our customers' customers, these rental companies. And Yeah. That's where things really took off.
Sjoerd Handgraaf (Sharetribe):How did you because this started, like, early two thousand, you said? Like, 02/2003? '2. How did you get yeah. How how did you get the first platform up and running?
Sjoerd Handgraaf (Sharetribe):Like, in your Yeah.
Marcel Fairbairn (GearSource):That is a that's a crazy answer, actually. So, I called the most computer savvy person I knew, was a friend of mine named Jamie, and I said, Jamie? And Jamie was in my industry, and I said, Jamie, here's what I wanna do, I wanna build this platform where we're selling product for other companies, so we don't have any inventory, it's not e commerce, which was even early at that time as well. We're gonna be selling from one company to another company, and you know, neither, we don't own any of the equipment, we never see the equipment. He goes, well that's a crazy business.
Marcel Fairbairn (GearSource):And I said, yeah, it probably is, but we're gonna try it anyway. And so he came up with a piece of software that was actually CD ROMs. It was a company from England called Actinic. Never heard of it before, never seen it since. We were probably the one and only package they sold.
Marcel Fairbairn (GearSource):And so he built a website using this on prem software. I had a server in my bedroom, in my house that was Mhmm. That had this software on it. It was probably really early e commerce software, it had nothing to do with marketplace whatsoever. No.
Marcel Fairbairn (GearSource):No, no. But it worked. You know, it got us off the ground, and it carried us for about two years. I think 02/2004 was when we launched a proprietary piece of marketplace software.
Sjoerd Handgraaf (Sharetribe):Okay. Yeah. That's crazy. I mean, like, if I think about, like, two thousand two because I'm thinking, like, oh, yeah. Early.
Sjoerd Handgraaf (Sharetribe):That's like but, you know, like, that that's just like It's ridiculous. Like building yeah. I I remember, like, building websites at the time with, like, Dreamweaver Yeah. Or, like or just or just or just, like, flat out HTML, like, just hand coded HTML. Yeah.
Sjoerd Handgraaf (Sharetribe):Just I I cannot even imagine if someone would have come to me, like, because for some people in my network, I was the computer savvy guy, and they'd be like, hey. I need this platform. I I mean, there's just not even there's not even a reference out there.
Marcel Fairbairn (GearSource):It it was wild. And and I'll tell you, when it was working, nothing was automated. I mean, literally, all it would do is is go ding, you got an order, and we'd have to go take that order. We, me, would have to take that order, put it in, QuickBooks, and from QuickBooks, we would send a purchase order to the seller and an invoice to the buyer, and we'd collect the money and, pay it to the seller, and the seller would ship to the buyer, and, you know, it was crazy how complicated the business was, but how, you know, remarkably simple it was too, in a sense.
Sjoerd Handgraaf (Sharetribe):Yeah. So this was 02/2004. You had already shifted to the rental thing, to the rental 2002. To rental direction?
Marcel Fairbairn (GearSource):2002. By the end of the year in 02/2002, we had already a company out of Chicago, which is one of the largest touring lighting companies in the world, is called Upstaging. You know, they tour with, you know, the Stones and U2 and Madonna and all these big acts. Yeah. They were good friends of me of mine, and they saw a couple of press releases and and some just people talking on the internet and stuff, hey, there's this new website called GearSource.
Sjoerd Handgraaf (Sharetribe):Mhmm.
Marcel Fairbairn (GearSource):John Huddleston, who ran that company, called me up and said, hey, Marcel, is this something that you could also do for our company? And I went, I guess so. Know, let me work that out for you. Yeah. And it really was the same business.
Marcel Fairbairn (GearSource):It was literally no different. It was just us widening, you know, our thoughts on supply to include what now is probably 90% of our supply is Mhmm. That rental and production side of the business.
Sjoerd Handgraaf (Sharetribe):Did you have to so 02/2004, you launched your own proprietary platform?
Marcel Fairbairn (GearSource):Yes.
Sjoerd Handgraaf (Sharetribe):Did you make any changes otherwise, like, in the business? Because you said, like, now it's evolved to 90%. So so how did you yeah. Maybe you can talk us a little bit through, like, the development of the business, like, in terms of, like, changes of customers, or or is it just directional growth along the same path?
Marcel Fairbairn (GearSource):Pretty much. Yeah. Pretty much it was kind of linear growth, the exact same customer types just connecting more of them together. More buyers, more sellers. You know, we got a bit of a network effect going, but it was quite organic.
Marcel Fairbairn (GearSource):Like, right since the very beginning, we've never done any advertising. First of all, there were no meta ads or Google ads back then yet. But even when that existed, when AdWords became a big thing, and and then eventually, Facebook advertising and stuff, we still didn't Yeah. Do that. Actually, our very first digital ads started in 2024.
Marcel Fairbairn (GearSource):That that's when we started advertising, was 2024. We had never done
Sjoerd Handgraaf (Sharetribe):any advertising prior to that. So 2024, the first advertisement, but at what point, you know, you mentioned you introed your story saying, about the Seth Godin book, and you want to build this business. Like, at what point do you did you realize that, oh, yeah. This is this is going where I want it to go. Like, this is, this has momentum or this has potential.
Marcel Fairbairn (GearSource):Yeah. It's a great question because actually, I was very cognizant of that because I I had been although I was very entrepreneurial from a mindset standpoint, physically Mhmm. As far as a paycheck, I was collecting a paycheck my entire career thus far. It was quite a a leap of faith going from collecting a fairly hefty paycheck at the time to no paycheck whatsoever, and spending my own money to build this thing because I never thought of investors. Didn't know of any such thing as a VC.
Marcel Fairbairn (GearSource):I had no idea that you could get other people to pay for your business startup, you know? Yeah. Yeah. So I just said, okay, well, if I'm gonna build this, I gotta scrape up some cash. And my now ex wife, at the time, I had a conversation with her, and I said, I'm gonna take a second mortgage on our house, plus I'm gonna take pretty much all the money in our savings account, and I'm gonna go all in on building this little company.
Marcel Fairbairn (GearSource):And she goes, okay. And, you know, when might we consider that that's gonna turn into something? She was also in the music business. She worked for record companies. And and I said, okay, well, here's my plan, is at six months, I'm gonna stop and I'm gonna basically do a good look at the business, take a good look at the business, how's it doing?
Marcel Fairbairn (GearSource):Mhmm. Does it have a future? And so at six months, I did that, and by then, we already had some pretty good, momentum. We were making So then I said, okay, in six more months, twelve months from starting the company, I want to have replaced my paycheck, my previous paycheck.
Sjoerd Handgraaf (Sharetribe):Now this was a big Okay.
Marcel Fairbairn (GearSource):Month. You know, this was
Sjoerd Handgraaf (Sharetribe):Mhmm.
Marcel Fairbairn (GearSource):This was, you know, in 02/2002, I don't know, $15,000 a month or something, maybe a little more than So I said, you know, I wanna replace my paycheck in another six months. And I sat down in six months, I had just started taking a paycheck that was that was good enough. And so I said, okay. We got something here, and, you know, I've never looked back since. So, it's it it was a journey.
Sjoerd Handgraaf (Sharetribe):Have you changed anything in your in your, like, revenue model? Like, because again, that you didn't really have any examples. So how did you monetize, actually?
Marcel Fairbairn (GearSource):Well, so right from the beginning, it it was basically like a a commission or fee based system. But in the beginning, we were managing the listing. The seller wasn't managing the listing. So we were controlling the price. So if he told us he wanted $1,000, we would make it 1,100, 12 hundred, 15 hundred, whatever we thought the market would bear, and then we'd pay his thousand dollars.
Marcel Fairbairn (GearSource):So I think our average, take was around 22% in the beginning. For most of our existence, it was around 18 or 19%, and then when you talk about evolution, you know, most companies look to increase their revenue. But when we started thinking about growth, which was 2019, is when I really said, okay, you know, we've got something here. First of all, we need to replatform, but second, we we really need to start focusing on growth. The biggest thing we did is we cut our margins.
Marcel Fairbairn (GearSource):And, so we took our take rate down to what is now a blended average of about 11%, but our lowest take rate is is 7% to very large, very frequent sellers. And it was because, obviously, the competitive landscape shifted throughout the journey.
Sjoerd Handgraaf (Sharetribe):Yeah. Could you talk talk me through a little bit through the through that thinking? Because I think this is a really interesting point also for for, you know, for founders listening because how to monetize, what what subscription. And then, you know, if you were enjoying a particular take, like, what was the what was the sort of impetus for making that change? Like, you of course, you said the landscape has changed, but but, like, realistically, like, what what happened, and what what what is the consideration there?
Marcel Fairbairn (GearSource):Yeah. It's a great question because there is actually an event that happens. So we were in talks with a marketplace founder of a company called Reverb in '20 I think it was 2017 going into 2018, right before they sold. Those talks went very quiet at one point and I didn't know why, I was like, what just happened here? Then, know, a month later I got a call from from the founder David Kalt who said, yeah, Marcel, I'm sorry I ghosted you, but we we sold to Etsy.
Marcel Fairbairn (GearSource):You know, I guess that's a good reason for ghosting me. That's okay.
Sjoerd Handgraaf (Sharetribe):Fair enough. Yeah.
Marcel Fairbairn (GearSource):I wasn't upset because David Kalt gave me a very good lesson. You know, he kinda gave me a beat down on our first call, really. First of all, he said, I love your business because you've managed to go far upmarket from where Reverb is. Reverb sells guitars and amplifiers and drums and instruments, and we sell sound systems, but mostly low end sound systems, really inexpensive like for DJs or churches or whatever. You're selling million dollar sound systems, and you're selling them to other countries, you know.
Marcel Fairbairn (GearSource):You've done something we haven't managed to do, and I'm curious. And so by the end of that call, his advice to me was was two things. One is, you know, it's really hard to invest in a business who doesn't have a tech co founder. You're not fully committed to being a marketplace unless you and I'm not slamming David Kalt. He's a very successful man, but I disagree with him on this.
Marcel Fairbairn (GearSource):And ShareTribe wouldn't exist if he was if he was correct.
Sjoerd Handgraaf (Sharetribe):If he was right, yeah.
Marcel Fairbairn (GearSource):Yeah. If he was right, and your co founder had to be a a product guy or girl Mhmm. Share tribe and other marketplace platforms wouldn't exist. But the thing that he did tell me that was accurate is we were far too high touch, and it was it was gonna be impossible to scale the business to where we wanted to be and where we should be unless we become a lower touch company. And I knew exactly what he meant because I was I was struggling with the same concept, which is you know, we're handholding every customer, we're handholding every deal, we're we're actively involved in absolutely every sale we make, whether it's a hundred dollars or a hundred thousand dollars.
Marcel Fairbairn (GearSource):That was a pivotal discussion that actually, one of the things he taught me is that we were a marketplace. Yeah. You know, until then, I had never called us a marketplace. I didn't know that
Sjoerd Handgraaf (Sharetribe):that's what we were Yeah.
Marcel Fairbairn (GearSource):I mean, we had taglines like connecting buyers and sellers globally, but that never became in my brain marketplace, you know? No one ever said, hey, do you realize you're actually a marketplace? And so in 02/2018 or '19, we started calling ourselves a marketplace. And Okay. Then, you know, the story, the plot thickens, and basically, we did our first of three replatforms, in 2020.
Marcel Fairbairn (GearSource):We did three nobody does this in the marketplace community, and for anyone listening, please never do this. Please, I'm telling you now, people at home, do not do this. We replatformed three times in three years, three and a half years. They're all terrible stories, but the first one wasn't. The first one basically took us from going backwards a little bit.
Marcel Fairbairn (GearSource):In 02/2004, when we finally built our own platform, it was built on ColdFusion. Do you even know what that is?
Sjoerd Handgraaf (Sharetribe):No. Most people don't I feel I feel I'm quite good in touch with like older technologies, and this this is not one of them.
Marcel Fairbairn (GearSource):Yeah. Cold fusion, I think the only people on earth who still have any cold fusion product are the government. Okay. There are so few coders in the world who know anything about cold fusion anymore. Probably had one of the last ones who was on our staff.
Marcel Fairbairn (GearSource):And Yeah. Literally, he didn't build anything. He just kept it from eating itself and imploding. Okay. And so we were on ColdFusion for almost fifteen years.
Marcel Fairbairn (GearSource):Yeah. And, so in 2020, or in 2019, we decided, okay, really it's about time to get off of ColdFusion, and so I said, I'm gonna go out and try and find the Shopify of Marketplace, and see if there's a platform out there, because I don't wanna build. I wanna I wanna buy, I wanna rent. We didn't find ShareTribe for some reason.
Sjoerd Handgraaf (Sharetribe):Mhmm. I I take that personally.
Marcel Fairbairn (GearSource):Well, it was '20 it was 2019, so it was early for you guys as well. Yeah. Yeah. Yeah. And probably too early.
Marcel Fairbairn (GearSource):It would have been too early for us, I think. I don't know that I think so. Yeah. I think you were more of a About still here. Smaller enthusiast marketplace platform more than because we were pretty enterprise y, you know.
Sjoerd Handgraaf (Sharetribe):Yeah. Yeah.
Marcel Fairbairn (GearSource):Yeah. The best thing we could find was a combination of WooCommerce and Doken. And for those who don't know, Doken is a is a plugin from India. We were one of their first customers, and it takes WooCommerce and makes it into a multi vendor marketplace piece of software. So we hired a developer, an outside developer, to rebuild basically GearSource onto this combination of software, WooCommerce and and Mhmm.
Marcel Fairbairn (GearSource):And Doken.
Sjoerd Handgraaf (Sharetribe):Isn't WooCommerce also I mean, we're we're we're not going to try this. You know, I'll try to prevent to, like, this is not slam your competitor.
Marcel Fairbairn (GearSource):Yeah. Yeah.
Sjoerd Handgraaf (Sharetribe):Yeah. But isn't WooCommerce doesn't that require WordPress?
Marcel Fairbairn (GearSource):It is. Yes. It's all built
Sjoerd Handgraaf (Sharetribe):on Yes. It's like WordPress on which you build Correct. WooCommerce Yep. On which you then have Ducon. Okay.
Sjoerd Handgraaf (Sharetribe):Yeah. Just so that I understand.
Marcel Fairbairn (GearSource):Yeah. The team of developers who I hired, they they did a bunch of research and decided that this was gonna work. It was you know, they basically checked all the boxes. On this side was needs, on this side was, you know, things that it offered, and it checked most of the boxes that we needed. Everyone says, I was in the worst business for COVID.
Marcel Fairbairn (GearSource):We were in the worst business for COVID. Live events, forget it. You know, it was illegal to have a live event. So, you know, we were in by far the worst business. I can't think of one that's worse than than live events.
Marcel Fairbairn (GearSource):So all of our customers were at zero revenue. Some of them eventually went to like these these virtual studios and virtual performances and stuff, but it wasn't generating any cash, not enough to to really be a real company. So one, it was a great time to build a platform because you had time. You know, there was nothing else to do. Mhmm.
Marcel Fairbairn (GearSource):But obviously, it was it was heavily, a financial drain on a company that wasn't making any money, throughout 2020. So we launched in September of twenty twenty. And again, either the best or worst time to launch a business is when you have very few customers. Mhmm. Mhmm.
Marcel Fairbairn (GearSource):But we did have an audience because people were sitting at home. They did they didn't really have anything to do. They weren't working. We were able to get it working. It launched, I think, in September of twenty twenty, and one of the people who helped us get it launched was Dan Melnick, who was one of the architects of Reverb.
Marcel Fairbairn (GearSource):He he was the COO at Reverb before they sold, and very smart guy. He helped us basically because it was not easy. The the DoCan guys at at the time were impossible to deal with. WooCommerce was not easy. WordPress was not easy.
Marcel Fairbairn (GearSource):It really was the wrong platform for us. But we got it launched, and I'll tell you what it did for us, and this is going back to your original question, which took a while, but, it convinced us that not only could we automate a lot of things, and and take ourselves out of the loop on a lot of things, but that we could lower our margin, and lower our take rate, and put us in a much more marketplace y place. And so the the WooCommerce platform and my conversations with David Kahl took us from behaving like sort of a buy sell company that happened to be selling other people's inventory Yeah. Being a a real marketplace.
Sjoerd Handgraaf (Sharetribe):Yeah. That's so interesting because, like, we have that as a you know, like, in the marketing team, we have that as one of the thesis that there's actually loads of marketplaces out there who do not see themselves as a marketplace business. Right? Like, we always give the example of, like, fashion, like, like, you know, secondhand fashion, but they they go look for business advice in, like, fashion business. There's lots of people who do not have the realization that, oh, actually, 80% you're more like a marketplace and only 20% of your special sauce is the fashion part.
Sjoerd Handgraaf (Sharetribe):So, like Yeah. That's just mind blowing that you've done that for so long and it took so long to just not that it really has maybe hampered you, but just sort of open a whole new perspective to how to run the business. So yeah, So you're you're saying yeah.
Marcel Fairbairn (GearSource):Completely changed my mindset. Like, changed Yeah. That was a significant and I'm very grateful to David Kalt, even though he didn't end up buying our company. Yeah. I didn't really wanna sell anyways.
Marcel Fairbairn (GearSource):But Yeah. I'm very grateful to him for giving me that education and sort of a a wake up call, and and it just changed everything about the way I thought. And Yeah. You know, down to where it's continued to evolve to where today, you know, we've even changed our hiring and the types of people that we're after for the company. We're a marketplace company now.
Marcel Fairbairn (GearSource):We're not a lighting or a sound or a video company. We're a marketplace company that could be selling automotive parts, or it could be selling sound and lighting equipment. Yeah. It was it was a great education. If I can continue just for a moment longer on the WooCommerce thing.
Sjoerd Handgraaf (Sharetribe):Yeah. So Go ahead.
Marcel Fairbairn (GearSource):As our industry opened up again, basically, late twenty twenty one, because, again, worst industry, we were the last one to come back basically. Our WooCommerce site just again started eating itself. It it we had a full time developer just keeping it from crashing. We were always at like 99.9% of server use, and I mean, was just, it was unbelievably unreliable and horrible, and most of the features that were supposed to work didn't work. It was impossible to build on top of because it was so just buggy as heck, and it was just a nasty, nasty but it worked as a marketplace.
Marcel Fairbairn (GearSource):It got us to behave like we, for the first time, we had Stripe. Like we were literally people were paying us either by check or by wire transfer or by credit card, and then we were paying sellers either by check or by wire transfer. You know, haven't written a check since I think, 2020 when when that it really evolved my thought process and my way of thinking, which then evolved the processes and and the systems and methods for how we did what we did. That continued on a journey where we we had one stopover in the middle, which I won't talk about much, but another ShareTribe competitor, where it was a relatively not relatively, it was a complete, disaster. So we were only on that platform.
Marcel Fairbairn (GearSource):You know how hard it is to build or to move a marketplace, to migrate a marketplace onto a new platform. We were only on that platform for about nine or ten months, and had to build another one, which at that time was ShareTribe.
Sjoerd Handgraaf (Sharetribe):Yeah. I mean, we're obviously very, very happy to have you, and have it, I think, you're you're definitely the anomaly here because, like, if you go to sharetribe.com, like, it'll it it says, like, for founders and, like, our positioning is indeed very much towards, like, helping someone get a marketplace off the ground who is not starting. We're we're we're not yet I think we're getting there also through projects, like, with you towards this situation where where migrating becomes, much more intuitively or, like, much much more fluent. Also because I'm quite like a similar maybe realization to your side, that for us, it's also a realization that that is a part of the market that we're currently not taught to. Like, there is.
Sjoerd Handgraaf (Sharetribe):Yeah. There are loads of marketplaces out there who might indeed because despite your own terrible experiences with with WordPress or or the the other competitor, there's people for who this works or who think that this is as good as shit gets. You know?
Marcel Fairbairn (GearSource):Yeah. And so
Sjoerd Handgraaf (Sharetribe):we we we we'd be happy to be able to show show them also, like, a better alternative, so to speak. What's the number one feature that you're sort of most happy with that you're, like, you've built now with us that that you couldn't build in the other situations?
Marcel Fairbairn (GearSource):Well, I wouldn't say it's a feature. I would say it's just an overall thing, which is reliability and and just Mhmm. You know, for me, like, there was a show with Dudley Moore in it where he was an advertising executive, and he went crazy Right. And he could only tell the truth. He made an ad for Volvo, and he said Volvo, boxy but good.
Marcel Fairbairn (GearSource):And so to me, ShareTribe is is a little bit like Volvo. You know, it doesn't have a ton of crazy bells and whistles, and and it doesn't have the most sexy features you're ever gonna see in a platform. Mhmm. But it's unbelievably solid and reliable, and that's what we needed at that point. Because remember, we've gone through it by now, this was gonna be our fourth platform in four years.
Marcel Fairbairn (GearSource):Mhmm. And it needed to be very solid, very reliable. You know, we went through a has and doesn't have, sort of, you know, whatever journey
Sjoerd Handgraaf (Sharetribe):Uh-huh.
Marcel Fairbairn (GearSource):With Journey Horizon even, you know, who was one of the developers that we met through ShareTribe. We knew what we were getting into as far as the the didn't haves, which, you know, really nothing too tragic as far as our platform was concerned.
Sjoerd Handgraaf (Sharetribe):Mhmm. Mhmm.
Marcel Fairbairn (GearSource):And the things that it did have were very, good. So, yeah, for us for us, it's been very pleasant. It's almost like if you had three really bad girlfriends in a row or something. The fourth one, all of a sudden, you know, you're two years into it
Sjoerd Handgraaf (Sharetribe):and
Marcel Fairbairn (GearSource):you're going, I really still like this girl, you know? And that's where I'm that's where I'm at with ShareTribe, You know? Yeah.
Sjoerd Handgraaf (Sharetribe):Happy to hear it also. Happy to take the the fall fall, you know, coming from Sweden. They're on the other side of the pond of where we're at. So I think that's appropriate appropriate metaphor. I'll I'll take that.
Sjoerd Handgraaf (Sharetribe):In a way, you are a very recent marketplace founder. Right? Because you've only recently realized your marketplace. Is there any any advice that you have for other, you know, early share type? Like, this is going to go out, of course, to to our mailings, to our customers, many of them very early on.
Sjoerd Handgraaf (Sharetribe):Like, what would you give as advice, like, for people who are starting a marketplace that, like, do this or maybe don't do this?
Marcel Fairbairn (GearSource):I mean, it's such a fantastic but loaded question. You know, I've I've because really, I I have been operating a marketplace since 02/2002. I I'm a I'm a unique individual. I've been bruised and beaten up, and I've made every mistake possible, which is sometimes more important than just talking to the most successful marketplace owner in the world. I've survived twenty two years, which, you know, tell me another marketplace outside of eBay and Amazon who have done that.
Marcel Fairbairn (GearSource):I can't think of one. But, so, you know, first and foremost is is whatever it is that you're going to be a marketplace for, whatever that product is, do research, and make sure that there is a market. Make sure that there is a supply side, and that there is demand for it, because I'll tell you, I get invited a lot to these like dinners or talks or or, you know, these groups with marketplace startups, and they'll get on a call with me or even in person at a cocktail reception or something, and they'll say, you know, here's what my marketplace is, and they're very passionate and very excited, and I haven't got the heart usually to tell them that is a terrible business idea, that's just not gonna work. And the reason I know that it's not gonna work is my AOV, my average order is around $20,000. It's a hard business with a $20,000 AOV.
Marcel Fairbairn (GearSource):I can't imagine what it's like when your AOV's $3. And a lot of people, companies, startups are starting marketplaces based on sub $100 AOV, and you have to be so efficient. And generally, efficiency, I find, comes with scale. You know, it's hard to be really efficient when you have two or three employees, and you have all of those expenses and things. So, the first thing I would say is really vet the market.
Marcel Fairbairn (GearSource):Make sure that there is a market. Make sure that there are there's a need for the product that you're creating, just like any other business. And I know that's an incredibly obvious and and silly answer, but I believe it's an underutilized, muscle, is is to really vet the need. And and then from there, you know, just do it on the smallest budget you can possibly do. You know, go out and build a business where it's got you as the only employee to begin with, and today it's so easy to do that.
Marcel Fairbairn (GearSource):Twenty two years ago it wasn't. Today, you can use AI. You have online everything. Like, I didn't even have QuickBooks online in the beginning. I had it on disks because it didn't exist online yet.
Marcel Fairbairn (GearSource):So, you know, today, between AI and between all of the different online tools and and inexpensive applications and stuff, it's so easy to be, you know, a one person organization today and build a marketplace that gets you at least to a point of having revenue. And then from there, just be very conservative with your your growth of expenses, you know, be aggressive on your growth of of, revenue, but very conservative on on growing expenses, and that's not what I see in most marketplaces. I see they raise a million dollars, they go out and spend 2,000,000, and then they wonder why they're bankrupt, and and it's it's just, you know, a marketplace is a is a tough business to to succeed in, but it's a great one when when you get it to go and you've got network effects and, you know, that hamster wheel running and and everything, it's an unbelievable business. It's fun to wake up on Monday morning with orders Mhmm. That have taken care of themselves over the weekend, you know, you're like, wow, that was fun.
Marcel Fairbairn (GearSource):That's great. Had a $200,000 weekend and all I did was play golf. So I don't play golf, but Yeah.
Sjoerd Handgraaf (Sharetribe):I get it. I get it. Thanks, Marcel. Let's let's end on that. I think that's fantastic advice.
Sjoerd Handgraaf (Sharetribe):I think some of the best advice we can't we, you know, we can't repeat enough. So more than welcome. I wanna thank you a lot for your time. No. Thank you.
Sjoerd Handgraaf (Sharetribe):For trusting us with your business, and all the best in GearSource.
Marcel Fairbairn (GearSource):You so much. Thanks.
Sjoerd Handgraaf (Sharetribe):Thank you for listening and watching. If you enjoyed this episode, you can subscribe to ShareTrack founder stories on YouTube, Apple Podcasts, Spotify, or wherever you get your podcasts. Also, please consider leaving us a rating or review as that really helps other listeners and viewers find the podcast. And, of course, if you got inspired to bring your own marketplace idea to life, go visit www.sharedrive.com. It's the fastest way to start an online marketplace business.