Jeff Jordan - Building & Investing in Marketplaces

**Patrick O'Shaughnessy** (0:00)
This episode of Invest Like the Best is sponsored by Canalyst. Canalyst is the leading destination for public company data and analysis. Founded by a former buy side analyst who encountered friction sourcing, building and updating models, Canalyst is now used by over 400 institutions, including the largest money managers globally, and by a number of guests on the show. With detailed company specific models and data on virtually every public company, Canalyst clients are able to ramp up faster, update models instantly, and incorporate the highest quality fundamental data into any workflow. If you're a professional equity investor and haven't talked to Canalyst recently, you should give them a shout. Learn more and try Canalyst for yourself at canalist.com/patrick. That's canalyst.com/patrick. Stay tuned after the episode for my conversation with Canalyst customer Giuseppe Coco of LK Advisors. We talk about how Giuseppe has built Canalyst into his process as an international investor and much more. This episode is brought to you by lemon.io.
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Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best.
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**SPEAKER_2** (1:48)
Patrick O'Shaughnessy is the CEO of O'Shaughnessy Asset Management. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of O'Shaughnessy Asset Management. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.
Clients of O'Shaughnessy Asset Management may maintain positions in the securities discussed in this podcast.

**Patrick O'Shaughnessy** (2:12)
My guest today is Jeff Jordan, General Partner at Andreessen Horowitz. Jeff has one of the most interesting set of experiences of the guests that I've had on the show. As an operator, he has been the General Manager of ebay.com, President of PayPal and CEO of OpenTable. As an investor, he was one of the first General Partners in Andreessen Horowitz and sits on the board of Airbnb, Instacart, Pinterest and other notable firms.
Given his vast experience, he is the firm's go-to expert on all things marketplaces, which is the common thread in our conversation. Please enjoy this great discussion with Jeff Jordan.
Jeff, I really struggled as I was reviewing our research before our call today on where the hell to start with you. We've got such a wealth of stuff to cover. I think marketplaces is such a common theme through your career that it would be a fun place to start, both because you've got so much operating and investing experience in this area. The place that I've chosen as an on-ramp is your notion of perfect competition. I think it's a really interesting idea that I'd love you to explain to us as an excuse to talk about all facets of marketplaces, building and investing.

**Jeff Jordan** (3:14)
I got my first taste of marketplaces at eBay. Web one, if you wanna call it that. Almost all of the best business models ended up being marketplace type models. Taobao and Alibaba, China, you have Rakuten in Japan, Bacardi Libre in South America. Now, Amazon is largely a marketplace. At that point, it was brand new. There was no playbook. Early at eBay, I got there in 99, you're sitting there like, okay, what do we do? So the model that worked best in trying to figure out how to grow eBay was basically microeconomics. It is a perfect, at least it was a perfect economy where it was self-contained.
And all of the things in economic theory of microeconomics were playing out on eBay. And so we made pricing decisions based on that, supply acquisition decisions. You just watch, it would work as predicted. I mean, it was fascinating. We started getting tons of requests from academia, including by the way, the current Dean of the Stanford Business School, I subsequently learned, to get the data to test their theories.
Fascinating little machine.
My right-hand guy, Michael Deering of Harrison Metal, he had the same model. And so we just sit there geeking out on what happens when kind of thing. It was really fun.

**Patrick O'Shaughnessy** (4:29)