Whatnot co-founders Grant LaFontaine and Logan Head shifted their business from an early marketplace concept to collectibles before introducing live shopping in 2020. The focused approach helped the company develop a marketplace model that expanded beyond its initial niche and later supported substantial sales growth and a multibillion-dollar valuation.
Key Takeaways
- Whatnot began with a broader marketplace concept before shifting its focus to collectibles
- Grant LaFontaine and Logan Head identified collectibles as a more focused market opportunity
- The company introduced live shopping in 2020 after building its marketplace around collectibles
- Whatnot used influencers and giveaways to build awareness and community around its marketplace
- The company later expanded significantly beyond its original collectibles focus
Whatnot Startup Growth Began With a Shift in Business Direction
Grant LaFontaine and Logan Head initially planned to build a full-service marketplace as an improved version of Craigslist. The founders soon concluded that the economics of that concept would not work and began testing other business ideas.
They eventually focused on smaller markets where they believed customer problems could be addressed more directly. Collectibles became one of the areas they continued to examine, including products such as Funko Pop figures.
LaFontaine said the collectibles shopping experience had changed little over a long period, giving the founders an opportunity to develop a different user experience. The decision gave Whatnot a specific category in which to test its marketplace rather than competing across a much larger market from the beginning.
The company’s early direction was shaped by a series of decisions rather than a single fixed business model. The founders moved away from the initial marketplace concept after determining that it was not economically viable and continued testing alternatives until they identified a more focused opportunity.
The collectibles market also gave the company a defined group of buyers and sellers around which it could build its marketplace. That focus became an early part of Whatnot’s startup growth strategy.
Founders Focused the Marketplace on Collectibles
Whatnot concentrated its initial marketplace efforts on collectibles, with Funko Pop figures among the products that attracted the founders’ attention. The company sought to improve the buying experience for collectors while establishing a focused marketplace.
The founders recognized that competing immediately in a mass market would require Whatnot to take on established businesses across a much wider range of products. The collectibles category instead provided a narrower market in which the company could develop its product, understand its users and build around a defined customer base.
That approach also gave Whatnot an identifiable community. Rather than trying to attract every type of online shopper, the company initially built around people already interested in collectibles.
Early traction provided measurable evidence that the narrower approach was working and gave the founders a foundation for the next phase of the business.
Live Shopping Became a New Growth Channel
Whatnot introduced live shopping in July 2020, adding a new format to its marketplace. The change became a major point in the company’s development and altered the way buyers and sellers interacted on the platform.
The live format allowed sellers to present products while interacting with buyers in real time. This differed from a conventional marketplace listing in which a product is displayed separately from the seller’s presentation.
The change also created another way for users to discover products. Instead of relying solely on searches or static listings, buyers could encounter products through live selling sessions.
LaFontaine said the business began to accelerate after the introduction of live shopping. One seller also told the founders that sales through Whatnot had surpassed the seller’s previous physical-store sales, prompting the seller to close the brick-and-mortar location.
The company’s sales figures increased during the same period. Whatnot reported roughly $25,000 in total sales when it exited Y Combinator. That figure rose to between $250,000 and $300,000 by September 2020 and reached $2.3 million for the full year.
The progression shows how a focused initial marketplace can create room for a startup to test new formats as customer activity grows.
Community Building Supported Marketplace Expansion
Whatnot’s early customer-acquisition strategy relied on relationships with influencers rather than simply copying the marketing approach of a larger established company.
The company partnered with influencers to introduce its marketplace to potential customers. It also used giveaways to attract attention and encourage participation among people interested in collectibles.
Those activities helped establish Whatnot within the collectibles community while the company was still operating in a relatively narrow category.
The community focus also connected buyers and sellers around specific interests. Collectibles provided a shared subject for the marketplace, while live shopping created a format for sellers to interact directly with that audience. This emphasis on community also aligns with broader approaches to human-centric growth, where loyalty, feedback and direct relationships can support long-term expansion.
The combination gave the company several ways to bring people onto the platform. Buyers could discover products through live sessions, while sellers could use the marketplace to reach customers interested in particular categories.
Rather than beginning with a broad marketplace and trying to attract users across unrelated product categories, Whatnot first established activity around a defined group before adding more categories.
Whatnot Expanded Beyond Its Original Niche
Expansion into additional categories broadened Whatnot’s marketplace beyond the collectibles segment that helped establish the company.
New categories added inventory and gave buyers more reasons to use the platform. The expansion also created opportunities for sellers outside the original collectibles community to participate.
The company’s development moved through several distinct stages: an initial marketplace concept, a focus on collectibles, the introduction of live shopping and expansion into additional categories.
Photo Credit: Unsplash.com
That sequence also changed LaFontaine’s responsibilities as the company grew. Rather than personally addressing individual problems across the business, he said his role increasingly involved building systems that allowed employees and clients to solve problems more quickly.
LaFontaine described the need for an operating rhythm that would help the company make decisions and execute at speed. The shift accompanied Whatnot’s move from an early-stage startup with a narrow product focus to a larger marketplace serving more categories.
Whatnot reached a $20 billion valuation following a $545 million Series G funding round announced in August. LaFontaine also said the platform was selling 20 items per second at its current scale.
The expansion did not replace the original marketplace model. Instead, Whatnot added categories and supply to a platform first developed around a specific community and product segment.
The company’s growth story reflects a sequence of strategic changes: abandoning an initial concept, concentrating on collectibles, adding live shopping and then expanding the marketplace into additional categories.
Frequently Asked Questions
What is Whatnot?
Whatnot is a live-shopping marketplace that allows buyers and sellers to interact through live sales. The company initially focused on collectibles before expanding into additional product categories.
Who founded Whatnot?
Whatnot was co-founded by Grant LaFontaine and Logan Head. The founders initially considered a broader marketplace concept before focusing on collectibles.
What was Whatnot’s original business idea?
LaFontaine and Head initially planned to build a full-service version of Craigslist. They abandoned that concept after determining that its economics would not work.
When did Whatnot introduce live shopping?
Whatnot introduced live shopping in July 2020. The company had already built its marketplace around collectibles before adding the live-shopping format.
How did Whatnot expand beyond collectibles?
Whatnot added product categories after establishing its marketplace around collectibles and live shopping. The expansion increased the range of buyers, sellers and products available on the platform.
