Video · 2026-08-19 · 42m · 12 moments

Inside Whatnot's Bet on Live Shopping | The a16z Show

✦ AI generated

timeline · colored by role

Fact◆

Live commerce is 30-40% of all commerce in China but single digits in the US because the Western experience is fundamentally broken.

Grant LaFontaine highlights the massive gap in live commerce adoption between China (30-40% of commerce) and the US (single digits), attributing it to a broken Western experience where transactions, shipping, payments, and customer experience weren't properly integrated.

transcript

Grant LaFontaine: 30 to 40% of all commerce is live commerce in China. >> What is it in the US today? >> Single digits really. The experience is really broken. Transactions weren't integrated well. Shipping wasn't payments, discovery, CX, and we just thought we could build a better one of those.

Claim◆

Users don't care about market categories or formats — they care about whether the experience provides value and is fun, which is what drives engagement.

Whatnot's CEO argues that obsessing over market definitions distracts from building great user experiences. Users return because the platform is entertaining, not because of the underlying market mechanics.

transcript

Grant LaFontaine: Users don't give a about the market. They care about whether they're going to enjoy the thing. It provides value. There's this counterintuitive thing which is if you try and build a market it oftentimes distracts from like are you building a really great user experience. Because again like no one's the consumer is not making a going like oh this is a live shopping market and you know I can transact all these things in this market and they're going like well no what are you going to provide for me? What's the value?

Claim◆

Users don't care about the market -- they care about whether the experience provides value and enjoyment.

Grant explains the counterintuitive insight that obsessing over building a 'market' can distract from what matters: creating a great user experience. Consumers don't think about market mechanics -- they simply want value and enjoyment from the platform.

transcript

Grant LaFontaine: users don't give a about the market. >> Yeah. >> They don't care about the market at all. They care about whether they're going to enjoy the thing. It provides value. >> Yeah. And so there there's this um counterintuitive thing which is if you built try and build a market it oftentimes distracts from like are you building a really great user experience. Yeah. Because again like no one's the consumer is not making a going like oh this is a live shopping market and you know I can transact all these things in this market and they're going like well no what are what are you going to provide for me? What's the value?

gives example · 1

Definition

Whatnot is analogous to visiting a shopping mall -- users browse for discovery and entertainment rather than searching for specific items.

Grant compares Whatnot to mall shopping: users have a general sense of wanting something but not exactly what, so they browse, discover, and get entertained along the way. Unlike traditional e-commerce where you must know exactly what you want, Whatnot excels at experiential discovery.

transcript

Grant LaFontaine: whatnot is sort of like analogous to visiting a store. >> Yeah. >> Um which is I don't know if I go to the mall or I go to set of retail shops. >> I'm sort of like I I kind of know I want a thing but I don't know exactly what that thing is. I'm going to go walk in that shop. I'm going to go browse around. And so >> I don't what have I what have I bought recent? I bought some some new shoes. And so I I went on to go get some new sneakers. I was like, "Okay, I need some sneakers. I'm going to type in the website and I'm going to go like I spent 30 minutes browsing. Didn't know what I wanted. I came away on the other side. And that's sort of the whatnot journey. Whereas if you look at a lot of the e-commerce um companies that have been built in the past, you know, prior to us, you sort of know exactly what you want. It's not really great for discovery. It's not really great for experiential or having fun or being entertained. Uh so I think that's that's sort of the the analog with whatnot.

explains mechanism · 1provides context · 1

Prediction◆

Live commerce is over a third of all commerce in Asia but single digits in the US, and this gap will inevitably close because live is a richer, more efficient way to sell.

The gap between Asian live commerce penetration (30-40%) and US (single digits) is enormous but closing. Live commerce offers sellers zero-cost setup with a global audience versus expensive brick-and-mortar with limited reach.

transcript

Grant LaFontaine: 30 to 40% of all commerce is live commerce in China. What is it in the US today? Single digits. I think it's clearly going to close. It's just a richer way in which to sell and build a business. If you're a fashion brand or store, you could go and set up a brick-and-mortar shop on Fifth Avenue that cost you millions of dollars and you're restricted to a set of people who come to your shop at 9 to 5. On Whatnot, you can set up for $0 and you can have an entirely global audience that is unbounded.

Claim

Whatnot is fundamentally different from eBay because the live format attracts a diverse seller base of small businesses and brands that would never list on traditional marketplaces.

While Whatnot started in collectibles like eBay, the live format attracts small businesses and brands with brick-and-mortar shops or Shopify stores — sellers who would never use eBay. This makes the seller base inherently more diverse.

transcript

Grant LaFontaine: People will peg us to eBay because we sort of got started in collectibles and that's where eBay got started. But actually the live format is just very very different. It means that a whole swath of different types of sellers can use the product. Anywhere from when eBay got started, a lot of it was like smaller resellers. If you look at whatnot today, it's fundamentally like small business and then we're getting into brands. A lot of those brands and small businesses would typically not be on eBay.

Mechanism

Live commerce is demand-expanding rather than demand-capturing -- it grows the total market by enabling discovery of things people didn't know they wanted.

Grant argues that live commerce doesn't just capture existing demand more efficiently -- it actually expands the market by enabling discovery of products people didn't know they wanted. This means the market could grow far beyond current projections, similar to how department stores and malls originally expanded demand.

transcript

Grant LaFontaine: And then the thing with live is it's it's um demand expansionary because um you go in and discover new things you didn't know that you would be interested in. >> Yes. >> Uh and so if you look at e-commerce today, it's so you have to know exactly what you're looking for. So all it's really done is take a bunch of offline sales and bring them online in a more efficient way. But you still got to know exactly what you want. And as like live commerce >> uh proliferates, it's just going to expand that market. So, not only could it be 30 or 40% of that market, um that market is going to get a lot bigger. >> Yeah. It's sort of like it would be more akin to not so much like e-commerce, but more like the inception of department stores or shopping malls. Yes. >> Right. Which is like actually expanded the the demand characteristics of the market.

extends · 1supports · 3

Claim

Live commerce is demand-expansive rather than demand-efficient — it grows the overall market by helping people discover things they didn't know they wanted, much like department stores and shopping malls originally did.

Traditional e-commerce just moved existing demand online more efficiently — you still have to know exactly what you want. Live commerce expands the market by facilitating discovery, potentially making it 30-40% of a much larger total market.

transcript

Grant LaFontaine: The live format is demand expansionary because you go in and discover new things you didn't know that you would be interested in. If you look at e-commerce today, you have to know exactly what you're looking for. All it's really done is take a bunch of offline sales and bring them online in a more efficient way. As live commerce proliferates, it's just going to expand that market. Not only could it be 30 or 40% of that market, that market is going to get a lot bigger.

supports · 1

Claim

Whatnot is generating billions for small businesses — from one-person operations to a couple hundred employees — empowering them in a way that reverses the trend of e-commerce obscuring sellers.

Whatnot's model is the polar opposite of platforms that obscure sellers. Sellers get their own store, brand, and customer relationships. The platform has generated billions for small businesses, with top sellers doing $100M+ revenue at 20-40% EBITDA margins.

transcript

Grant LaFontaine: Whatnot is fundamentally empowering small business. If you look at what's happened in e-commerce over the past 20 or 30 years, it got so efficient and one of the ways to make it so efficient is to obscure who you're buying from and obscure the ability for people to build brands and businesses around it. Whatnot is sort of the polar opposite. If you're on whatnot, you're going to have your store, you're going to have your brand, you're going to have your customers, they're going to come back to you. We're generating billions and billions of dollars for small businesses. The biggest businesses on whatnot are probably doing upwards of $100 million in revenue with very strong EBITDA margins, 20, 30, 40 plus percent.

supports · 1

Claim

Whatnot is fundamentally empowering small businesses by giving them a brand, customers, and repeat business -- the opposite of e-commerce trends that obscured seller identity.

Grant explains that Whatnot empowers small businesses by letting them build brands, own customer relationships, and get repeat business -- the polar opposite of e-commerce trends that made sellers interchangeable and obscured who you're buying from. The platform generates billions for businesses ranging from 1-2 person operations to a couple hundred employees.

transcript

Grant LaFontaine: whatnot is sort of the polar opposite. if you're on whatnot, you're going to have your store, you're going to have your brand, you're going to have your customers, they're going to come back to you. And so, you know, I think that's one of the one of the best bits of the platform is, you know, we're generating billions and billions and billions of dollars for small businesses. And these are anywhere from, you know, one and two person operations all the way up to maybe a couple hundred folks at the high end.

supports · 1

Mechanism◆

Trust and safety at scale requires 40% of employees, functioning as the 'police force and legal system' of the platform -- equivalent to policing two New York Cities.

Grant describes the massive investment in trust and safety (40% of employees), comparing it to the police and legal system of a city with tens of millions of users. They use LLMs and rules engines processing billions of data points to detect harassment, late shipping, and high refund rates, automatically taking action based on seller history.

transcript

Grant LaFontaine: trust and safety particular on whatnot is about 40% of employees. Yeah. So, it's au it's a huge huge investment from us because it's it's a challenging one and you don't want to put your >> credit card in a place you you don't trust. You certainly don't want to buy fresh fish from a place you don't trust, >> right? >> Um and and so so so those you know I think lot of measurement, lot of user feedback um and then a big just people investment to get the thing done is is sort of what drives it. Um, and then you know the problems are are pretty diverse and you have to make sure you're building the right set of things for it. So as an example, [clears throat] we have a a system in the background um which is called our our rules engine and it um takes in billions of data points at this point in sub 1 second to be able to take down or find any range of bad behavior on the platform. So if you harass someone in a live stream, the LLM will detect it. It will get plugged into the our action rules engine will look at the history of the seller and based upon other signals programmatically take them down, suspend them, ban them, warn them.

supports · 1

Mechanism

Trust and safety requires about 40% of Whatnot's employees because the platform is analogous to running the police force and legal system for a city the size of two New Yorks.

Whatnot treats trust and safety as its highest-priority investment, dedicating roughly 40% of headcount to it. An automated rules engine processes billions of data points in under a second to detect harassment, late shipping, and other bad behavior — but human oversight remains essential.

transcript

Grant LaFontaine: Trust and safety on whatnot is about 40% of employees. The trust and safety team is basically the police force and the legal system of whatnot. You got to write your policies. You got to be people who enforce your policies. In a city that has 10, 20 million people, you're looking at a city the size of Tokyo — a couple New York cities. We have a rules engine in the background which takes in billions of data points at this point in sub 1 second to be able to take down or find any range of bad behavior on the platform.

supports · 1

Highlight slides

Live Commerce: China vs. US✦ from: Live commerce is 30-40% of all commerce in China but single digits in the US because the Western experience is fundamentally broken.What's Broken in the West✦ from: Live commerce is 30-40% of all commerce in China but single digits in the US because the Western experience is fundamentally broken.The Opportunity✦ from: Live commerce is 30-40% of all commerce in China but single digits in the US because the Western experience is fundamentally broken.Users Don't Care About Markets✦ from: Users don't care about market categories or formats — they care about whether the experience provides value and is fun, which is what drives engagement.Counterintuitive Truth for Builders✦ from: Users don't care about market categories or formats — they care about whether the experience provides value and is fun, which is what drives engagement.Users Don't Care About the Market✦ from: Users don't care about the market -- they care about whether the experience provides value and enjoyment.The Counterintuitive Trap✦ from: Users don't care about the market -- they care about whether the experience provides value and enjoyment.Live Commerce: Asia vs US Gap✦ from: Live commerce is over a third of all commerce in Asia but single digits in the US, and this gap will inevitably close because live is a richer, more efficient way to sell.Why Live Commerce Wins✦ from: Live commerce is over a third of all commerce in Asia but single digits in the US, and this gap will inevitably close because live is a richer, more efficient way to sell.Old Model vs New Model✦ from: Live commerce is over a third of all commerce in Asia but single digits in the US, and this gap will inevitably close because live is a richer, more efficient way to sell.Trust & Safety as a Core Platform Function✦ from: Trust and safety at scale requires 40% of employees, functioning as the 'police force and legal system' of the platform -- equivalent to policing two New York Cities.Scale of the Challenge✦ from: Trust and safety at scale requires 40% of employees, functioning as the 'police force and legal system' of the platform -- equivalent to policing two New York Cities.Automated Enforcement System✦ from: Trust and safety at scale requires 40% of employees, functioning as the 'police force and legal system' of the platform -- equivalent to policing two New York Cities.

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