Riley Newman
5 min readOct 6, 2020


When founders pitch us we often ask them to walk us through a transaction their platform is meant to host. Who are the people on either side? What motivates them, and why is this better than the status quo?

It’s interesting how often this line of questioning comes as a surprise. While intuition about early adopters is common, many over-index on the role of software as a solution.

Software can enable the solution, certainly. But the true product of a marketplace is the people on either side of the transaction. When you use Airbnb to travel, you don’t remember the seamless booking process; you remember the people you stayed with.

Understanding the answers to the questions posed above is therefore critical for generating adoption. Not only do you need to know how to serve either side of the market; you need to know how the two sides match each other’s needs symmetrically.

In this post we’ll share how Airbnb arrived at understanding its community of early users, and how the next generation of founders can improve upon the Airbnb experience in order to get moving in the right direction earlier. We cannot stress enough how important that is — the time goes by quickly!

Airbnb & Snow White

When Brian, Nate, and Joe founded Airbnb it took a while to answer these questions. For months they iterated on the concept, testing different approaches and trying to get investors interested. After a lot of frustration and rejection, they managed to get into Y Combinator, where Paul Graham advised them to go meet the handful of people using the product and hear firsthand what they liked and didn't.

Heeding his advice, they began a weekly cadence of flying to New York to meet early guests and hosts, and used their feedback to shape a combination of product flows, incentive structures, and platform policies. It was a turning point for early growth, and laid the foundation for a culture of curiosity about, and empathy for, the community Airbnb was meant to support.

Years later, Brian kicked off the Snow White project to reaffirm this culture, and expose the gaps the product needed to help fill. The result was two storylines, 15 frames each. They’re still mounted on a wall in the office today.

The design polish of the Snow White frames is a high bar for founders just getting started, but the project offers a couple concepts worth considering. Defining nomenclature for supply and demand aligned the team (investors included) around who we were building for. Establishing the milestones each side needed to flow through for the platform to fulfill its promise highlighted opportunities for improvement. And continuously promoting it internally inspired the team to step outside the bounds of their day to day work. It reinforced a sense for our mission, inspiring people as they came into work each day.

Next steps: a marketplace map

In our work with the next generation of founders, we’ve been able to help founders implement the most useful aspects of Snow White and take it a step further.

A relatively simple but powerful evolution is to re-think snow white as a map of the marketplace. Imagine the two storylines above, drawn together at the relevant points of intersection. Where do the experiences overlap and deviate?

Through this lens, user experiences become more intuitively linked to business metrics, product flows, and organizational design.

Business metrics: A map like this illustrates the links between a broad, often confusing set of metrics. The complexity of a marketplace has a tendency to result in an abundance of reports. Without a framework like this it’s almost impossible to understand the relationships between the different sides of the marketplace such as demand growth and supply retention. A huge step toward a culture of being data driven involves educating the team how metrics link together to measure the health of the marketplace overall.

Product flows: This also serves as a blueprint of the platform. There are many more features and pages that need to be tracked than the 10 milestones represented here. But it’s easy to get overwhelmed by product diagrams that lie too in the weeds to understand how the system is meant to work more generally. This map can be used to see the breadth of the product as a whole, and where to zoom in to understand specific flows linking conversion rates from one milestone to the next.

Organizational design: Finally, this can help with communication, alignment, and resource prioritization across the team. Showing every member of the team how their work fits into the bigger picture is not only rewarding, it helps them understand the relationships between their work and that of others. And if another team needs the next engineer you’re desperate for, this makes it a little easier to understand why.

Choosing a north star

With the diagram drawn, identify the point that best represents fulfillment of the platform’s promise. This is the business’ north star, what you’ll want to optimize for in setting goals, and can be used as a common denominator for decisions about where to prioritize resources. Early on, choosing what not to do is often harder than coming up with creative ideas for what to improve. Given that time and resources are limited, prioritizing your north star will get you further along in your journey, rather than trying to do everything perfectly.

Usually the north star is tied to the experience the transaction is meant to yield. Each case in which an experience takes place, the platform has succeeded in delivering on its promise.

It can be tempting to choose a point further up the funnel, for example the moment a trip is booked. For businesses with a significant time delay between a transaction initiating and closing, choosing the point of initiation as your north star can be attractive in that it’s more realtime. But this is a trap that will lead you to overlook the things that can go wrong before the transaction closes. It can also affect the business’ cash flows, as revenue is usually recognized upon completion of the experience.

Alternatively it can be tempting to choose a point following completion of the experience, for example retention or reviews. The advantage here is you can condition success on experiences that go well. But time horizons are again an issue — you may wind up waiting too long to see if someone completes a review or returns to use the service again. Tracking quality is critical, but in general can be controlled for as a backstop metric for growth — i.e. generate more trips, but only as long as our 5-star review rate remains above 80%.

Once you have the experience mapped, the next step is to chart a course through the seed stage.



Riley Newman

GP at Wave Capital, formerly head of data science at Airbnb