Whatnot’s CEO on the rise of live shopping

While digital live shopping has been popular for years in Asia, the phenomenon has only recently begun to take off in the U.S., thanks in large part to the rise of retail disruptor Whatnot. The platform’s cofounder and CEO, Grant LaFontaine, shares how his team has managed to evoke the feel of in-person shopping inside an online experience, and how Whatnot’s breakthrough is influencing other retailers and brands. LaFontaine also digs into the startup’s response to deep-pocketed rivals like eBay, and why he believes the viral Labubu trend is here to stay.

This is an abridged transcript of an interview from Rapid Response, hosted by former Fast Company editor-in-chief Robert Safian. From the team behind the Masters of Scale podcast, Rapid Response features candid conversations with today’s top business leaders navigating real-time challenges. Subscribe to Rapid Response wherever you get your podcasts to ensure you never miss an episode.

Whatnot has seen some real dramatic growth this year in the top 15 among free apps in the App Store, and No. 2 in shopping apps. For listeners who haven’t spent time on Whatnot or taken part in live shopping, can you explain a little bit about what the experience is like? People often make the comparison to a digital QVC.

Yeah, I started thinking about it a little bit differently. To me, live shopping is the best in-store shopping experience, but online. So, a lot of the people who are on Whatnot have either had their own brick-and-mortar shops or they’re streaming all the time. It’s like welcoming you into their store. So, you tap into their livestream. You’ll see a bunch of the inventory they have. You’ll see people in there. You can chat with the person, ask them questions about the product. I sort of view it as the shift of experiential commerce—not just in a brick-and-mortar world, but bringing it online.

Part of the Whatnot experience is … it’s almost like it’s entertainment on your phone too, right? I mean, the best sellers have to be engaging hosts. Do you train new sellers about how to be effective in live selling?

You don’t have to be the world’s best entertainer to put on a good show, because what people value can be really different. The shopping experience itself is entertaining. The people that you can talk to are entertaining. It is a format that I think any seller or anyone who has a business can get advantage from. You’ll see a lot of the same people. You can chat with them. It’s like, maybe you go to your local bakery or your local pub, and you sort of know the people who frequent it. And you know the host, and you have a relationship with them. It even carries over to extremes. There’s a trend on Whatnot called Bless the Chat, and people will buy gifts and giveaways to have people who are just hanging out in the shows win. And it’s completely funded by the audience. And if you go into any of the big shows, it’s actually very, very common.

Your team told me that while you use AI in the back-end for efficiency and other things, that you only consider deeper AI in the customer experience if it really solves customer issues. As a CEO today, do you feel pressure to be using AI maybe more than you need to be? 

Yeah, I think absolutely. I think one of the most inherent human characteristics is that there’s always some pressure by looking at other people and feeling like you need to do what they’re doing. If you’re in tech these days, you probably can’t go more than a one-hour-long period of time without hearing about something in AI. And so I think it makes you constantly question whether you’re doing the right things. Now, the truth with every new technology is, it either solves a problem or it doesn’t. And if it doesn’t solve a problem, no one’s going to use it, so it doesn’t matter. So I think, despite all of the noise, we try and stay relatively grounded. We’re not doing AI for AI’s sake. 

I’m curious whether there are any trends that you see on the platform about where collectibles are going. Are there any predictions about what might be hot next?

I think people have always viewed collectibles as niche markets, but what we’re seeing is that those markets are getting much bigger. Historically, when you look at collectibles markets and you think about the Beanie Baby that had this meteoric rise and meteoric fall. That’s what happens in collectibles. If you look across our collectibles business, we’re 6 years old now, and I don’t think it’s ever grown under 100% a year. I think in a world where everything’s sort of mass-produced, very digital, I think having unique things and being able to resonate with folks on those things is just providing more value. And so I think these markets are going to be more enduring. The Beanie Baby of the day is what they call the Labubu. My prediction is that that market keeps growing for a really long time.

The Labubu is not going the way of the Beanie Baby?

I think people want more unique experiences today. I think social media amplifies them. And so I think the Labubu is going to stay strong.

EBay launched a live shopping feature two or three years ago, right? Did you look at that as, like, “Oh, here’s a competitive threat.” Or as a validation of your model? Or maybe a little bit of both?

The way I look at a lot of these things is, I try and understand the historical context on incumbents versus startups. As a business, running a business that’s growing very fast, there are so many different things that you have to worry about at any given point in time. And so if you’re not really clear on what matters, you can get really distracted. And if you look at consumer markets in the U.S. over, I don’t know, 20, 30 years, it is pretty rare the incumbent wins when you have a fast-growing consumer company, as long as you execute really well.

Have I, at times, worried about competitors? Yeah, absolutely. It’s a very human emotion. Like, “Oh, here’s this company that has a gajillion dollars and they’re coming at something that we’ve spent a huge quantity of our life building.” But ultimately, I tell this to the team now, and it’s true: Every second I’ve spent worrying about a competitor has been a second wasted. And so I think now we just try and stay really, really, really focused on delivering. We are the largest in the market by a significant quantity, and we don’t want to get complacent. Sometimes the competition is doing things better than you. And if they are and it’s an area where you are competing for customers, you’d better deliver better than them. Or at least as good as them—otherwise there are risks.

Are there things that you’ve learned about today’s consumer that traditional retailers or e-commerce players are missing?

In many ways, Whatnot is like the polar opposite of the e-commerce players of the past 30 years. It’s not an efficient form of purchasing. You’re going to sit around and watch things for hours. I think the fundamental truth is that shopping’s always been an activity that people have enjoyed doing. A lot of shopping is experiential. I used to hang out with my friends in the mall. People are craving an experiential online e-commerce experience. That’s definitely going to be a thing that over the next five or 10 years, every brand, every retailer is going to end up investing in.

I read that you and the Whatnot team have this feeling of being perennially underestimated. I’m sure some of that is motivating. Is there a downside? Or would the downside be like losing the underdog feeling?

I think we like to be underestimated. The first time we tried to raise money … I have a spreadsheet with all of the investors who I talked to, and it got to 100 no’s, and I stopped keeping track of it. And I still have the spreadsheet and all of the reasons why. So I’m not going to lie, that’s motivating. At least for me, there’s nothing more motivating than someone saying, “Oh, you can’t do the thing.” I’ll always carry a little bit of chip. And I think a little bit of chip is helpful because it keeps you going, keeps you motivated. Now, it’s helpful to remain underestimated so that we’re not distracted and can just build. And then when the thing’s great, it will speak for itself.