My First MillionWhatnot founder: This is the future of e-commerce
My First Million
A $20 billion company from scratch 0:00
Whatnot's founder, Sean, built a company now worth $20 billion, more than the combined market value of Wendy's, Under Armour, Hertz, Harley-Davidson, and American Airlines. He grew up working in a deli and nearly failed out of high school. Despite the scale of what he has built, he says he tries not to focus on the valuation, because doing so risks complacency. Instead he focuses on the problem directly ahead and takes it one step at a time, noting that the company is only six and a half years old and still has a lot of work left to do.
A missed investment and selling crabs online 1:00
One of the interviewers admits he passed on investing early because Sean never followed up after a promising call, a decision he now regrets. Whatnot today is a livestream marketplace where people sell almost anything. It started with collectibles like Funko Pop dolls and trading card packs, but has expanded wildly. As a live example, one host bought a live crab from a seller called I Love Crabs, who has sold 3,300 crab packs at $34 each, earning over $100,000 just from crabs on the platform.
From a Tokyo bar to a failed delivery idea 4:00
The company's origin traces to Sean and co-founder Logan drinking in a bar in Tokyo, frustrated with their jobs, deciding to start a marketplace business and buying around 50 domains on the spot. Their first concept was a "better, full-service Craigslist," which Sean now calls a terrible idea because used goods carry almost no margin. After quitting his job in fall 2019, Logan began building the product while Sean called delivery-company executives, including one from Bob's Discount Furniture, to price out shipping. After just two calls, he realized delivery costs would wipe out any margin on used goods, killing that version of the idea.
Bootstrapping with $200,000 and equity deals 8:32
At the time, the team was three and a half people, funded with roughly $100,000 to $200,000 of Sean's own savings, spent check by check before any outside funding. Their first engineer was based in Brazil, hired cheaply but given strong equity, and their designer worked purely for equity in exchange for all branding and design work. While Logan's team kept building the underlying payment and order systems, Sean researched other broken marketplaces and kept returning to eBay, where he had once sold Pokémon cards. Using a data tool to track eBay sales by category, he saw collectibles growing fast, with more Funko Pops sold than comic books, and chose Funko Pops as the starting niche.
Betting on customers over grand visions 13:00
Sean describes Whatnot as a customer-driven company rather than a vision-driven one, arguing that founder "vision" stories are often oversold compared to their real substance. Investors were initially wary of a Funko Pop-focused company, viewing the market as too small, but Sean points out that eBay itself began with a single broken laser pointer sale before later mythologizing a Pez dispenser story for PR purposes. He compares this to PayPal, which started as a narrow tool for eBay sellers despite Elon Musk's much broader vision for it, arguing that nearly every successful consumer company begins in a small niche before expanding.
Becoming the first seller and rigging discovery 19:00
Four to five months into building, the site already listed sellers across categories like sports and Star Wars, reaching into the hundreds or low thousands of sellers by March 2020. To solve the classic chicken-and-egg marketplace problem, Whatnot itself became the first seller, authenticating and reselling Funko Pops sourced through a team in Brazil, guided by a custom pricing algorithm built from scraped sales data and liquidity thresholds. Growth came through partnering with Funko Pop YouTube influencers and building a viral giveaway mechanic, where entrants earned extra raffle tickets for sharing referral links, letting Whatnot effectively take over Funko Pop communities on Reddit and Facebook.
Unconventional growth tactics 24:31
The conversation opens with a story about a musician who used a mysterious fraternity profile-picture trick to launch his career, which leads into a broader point about growth hacking. The Whatnot founder explains that copying obvious marketing paths, like heavy paid advertising, usually fails for a new company because it lacks the resources to compete there. In the early days, Whatnot spent almost nothing on paid ads, since that channel would never have worked for them, though today they spend heavily on it. The lesson he draws is that early on you need to find unique advantages that bigger, established players cannot easily copy.
The first Grails giveaway 25:30
He recalls that the very first Grails giveaway, offering a five hundred dollar item, was a flop, drawing only 104 entries from maybe thirty or forty accounts and zero purchases, all funded out of his own dwindling bank account. Rather than giving up, they used the accounts gathered to push notifications for the next giveaway, which grew entries to around 250, suggesting a repeatable, compounding pattern. This early phase was entirely about building a buyer base, since with no demand yet, no new seller could hope to make a sale or stick around.
Opening up to sellers 27:01
The app launched in December 2019, but Whatnot did not open selling to its first outside seller until late February, once enough buyer demand existed. To speed this along, they used a hack similar to what Airbnb and Craigslist-era marketplaces did: whenever a new seller joined, they would cross-list that seller's items on other marketplaces using Whatnot's own account, borrowing audience from elsewhere. Metrics were too sparse at the time to know precisely what retained sellers, so the strategy was simply to get new sellers as many early sales as possible.
From thirty sales to Y Combinator 28:30
The first month, December 2019, produced roughly thirty total sales, several of which came from bargain hunters exploiting mispriced Funko Pop listings caused by poor liquidity in their pricing algorithm. Live selling, the feature that would define the business, did not launch until July 2020. Before that, in the middle of COVID, the founders pitched their Funko Pop marketplace to investors who largely dismissed it, yet Y Combinator backed them anyway, valuing their strong technical backgrounds and their habit of actually executing on what they said they would do, including building and shipping a working product in about a week just for the YC interview.
Explosive growth curve 33:02
Coming out of YC they raised about two hundred fifty thousand dollars and grew to roughly six and a half employees before their seed round. By March they had done only twenty to twenty five thousand dollars in total sales, but after launching live selling that September, growth hit over one hundred percent month over month, reaching two hundred fifty to three hundred thousand dollars in gross sales that month alone. By the end of 2020 the company had eighteen employees and 2.3 million dollars in total sales; the next year it closed at 163 million dollars in sales with about one hundred employees, and the year after that reached one billion dollars in sales, driven by sellers finding Whatnot a bigger channel than any other platform, including physical stores that shut down as sellers moved fully online during COVID.
Learning to lead without losing yourself 36:30
Asked what he had to change personally to lead a company now employing about 1400 people, he says the biggest mistake early on was trying to seem too corporate, hiring executives from famous companies who sounded credible but often could not explain their reasoning in specific detail. His real adjustment was learning to build an operating system and rhythm for running the company at scale while staying maniacally focused on problems rather than letting outsiders dictate the path. He also had to soften blunt early habits, since blunt feedback that worked among a tiny founding team could now upset employees who barely know him personally, though he insists this is about flexing style, not becoming dishonest or fake.
Digging past AB test illusions 42:02
He describes his core skill as relentlessly seeking the root truth behind any metric, using an example where a discovery system change seemed fine in an AB test but actually shrank certain sellers' businesses once elasticity curves, meaning how a seller's business grows or shrinks as their visibility in the feed increases or decreases, were plotted over longer time horizons. He explains that AB tests are notoriously unreliable on network systems like marketplaces because changing what one user sees changes seller behavior too, contaminating both sides of the test. His method is to keep asking simple, almost second-grade-level questions like what happened and how do we know, refusing to accept jargon-heavy explanations until the underlying truth is clear, a habit he compares to a similar approach he admired at Twitch and now insists his own executives adopt.
Handling Disagreement Without Cruelty 49:31
Sam talks about the difference between being direct and being unkind, admitting he dislikes the buzzwords first principles and contrarian because the people who use them often deliver the message badly. His own approach comes from imagining himself in the other person's shoes and asking what would let that person do their best work. He traces this back to a moment at Facebook, sitting through a product review where the person running it yelled at everyone despite the team having worked past midnight for weeks on an impossible, overly politicized project. That experience convinced him that being mean or combative never gets better work out of people, and it was part of why he eventually left.
Reflecting on Wealth and Staying Grounded 52:01
Asked about being one of the few people under 40 worth billions of dollars, Sam says it feels good to take care of his family properly and to see what has been built in six and a half years, with millions of people running businesses on Whatnot and 1,400 employees on the team. He allows himself brief moments of reflection, maybe five minutes at a time, but resists complacency because he still feels high accountability to his employees and to investors who have put in a billion and a half dollars. He also shares his view that anyone who talks about moving fast is usually moving slow, and that real speed leaves no time for discussing it.
Odd Trends and the Future of Live Commerce 54:01
He runs through some of the stranger things sold on Whatnot, including Neato and squishy toys, crab meat, and bars of gold and silver sold directly by mints and coin shops, cutting out middlemen. Zooming out, he predicts live commerce will make up over 30 percent of all e-commerce within a decade, compared to single-digit percentages today, pointing to China's roughly 40 percent figure as the comparable model. The top sellers on Whatnot already do hundreds of millions in revenue, with one operation growing from three or four people into a 150 to 200 person business built entirely on the platform. He expects related industries to grow alongside it, including wholesale marketplaces supplying sellers and multi-channel networks that help run live shopping operations. He closes by mentioning his own low-key hobbies, collecting original type one photographs and playing hockey as a Canadian.
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