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# Start With Funko Pops, Build a $20 Billion Marketplace
- URL: https://www.signalful.com/start-with-funko-pops-build-a-20-billion-marketplace/
- Published: 2026-10-02T14:49:00.000Z
- Updated: 2026-10-09T19:40:16.000Z
- Description: Whatnot started with used Funko Pops while famous investors passed. It is now a $20 billion marketplace.
- Author: Signalful Editorial
- Tags: Builders, Whatnot, Grant LaFontaine, Marketplaces, PMF, #sf-0008, #yt-TAHAlGH_DK0, #Import 2026-10-06 15:50

*Grant LaFontaine, cofounder and CEO of Whatnot, interviewed by Shaan Puri and Sam Parr (My First Million)*

**Summary:** Grant LaFontaine built Whatnot into a $20 billion live shopping marketplace by starting with used Funko Pops, acting as the only seller until buyers showed up, and growing demand with referral raffles instead of paid ads. His core claim is that great consumer companies start in markets investors dismiss, and that popular business stories (the visionary founder, the big-company executive) fall apart under detailed questioning. Take him seriously and you pick a niche a 4-person team can win, stand in for one side of the marketplace yourself, and keep asking "how do you know?" until the answer is simple.

1. **The Funko Pop Wedge.** Every consumer success LaFontaine knows of started in a tiny market, and Whatnot started with Funko Pops. Well-known investors passed while the live auction product grew 100% month over month, because Funkos looked like a small market. His reasoning: a 4-person company can't create much value in a mass market, so it has to win a small group of users and then expand. eBay followed the same path; he says its first sale was a broken laser pointer bought by a collector of broken laser pointers.
2. **Data Plus Taste.** The founders picked the category from eBay sales data. They plotted sales for every collectibles category over time, saw all of them growing, and found more Funkos selling on eBay than comic books. The taste half was a belief that collectibles shopping hadn't changed materially in 20 years, while people their age with money were buying back childhood nostalgia. They couldn't define the social product yet, but they could "squint and imagine" a place to discover items and chat with people who share the hobby.
3. **Bias to Action.** Whatnot began as a "full service Craigslist," and LaFontaine killed it within 24 hours of calling delivery executives he found on LinkedIn. After 2 calls, the cost per delivery was clearly higher than the margin on cheap used goods. The engineers kept building the order and payment systems anyway, since any marketplace would need them. LaFontaine's rule today: "Almost everyone who says they're moving fast is moving slow," and if you have time to think about it, you're too slow.
4. **Be the First Seller.** Whatnot solved the chicken-and-egg problem by being the only seller at launch. It listed Funkos it didn't own, authenticated them as its value to buyers, and bought each one after an order from about 100 online stores, with a team in Brazil hunting down inventory. A pricing algorithm scraped those stores and set a liquidity floor (roughly 10 sales in 30 days) so Whatnot listed only items it could reliably buy. The algorithm had holes: in the first month, buyers found mispricings like a $500 Funko listed at $150.
5. **Demand Before Supply.** The app launched in December 2019 and didn't take its first outside seller until around late February 2020\. LaFontaine says new sellers would have gotten no sales and left, so the first job was building a buyer base. When sellers did join, Whatnot cross-listed their items on other marketplaces through its own account. Sellers got Whatnot's buyers plus demand from other platforms, which was enough to keep them around.
6. **The Grail Giveaway.** Once a week, Whatnot gave away a $500 to $1,000 "grail" Funko, and entering required sharing. Every signup through your link or code earned you another raffle ticket, so entrants kept sharing until Whatnot "took over" Funko subreddits and Facebook groups. The first raffle flopped: 104 entries from maybe 30 to 40 accounts, zero purchases, paid for out of LaFontaine's savings of $100,000 to $200,000\. The second drew about 250 entries, roughly 2.5x, which showed a path to compounding growth.
7. **Live Selling Inflection.** LaFontaine says the business "really started" when Whatnot launched live auctions in July 2020\. Total sales went from $20,000 to $25,000 by March 2020, to $250,000 to $300,000 in September, $2.3 million for 2020, $163 million in 2021, and $1 billion the year after (Whatnot keeps about 10%). Comic shop owners closed their physical stores because they sold more on Whatnot, reaching buyers well beyond a 5- or 10-mile radius. The repeatable part was a fast method for launching new categories, where what worked in one category carried over to all of them.
8. **Stories Are BS.** LaFontaine calls most business stories "BS," a way to get people to follow you, and the visionary founder story "just sounds good." Whatnot calls itself user-driven: you need a direction, but if customers don't want your idea, "you're dead to rights." He lists other surface-level advice that he thinks is "largely incorrect": go after big markets, hire fancy executives, hire people for their big-company resumes. He sees the same pattern at PayPal, which won with a small tool for eBay sellers that Elon Musk resisted at first.
9. **Resume Hiring.** One early Whatnot mistake was trying to be "too corporate" by hiring executives and staff from well-known companies. LaFontaine says assuming someone knows what they're doing because they ran something at a big company turned out to be "broadly incorrect." A good hire can explain in specific detail what they do and how. New executives at Whatnot hear upfront that they aren't beyond reproach and that their methods are "at best sort of neutral" when they arrive.
10. **The Middle School Test.** LaFontaine's self-described strength is getting to the root: what is happening, and how do we know? When the discovery team said an A/B test proved a feed change was fine, he had them check impressions seller by seller, because A/B tests on network systems contaminate both sides as buyers shift streams and sellers react. Plotting seller elasticity curves showed that for some sellers, lost impressions shrank their businesses more than the gain in buyer engagement grew them. When smart hires use big words, he makes them explain it as if he were in middle school, and if they can't, "you probably actually don't know what you're talking about."
11. **Flexing the Delivery.** In Whatnot's early Slack, bad work got called "bad work" plainly. At 1,400 people, many employees know LaFontaine only as a title on Zoom, and "Yo, this sucks" might make someone cry, so he softened his tone without becoming fake. He left Facebook after a senior leader yelled at a whole room during a review of a politicized project LaFontaine had worked past midnight for weeks to prepare. His conclusion: "being mean, nasty, or combative will almost never" get good work out of an organization.
12. **Live Commerce at 30%.** LaFontaine predicts live commerce will reach 30% or more of e-commerce within a decade, up from single digits today. In China it's about 40%, and he puts US and European upside at 20x to 30x. Whatnot already has multiple sellers doing well over nine figures, including one operation that grew from 3 or 4 people to 150 to 200 almost entirely on the app. He sees business openings in wholesale marketplaces that supply live sellers and in multichannel networks that help them run their shows.

Watch the full video at [https://www.youtube.com/watch?v=TAHAlGH\_DK0](https://www.youtube.com/watch?v=TAHAlGH%5FDK0&ref=signalful.com). Read the full transcript at [https://www.usetranscribe.io/yt/TAHAlGH\_DK0/marketplace-launch](https://www.usetranscribe.io/yt/TAHAlGH%5FDK0/marketplace-launch?ref=signalful.com).