Cliff Sosin

They sold something on the order of 425,000 cars in 2021. They had ambitions of doubling or more in 2022. To do that over the course of all 21, they were hiring and hiring. As it would work out, demand collapsed. And they discovered all manner of operational problems that they were having. And it made 2022 really challenging.

They sold something on the order of 425,000 cars in 2021. They had ambitions of doubling or more in 2022. To do that over the course of all 21, they were hiring and hiring. As it would work out, demand collapsed. And they discovered all manner of operational problems that they were having. And it made 2022 really challenging.

When you tell a story like this, you have the benefit of everything you learned during the whole period and everything you learned after and all the time to synthesize it and sit calmly later on and figure it all out. All of this happened in a cloud of dust with incomplete data. So it's all going to sound so neat and put together and understood.

When you tell a story like this, you have the benefit of everything you learned during the whole period and everything you learned after and all the time to synthesize it and sit calmly later on and figure it all out. All of this happened in a cloud of dust with incomplete data. So it's all going to sound so neat and put together and understood.

And there were definitely pieces of this that I had nailed and there were pieces of it that I learned later. But I just want to, you know, this was real life. What happened was, at least my understanding of it now, was a few things. One is they had a bunch of latent operational issues we can walk through. Another was that

And there were definitely pieces of this that I had nailed and there were pieces of it that I learned later. But I just want to, you know, this was real life. What happened was, at least my understanding of it now, was a few things. One is they had a bunch of latent operational issues we can walk through. Another was that

There was just a very unusual used vehicle market, which led to the used vehicle market being significantly smaller than normal in 22. And it still hasn't fully recovered. It's only partially recovered. In particular, it was bad for independence. And we'll talk about that. Another was the vehicle financing market did totally strange things, which made life absolutely miserable for them.

There was just a very unusual used vehicle market, which led to the used vehicle market being significantly smaller than normal in 22. And it still hasn't fully recovered. It's only partially recovered. In particular, it was bad for independence. And we'll talk about that. Another was the vehicle financing market did totally strange things, which made life absolutely miserable for them.

And then, of course, because things had to be the way they were, they bought Odessa. They added a bunch of debt. The capital markets were close to them, all the rest, which is another set of external facts. So let's just in terms of let's do internal operational stuff. It's interesting. The company had been growing year after year. Circa 100%.

And then, of course, because things had to be the way they were, they bought Odessa. They added a bunch of debt. The capital markets were close to them, all the rest, which is another set of external facts. So let's just in terms of let's do internal operational stuff. It's interesting. The company had been growing year after year. Circa 100%.

And when you're doing something as complicated as what Carvana is doing and growing as fast as Carvana is growing, things were always going wrong. And I would always hear kind of some horror story or another out of some part of the organization. But, you know, you looked at the overall star ratings. They had great reviews. It was like, well, you know, it's a big organization.

And when you're doing something as complicated as what Carvana is doing and growing as fast as Carvana is growing, things were always going wrong. And I would always hear kind of some horror story or another out of some part of the organization. But, you know, you looked at the overall star ratings. They had great reviews. It was like, well, you know, it's a big organization.

They're growing really fast. To think about it, like if you're doubling every year, less than half of your employees on average have been with you for like less than a year, right? This is wild. They also had deliberately prioritized speed and growth over necessarily slowing down and, like, really hardening their processes.

They're growing really fast. To think about it, like if you're doubling every year, less than half of your employees on average have been with you for like less than a year, right? This is wild. They also had deliberately prioritized speed and growth over necessarily slowing down and, like, really hardening their processes.

And the reason for this was that they viewed, you know, this is a scale business, and there was risk that if they weren't first to scale, that they would be disadvantaged over time. And at the time, their competitors hadn't failed yet. They grew a lot of their operations were more mediated by, like, I'd call it tribal knowledge and culture. And so, silly example, but a real one.

And the reason for this was that they viewed, you know, this is a scale business, and there was risk that if they weren't first to scale, that they would be disadvantaged over time. And at the time, their competitors hadn't failed yet. They grew a lot of their operations were more mediated by, like, I'd call it tribal knowledge and culture. And so, silly example, but a real one.

There's a role at the IRC inspection and reconditioning center for receiving trucks, taking the cars off the trucks, putting different cars on the trucks and sending the trucks on their merry way. This sounds simple enough, but it's a lot of trucks and it's a lot of cars. And there's this question of where do you put the cars and what order do you put them on the trucks in?

There's a role at the IRC inspection and reconditioning center for receiving trucks, taking the cars off the trucks, putting different cars on the trucks and sending the trucks on their merry way. This sounds simple enough, but it's a lot of trucks and it's a lot of cars. And there's this question of where do you put the cars and what order do you put them on the trucks in?

And by the way, if one of them doesn't start, what do you do? And how do you staff this operation? Because it turns out fetching a car in a 6,000 car parking lot, it's not like walking down the street and getting a car, right? And all of these...

And by the way, if one of them doesn't start, what do you do? And how do you staff this operation? Because it turns out fetching a car in a 6,000 car parking lot, it's not like walking down the street and getting a car, right? And all of these...