Cliff Sosin

Carvana, if you think about a market like Connecticut, Carvana has, I don't know exactly how big Connecticut's fleet total used vehicle inventory is, but let's say that Carvana has something like three quarters of all the inventory, including Carvana's inventory in the state of Connecticut, just to make up a number. One might ask why we don't have like three-quarters of the sales.

Carvana, if you think about a market like Connecticut, Carvana has, I don't know exactly how big Connecticut's fleet total used vehicle inventory is, but let's say that Carvana has something like three quarters of all the inventory, including Carvana's inventory in the state of Connecticut, just to make up a number. One might ask why we don't have like three-quarters of the sales.

Because they probably have, I don't know, Connecticut sales out of my head with like 100%, something like that. And so, you know, the first thing you might do is throw out, okay, well, there are some cars that are there in California. There are shipping fees. There's delays. Like, let's only look at cars that are nearby. And so you cut that inventory down.

Because they probably have, I don't know, Connecticut sales out of my head with like 100%, something like that. And so, you know, the first thing you might do is throw out, okay, well, there are some cars that are there in California. There are shipping fees. There's delays. Like, let's only look at cars that are nearby. And so you cut that inventory down.

And then you might say, well, let's throw out people who haven't heard of Carvana. It turns out they have like 80% awareness, but we'll throw out some people. Okay, let's reduce some half of people say they don't want to buy a car online right now, although the number is gradually falling.

And then you might say, well, let's throw out people who haven't heard of Carvana. It turns out they have like 80% awareness, but we'll throw out some people. Okay, let's reduce some half of people say they don't want to buy a car online right now, although the number is gradually falling.

But like, let's throw out, you know, that half, you're still left with a number that's way higher than where they are. So like, where are the sales? And also weird is, okay, you go into a market, you have all this huge inventory, this great product. Why does it take all, you know, why do sales kind of ramp like this as opposed to just like step function? Like what is delaying people adopting this?

But like, let's throw out, you know, that half, you're still left with a number that's way higher than where they are. So like, where are the sales? And also weird is, okay, you go into a market, you have all this huge inventory, this great product. Why does it take all, you know, why do sales kind of ramp like this as opposed to just like step function? Like what is delaying people adopting this?

I didn't have a great answer for that for a long time, but I kind of thought it was word of mouth. I was kind of like, you know, I think it just takes time, word of mouth. And my evidence for that was that if you surveyed

I didn't have a great answer for that for a long time, but I kind of thought it was word of mouth. I was kind of like, you know, I think it just takes time, word of mouth. And my evidence for that was that if you surveyed

people who bought from Carvan asked if they recommended it to people I think it's something like four they would recommend it to four people on average which is an enormous like you know number viral thing yeah and so that's where I'd left it but as you know in the sort of wreckage of trying to figure all this stuff out you know I started thinking harder about this

people who bought from Carvan asked if they recommended it to people I think it's something like four they would recommend it to four people on average which is an enormous like you know number viral thing yeah and so that's where I'd left it but as you know in the sort of wreckage of trying to figure all this stuff out you know I started thinking harder about this

And it occurred to me that I'd never done two things which seem obvious in retrospect. One was I'd never asked people how important this word of mouth was to their decision to buy from Carvana. So we added to the survey something to the effect of, did you get a recommendation from a friend or family member? How important was it?

And it occurred to me that I'd never done two things which seem obvious in retrospect. One was I'd never asked people how important this word of mouth was to their decision to buy from Carvana. So we added to the survey something to the effect of, did you get a recommendation from a friend or family member? How important was it?

And we found that 70% of people said that it was either somewhat or very important in their choice to buy from Carvana. Therefore, only a third of people were buying from Carvana without the recommendation of a friend or family member. And once I saw that, that got me thinking, I wonder what's going on with this third of people who are buying without the recommendation.

And we found that 70% of people said that it was either somewhat or very important in their choice to buy from Carvana. Therefore, only a third of people were buying from Carvana without the recommendation of a friend or family member. And once I saw that, that got me thinking, I wonder what's going on with this third of people who are buying without the recommendation.

So that convinced me there's virality. But what's going on with these people who are buying without the recommendation of a friendly family member? And my theory was, well, they're early adopters. So we survey people who bought from Carvana. We ask them questions like, do you have a Robinhood account? Have you ever owned Bitcoin? You know, do you do online grocery shopping?

So that convinced me there's virality. But what's going on with these people who are buying without the recommendation of a friendly family member? And my theory was, well, they're early adopters. So we survey people who bought from Carvana. We ask them questions like, do you have a Robinhood account? Have you ever owned Bitcoin? You know, do you do online grocery shopping?

And the answer is like, of course I do all these things. Like, you know, all yes, yes, yes. They're way higher than non-carbonavirus. So now I can say, look, many people won't do it unless someone says, okay, some people will just give it a plunge, right? And in general, the more early adopter-ish you are, the less nudging you need from relations to do it. And that's what drives the growth curve.

And the answer is like, of course I do all these things. Like, you know, all yes, yes, yes. They're way higher than non-carbonavirus. So now I can say, look, many people won't do it unless someone says, okay, some people will just give it a plunge, right? And in general, the more early adopter-ish you are, the less nudging you need from relations to do it. And that's what drives the growth curve.