Cliff Sosin

It also gets us back to 2022. You see, back in 21, Let's say that you were the sort of person who had a Robinhood account. And you might have speculated in some SPACs and some cryptocurrencies. You might have had a windfall. And you might have thought, you know, look, this isn't like billions of dollars. This is thousands of dollars, tens of thousands of dollars maybe.

It also gets us back to 2022. You see, back in 21, Let's say that you were the sort of person who had a Robinhood account. And you might have speculated in some SPACs and some cryptocurrencies. You might have had a windfall. And you might have thought, you know, look, this isn't like billions of dollars. This is thousands of dollars, tens of thousands of dollars maybe.

You might have thought that given your windfall, you were going to go buy a car. And you might have thought to yourself, since you're the sort of person who owns like SPACs and cryptocurrencies and shops online, obviously the place you were going to buy a car was Carvana.

You might have thought that given your windfall, you were going to go buy a car. And you might have thought to yourself, since you're the sort of person who owns like SPACs and cryptocurrencies and shops online, obviously the place you were going to buy a car was Carvana.

Now, you may or may not have actually bought that car at Carvana because Carvana was sold out and they might not have got what you wanted. You might have gone somewhere else. But here's the deal. you pulled your demand forward. So from Carvana's perspective, even if this is, like Carvana in 2021 had like 1% share.

Now, you may or may not have actually bought that car at Carvana because Carvana was sold out and they might not have got what you wanted. You might have gone somewhere else. But here's the deal. you pulled your demand forward. So from Carvana's perspective, even if this is, like Carvana in 2021 had like 1% share.

So even if this 0.3% of the market, this does not have to be a lot of the market for Carvana to feel this enormous demand pull, which they definitely saw. And it also means that you roll forward a year and all these people are in the exact opposite position. They've just had the opposite of a windfall, whatever you call that, sort of unexpected loss. Decimation. Yes.

So even if this 0.3% of the market, this does not have to be a lot of the market for Carvana to feel this enormous demand pull, which they definitely saw. And it also means that you roll forward a year and all these people are in the exact opposite position. They've just had the opposite of a windfall, whatever you call that, sort of unexpected loss. Decimation. Yes.

And the year before, they all just bought a car. So turns out from Carvana's perspective, although none of us sort of realized it at the time, this isn't great. So I think that was the third contributor that was unique to Carvana. So you have these three, you've got the overall market is down more than the great recession. You've got the tightest auto credit spreads ever and you can't match.

And the year before, they all just bought a car. So turns out from Carvana's perspective, although none of us sort of realized it at the time, this isn't great. So I think that was the third contributor that was unique to Carvana. So you have these three, you've got the overall market is down more than the great recession. You've got the tightest auto credit spreads ever and you can't match.

And you have this unique thing where you kind of all of your sort of bleeding edge customers bought last year. And you just bought this big asset with a bunch of debt. And you just bought this big asset with a bunch of debt. And it turns out that you're learning that like a bunch of your processes. Like eventually, I always sort of thought that Carvana would have bumps in the road operationally.

And you have this unique thing where you kind of all of your sort of bleeding edge customers bought last year. And you just bought this big asset with a bunch of debt. And you just bought this big asset with a bunch of debt. And it turns out that you're learning that like a bunch of your processes. Like eventually, I always sort of thought that Carvana would have bumps in the road operationally.

But it turns out they're all now.

But it turns out they're all now.

And none of that was totally obvious at the time. There were bits and pieces. You're kind of learning as you go. The rate stuff was pretty clear. The market stuff was pretty clear. The stuff I described, but all this data comes at a lag. It was all in a cloud of uncertainty. And then you do what Carvana has to do, which is you start cutting.

And none of that was totally obvious at the time. There were bits and pieces. You're kind of learning as you go. The rate stuff was pretty clear. The market stuff was pretty clear. The stuff I described, but all this data comes at a lag. It was all in a cloud of uncertainty. And then you do what Carvana has to do, which is you start cutting.

And one of the things that's glorious about this business is that as it gets bigger, it gets better. And size begets size. It's just a virtuous cycle. But here's the thing. When you cut that a lot because of all this stuff, that all runs against you.

And one of the things that's glorious about this business is that as it gets bigger, it gets better. And size begets size. It's just a virtuous cycle. But here's the thing. When you cut that a lot because of all this stuff, that all runs against you.

So you slash advertising, you slash inventory, and then external demand gets even worse, and you've reduced things that drive down demand further, and they were like chasing a ball down a hill all year long. And Ernie told you the story on your podcast about kind of how they got better organizationally at focusing on efficiency and how they kind of learned their way into it.

So you slash advertising, you slash inventory, and then external demand gets even worse, and you've reduced things that drive down demand further, and they were like chasing a ball down a hill all year long. And Ernie told you the story on your podcast about kind of how they got better organizationally at focusing on efficiency and how they kind of learned their way into it.