Highly Valued Website for Handmade Goods Goes Abroad

THE WALL STREET JOURNAL

By EMILY GLAZER

Etsy.com, an online crafts marketplace, believes there is more money to be made in handmade goods.

The company, which launched six years ago, has more than 11 million registered users in 150 countries and more than 10 million listed items for sale. It sold more than 2.3 million items in September, including handmade and vintage goods as well as crafts.

It costs nothing for sellers to sign up, and they pay 20 cents to list an item for four months. Etsy then gets a 3.5% commission on each sale. Prices range from 20 cents for a glass bead to $100,000 for a sculpture.

Chief Executive Chad Dickerson, who took over from former CEO and Etsy founder Robert Kalin in July, has been trying to expand the company's international reach. Etsy put its first stake in the ground in Europe last month, launching its Berlin-based, German-language website.

At the closely held company's headquarters in the New York borough of Brooklyn, the 39-year-old Mr. Dickerson, a former Yahoo Inc. senior products director, discussed plans to expand the company, and whether its nearly $300 million valuation is justified. Excerpts:

WSJ: A new CEO is often brought in to accomplish a specific task or set of goals. Why did the board choose you?

Mr. Dickerson: My task is really to scale Etsy to be a much more powerful force in the world. That means making Etsy a global brand: moving into other countries as we have been doing, and other languages. Bringing Etsy to other platforms. We're investing a lot with mobile [Etsy on mobile devices like smartphones] right now.

WSJ: Since you took over as CEO, how have you responded to problems like a clunky search engine and it being too time-consuming to merchandize goods?

Mr. Dickerson: We changed our search algorithm in a really fundamental way, from sort by most recently listed to relevancy. That's helping buyers find things more easily. We launched something we're calling Search Ads. It has given sellers a way to promote their items on the site [by buying key words to appear in search results]. We launched some merchandising hubs around three themes: fashion, kids and home [with curated content and category-based searches].

WSJ: Etsy was most recently valued at about $300 million [in its latest round of funding, led by Index Ventures in August 2010], nearly 10 times last years' sales. Do you think Etsy is overvalued?

Mr. Dickerson: Of course not. What we're doing here is building a long-term global business. To some degree in the same way that employees of a public company shouldn't be worried about the stock price every day, as a private company we're the same way. And while it's important that Etsy has a healthy valuation for a variety of reasons, it's not something that we really think about, we're more focused on building.

WSJ: Etsy Labs are physical workspaces in Brooklyn and—most recently—Berlin where the public can gather, educate and create. Why start one in Berlin?

Mr. Dickerson: Our general approach is to build the community [lab] first before building the website. We had people in Germany [working in these labs] for almost a year and a half before launching the Etsy website in German. There was already an endemic community around craft fairs. We're just repeating that in other places.

WSJ: Are there other places you're thinking of building a community?

Mr. Dickerson: We're going to focus on Western Europe. A lot of what we're doing right now—since we just launched [in Berlin] a few weeks ago—is learning from this experience. We have [communities of sellers and buyers in] Singapore, in Tokyo, to some degree we have a foothold everywhere in the world. My goal is by the end of next year to deliver Etsy in the languages of the countries where Etsy has the most promising communities.

WSJ: Some fear the company's growth could be hampered by Etsy's rule that sellers can only sell something they make themselves. Will that continue in the future?

Mr. Dickerson: Etsy is known and has been known as a handmade marketplace. That's really an anchor but not the whole story. Etsy has a large business selling vintage items and also supplies. Those businesses have been with Etsy since the very beginning.

WSJ: Etsy raised $20 million in a Series E round last August. What's next?

Mr. Dickerson: The business is doing well, we actually don't need to raise money, we don't need to be acquired, we don't want to be acquired and don't have plans to go public right now. We have a lot of room to grow and we're just not ready for any of those things.

Why No One Company Will Ever Monopolize the Internet

Jonathan Rick is a social media strategist in Arlington, VA. You can follow him on Twitter @jrick and read his blog atJonathanRick.com.

The pace and power of web-fueled innovation is stunning. One day we’re swearing by Outlook, the next, we can’t live without Gmail. These changes exemplify the beauty of the Internet — the possibility that greener pastures are but a click away.

On the other hand, the list of tech innovations that could have been is quite long. Before we get into those, a few caveats:

• Some of the companies below may not have missed the boat so much as skipped the ride. Oftentimes, these businesses simply chose to perfect their core businesses instead of tacking on new features.
• None of these companies has been “MySpaced.” To the contrary, each remains well-regarded and innovative in its own right.

So, how did tech companies miss the boat?

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1. Google Docs missed the SlideShare boat. Sure, Google Docs can display PDFs and PPTs, but documents are slow to load, maximized by default, and can’t easily be shared or embedded. By contrast, SlideShare is known as “YouTube for documents” because it’s fast, user-friendly and social.

2. Google Docs missed the Dropbox boat. The search giant passed on adding synchronization to Google Docs (or GDrive). Meanwhile, Dropbox pioneered this feature, for which it’s now the gold standard. And, in an ironic twist, during a five-day, company-wide hackathon, Dropbox developed the ability to sync its accounts with Google Docs. (Although Google may soon unleash a Dropbox killer.)

3. Microsoft Office missed the Google Docs boat. Only after companies, governments and non-profits had “gone Google” did Redmond release a cloud-based, collaborative version of its cash cow, Office (along with a few videos that contrast Office with Docs).

4. iTunes missed the Spotify boat. Apple cornered the digital music market years ago, but besides the all-important $0.99 per song price tag, Cupertino never really innovated with iTunes. Specifically, the software’s lack of social and streaming services created massive opportunities that Spotify — and Pandora, Amazon,Google, and Facebook — pounced on. Apple now is playing catch-up with Ping (pathetic) and iCloud (promising).

5. Mapquest missed the Google Maps boat. When I was in college, “Mapquest” was so popular that we used it as a verb. Today, it seems the only people who use this site are those who still have an AOL email address. The reason: thanks to relentless innovation (mash-ups, Street View, GPS-enabled mobile apps), Google Maps has presented itself everywhere you want to travel.

6. Google Latitude missed the Foursquare boat. Ironically, the founder of Foursquare was a former Googler who left because Mountain View wouldn’t allocate enough resources to his team, “leaving us to watch as other startups got to innovate in the mobile + social space.” Google still hasn’t made it with Latitude, whereas Foursquare’s points system, partnership with American Express, and merchant features have generated growth of a million users per month. (Perhaps this is why Google may want to buy Foursquare instead of compete with it.)

7. Facebook missed the LinkedIn boat. When I learned of LinkedIn, I thought, can’t you already do this with Facebook? Well, yes, but not without some hassle. Reed Hoffman, LinkedIn’s founder, recognized that, while we want to be hip in our personal lives, we strive to be practical and maybe even a little boring in our careers. This is why we use one email address for pleasure and one for business, and why we use Facebook to socialize with friends and LinkedIn to network with colleagues. Recognizing this, Facebook continues to hype its business pages, while such professional credibility comes naturally to LinkedIn.

8. Facebook missed the Twitter boat. When I learned of Twitter, I thought, can’t you already do this with Facebook? Indeed, at its core, Twitter is merely the Facebook status update. Yet Facebook lacked Twitter’s simplicity and pith, a void that ascetic Twitter founder, Jack Dorsey, was keen to fill. Apparently, 100 million people agree.

9. Blogger and WordPress missed the Tumblr boat. Finally, when I learned of Tumblr, I thought, can’t you already do this with Blogger or WordPress? Just write shorter. Again, you could, but not with Tumblr’s base-bones simplicity, dynamic community and effective reblogging feature. Microblogging, it turns out, is different from blogging. (No doubt, this is why Blogger just announced Dynamic Views.)

10. Yelp missed the Foodspotting boat. Even though Yelp remains the top social network for restaurant reviews, it overlooked an essential facet of the dining experience: pictures. Foodspotting seized this opening, made it mobile, and now is expanding its focus beyond foodies.

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So why do these examples matter?

The beauty of the web is that it dramatically lowers the traditional barriers to entry, so an entrepreneur can penetrate an already saturated market. For instance, despite heavy competition from the likes of LinkedIn, Yahoo, Facebook, Google-owned Aardvark, and Answers.com, Quora plunged into the Q&A fray. In short order, it carved out and capitalized on a niche.

Examine the above list and you arrive at an under-appreciated conclusion: Internet innovation is so fierce and constant that it undermines the notion of zero-sum market share. Instead of vying for a piece of the same fixed and static pie, webtrepreneurs bake whole new pies. Not for nothing does Jeff Bezos insist that the Kindle comprises a “different product category” than the iPad. Just because a company maintains a seeming monopoly on a market doesn’t mean the market is devoid of opportunities. When there’s an innovator, there’s a way. With the web, Goliath is always vulnerable.

Sure, tech giants are somewhat limited. Just reference the lawsuit from the Justice Department, theinvestigation from the Federal Trade Commission or the hearing from Congress.

Internet innovation comes in tidal waves, big and bold. By contrast, when’s the last time your microwave got a radical upgrade? Or your shower head? And how’s that electric car coming along?

In the end, the web’s rising tides lift the only ship that matters: the user’s.

Image courtesy of iStockphoto, aluxum

Internet delle cose, nel 2020 giro d'affari da 1.200 miliardi di dollari

Un report Gsma prevede che il numero di device connessi salirà dagli attuali 9 ai 24 miliardi. Un'enorme chance per gli operatori mobili che, per capitalizzarla, dovranno però stringere collaborazioni su ogni elemento dell'ecosistema

La proliferazione dei device connessi a Internet creerà un’opportunità di guadagno di 1.200 miliardi di dollari per gli operatori entro il 2020: lo calcola la Gsma nel nuovo studio realizzato in collaborazione con Machina Research e la sponsorizzazione di At&t, Deutsche Bank, Kt, Telenor Connexion e Vodafone. La ricerca mostra che il numero di device connessi salirà dai circa 9 miliardi di oggi a oltre 24 miliardi nel 2020 e, all’interno di questo gruppo, i terminali wireless cresceranno del 100%, dagli attuali 6 miliardi a 12 miliardi nel 2020.

Questa crescita esplosiva significa un’opportunità di revenue per gli operatori mobili di quasi 1.200 miliardi di dollari di qui a nove anni, un incremento di sette volte rispetto alle revenues del 2011, e rappresenta un significativo potenziale di crescita per l’intero ecosistema. Regione per regione, le previsioni di guadagno sono così suddivise: 447 miliardi di dollari per l’Asia-Pacifico; 305 miliardi per l’Europa; 241 miliardi per il Nord America; 92 miliardi per l’America Latina e 87 miliardi per Medio Oriente e Africa.

"Stiamo entrando in una nuova fase di sviluppo per l’industria mobile, in cui la tecnologia mobile connetterà ogni aspetto della nostra vita”, afferma Michael O'Hara, chief marketing officer, Gsma. "In questa nuova Connected Life, il mobile trasformerà la società e avrà effetti profondi sul modo in cui interagiamo non solo con gli altri, ma anche con il mondo che ci circonda. Tuttavia, capitalizzare questa enorme opportunità richiede la collaborazione di tutti gli elementi dell’ecosistema per dimostrare come la tecnologia mobile, in ogni aspetto, dai tablet ai nuovi device per la sanità, può migliorare la vita di tutti, personale e lavorativa”.

Gli operatori mobili possono beneficiare di questa importante opportunità di guadagno concentrandosi su alcune aree chiave della catena del valore, come la fornitura di servizi e l’integrazione di sistemi, ma anche collaborando più da vicino con segmenti verticali dell’industria fornendo nuovi servizi per i loro clienti.

I settori che beneficeranno al massimo di questa collaborazione sono l’industria dell’elettronica di consumo, che potrebbe generare entrate dirette di 445 miliardi di dollari; l'automotive, che potrebbe generare revenues per 202 miliardi di dollari; la sanità, con una crescita di 69 miliardi di dollari; e le utilities, con possibili guadagni aggiuntivi di 36 miliardi di dollari entro il 2020.

Machina Research ha identificato una precisa opportunità di mercato per gli operatori mobili, ma le revenues che possono realmente essere prodotte dipendono dalle singole strategie di business. Gli operatori si trovano nella posizione ideale per lavorare in partnership con altre industrie e sfruttare questa opportunità perché forniscono una connettività di rete pervasiva, offrono un servizio clienti affidabile, dispongono di servizi di fatturazione e distribuzione consolidati e rappresentano marchi noti per consumatori e aziende.

"Ci stiamo spostando verso una nuova era di connettività dove assisteremo alla proliferazione di miliardi di device connessi in tutto il mondo”, commenta Jim Morrish, direttore di Machina Research. “La maggior parte di questa crescita verrà dai sistemi machine-to-machine: un nuovo mercato per i provider di servizi di comunicazione e con nuove dinamiche. Il modo in cui operatori mobili, vendor di device, provider di servizi e altri player nella catena del valore reagiranno a questa opportunità avrà importanti implicazioni per il loro successo futuro. Al momento, l’industria mobile ha una evidente opportunità di giocare un ruolo centrale nella Connected Life."

"La crescita dei device connessi ha il potenziale di offrire consistenti vantaggi sociali, ecologici e finanziari all’economia mondiale”, secondo Matthew Bloxham, direttore della ricerca telecom di Deutsche Bank. “I dati resi noti oggi sottolineano le opportunità di revenue per gli operatori mobili, ma l’impatto economico potrebbe essere molto maggiore, includendo benefici indiretti per l’industria come riduzione dei costi, incremento dell’efficienza e possibilità di introdurre nuovi prodotti e servizi. E’ necessario un approccio comune a tutta l’industria mobile per sfruttare il mercato che si apre”.

"Esiste un potenziale incredibile per l’innovazione wireless in tantissimi settori, dalla sanità all’automotive all’elettronica di consumo”, aggiunge Glenn Lurie, presidente di Emerging Devices, At&t. "Tutti i clienti potranno vedere presto quali benefici si ottengono dalla tecnologia mobile incorporata nei prodotti che si usano tutti i giorni”.

Dong-Ik Lee, senior vice president di Kt, commenta: "Connettere tutti gli oggetti alle reti può rivoluzionare la creazione di valore per tutti i nostri clienti, per esempio trasformando le automobili in centri di produzione di informazioni e intrattenimento”.

"I servizi e le applicazioni offerti da segmenti chiave dell’industria M2M, come utilities, telematica, sanità mobile e automotive, dipendono da soluzioni e connettività estremamente sicure e affidabili. Gli operatori mobili devono lavorare insieme per sfruttare al meglio questa opportunità, per esempio siglando accordi di roaming per l’M2M”, aggiunge Fredric Liljestrom, SVP, Telenor Connexion. “Gli operatori mobili dovrebbero anche diventare più integrati nel business dei loro clienti e stimolare la collaborazione con settori verticali dell’ecosistema della Connected Life".

Conclude Erik Brenneis, capo di M2M, Vodafone Group: "I device con funzionalità M2M possono fornire ai clienti un’esperienza molto più ricca di quelli che ne sono privi. I dati della Gsma mostrano l’enorme potenziale dei servizi M2M e questi diventano ancora più attraenti se erogati in modalità wireless: pensiamo ad esempio agli apparecchi di navigazione personali che possono mostrare lo stato del traffico in tempo reale”.

11 ottobre 2011

di Patrizia Licata

GSMA ANNOUNCES THAT THE PROLIFERATION OF CONNECTED DEVICES WILL CREATE A US$1.2 TRILLION REVENUE OPPORTUNITY FOR MOBILE OPERATORS BY 2020

The Number of Mobile Connected Devices is Expected to Increase by 100 Per Cent to Nearly 12 Billion by 2020; Cross-Industry Collaboration Essential to Deliver the Connected Life

10 October 2011, San Diego: The GSMA, with the support of AT&T, Deutsche Bank, KT, Telenor Connexion and Vodafone, and in partnership with Machina Research, today released research that outlines the market opportunity and revenue potential for connected devices. The research shows that the number of total connected devices¹ is expected to increase from approximately 9 billion today to more than 24 billion in 2020, and within that, mobile connected devices² will grow 100 per cent from more than 6 billion today to 12 billion in 2020. This explosive growth will support an addressable revenue opportunity for mobile operators of nearly US$1.2 trillion³ by 2020, a sevenfold increase from expected revenues in 2011, and will also provide significant growth potential for the entire ecosystem.

"We are entering the next phase in the development of the mobile industry, one where we will see mobile connect everything in our lives," said Michael O’Hara, chief marketing officer, GSMA. "In this new Connected Life, mobile will transform society and will have a profound effect on the way we interact not only with each other, but also with our surroundings. However, capitalising on this enormous opportunity requires collaboration across the entire ecosystem to demonstrate how mobile technology in everything from tablet PCs to new healthcare devices can enhance people’s personal and business lives."

Mobile operators can benefit from this important revenue opportunity by addressing key areas of the value chain⁴ such as service provision and system integration, as well as collaborating more closely with vertical industry sectors to provide compelling new services to their customers. The sectors that will benefit from this collaboration include the consumer electronics industry, which could generate direct revenues of US$445 billion; the automotive sector, which could generate US$202 billion in revenues; the health sector, which could see growth of US$69 billion; and the utilities sector, which could see an additional US$36 billion in revenue by 2020.

Machina Research has identified a significant addressable market opportunity for mobile operators, although the revenue that can actually be realised will depend on individual business strategies. Mobile operators are uniquely placed to work in partnership with other industries to enable this opportunity because they provide ubiquitous network connectivity; deliver proven customer care, billing and distribution capabilities; and represent a trusted brand for consumers and businesses.

Jim Morrish, director at Machina Research, commented, "We are moving into a new era in connectivity where we will see the proliferation of billions of connected devices in the world. Most of that growth is coming from machine-to-machine: a new market for communications service providers, and with new dynamics. The way that mobile operators, device vendors, service providers and others in the value chain react to this opportunity will have important implications for their future success. Right now, the mobile industry has a clear opportunity to play a central role in the Connected Life."

Matthew Bloxham, director of telecoms research at Deutsche Bank added, "The growth of connected devices has the potential to offer substantial social, ecological and financial benefits to the world economy. The figures announced today highlight the significant revenue opportunity this space could deliver. However the wider economic impact could be far greater, including indirect benefits to industry such as cost reduction, increased efficiency and the potential for new products and services. We are pleased that many mobile operators are already implementing strategies to tap into this market, although a broad industry-wide approach is essential to realising the full opportunity."

"There is incredible potential for wireless innovation across so many verticals, from healthcare to automotive to consumer electronics," said Glenn Lurie, president of Emerging Devices, AT&T. "All types of customers are quick to realise the benefits of embedded mobile technology in everyday products, and this is going to lead to an explosion of creativity and adoption. We've made great progress embedding wireless into navigation, tracking, gaming and entertainment devices, but we've just scratched the surface here. There are so many exciting possibilities."

Dong-Ik Lee, senior vice president, KT said, "Our customers are excited about connected experiences. Connecting objects to networks can revolutionise their value. For example, helping turn vehicles into infotainment hubs, CCTVs into commercial area analysis units and toys into educational robots. At KT, we have started a new trial on an ’open objects’ platform to help people to participate more freely in the connected world, and we expect it to accelerate the growth of this connected market."

"The services and applications provided by key sectors in the M2M space, such as utilities, telematics, mobile health and automotive, depend on highly reliable and secure solutions and connectivity. Mobile operators must work together to make the most of this opportunity, such as signing M2M roaming agreements and securing price structures that enable M2M-type traffic. Mobile operators should also become more integrated in their customers’ businesses and drive further collaboration with vertical sectors in the Connected Life ecosystem, whilst staying competitive to ensure market growth," says Fredric Liljeström, SVP, Telenor Connexion.

Erik Brenneis, Head of M2M, Vodafone Group added: "Devices with M2M capabilities are able to give customers a much richer experience than those without. These figures show the enormous potential of M2M services which become even more attractive when delivered wirelessly, such as personal navigation devices, which are able to show traffic jams in near real time."