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Social Commerce: Etsy Returning To Its Roots

Listen and be amazed: After a phase of so-called professionalization, Etsy will make a radical about-face and go back to its roots (“Etsy Is Not About Retail”):

"A day after announcing he would return as CEO, Etsy's founder Rob Kalin said he would alter the company's focus away from retail and more on "social commerce" when he replaces outgoing CEO Maria Thomas.

He will close down the site's gift guides in early January, stating the guides are "a retail-oriented way of merchandising, and this isn't what Etsy is about."

"In social commerce, our focus is on people, not products," he said, adding that the gift guides don't reflect the values of the Etsy community."

Mixing “social” and “commerce” is a delicate balancing act. And Etsy seems to have realized that in time, before falling into the same trap as eBay after the departure of former CEO Meg Whitman.

More on the exciting new, old Etsy, which will also be getting more airtime on Exciting Commerce in the future:

"I'll be (re)focusing Etsy more on what we call "social commerce," and less on retail.

To get an idea of what this means, let's look at merchandising. For a retailer, merchandising means putting products on display that are likely to sell. In social commerce, our focus is on people, not products.

It's our job to build tools for you to use, that help you promote items as you'd like to.

As the same time, Etsy wants to introduce new organisational structures:

"Right now, Etsy is structured in such a way that all the product people work in one area, the engineers in another, etc. People come together as needed for a project, and then move on. Customer support handles email q's, and the community crew is in here.

This isn't working well for us, in terms of building and supporting features. It's too monolithic, requires lots of meetings, and makes it difficult for the community to see what we're up to.

Instead, we will create teams inside Etsy around site features. There will be a team dedicated to seller tools, a team for community tools, a Showcase team, and so forth. These teams will support what they build (with extra help if needed), and iterate to improve things."

And if Rob Kalin’s statements can be interpreted correctly, it seems that Etsy will in the future be more oriented around social networking aspects:

"In a way similar to the gift guides, Etsy's job should be to build tools that help you make the site what you want it to be.

We need to create a thousand more forums for people to talk (i.e. groups), and of course we can't moderate this.

We need to scale back moderation, and focus on making tools that empower people to moderate things for themselves."

All in all, Rob Kalin’s answers to Etsy’s user’s questions form one of the best social commerce manifestos ever published:

"As a board, we believe that focusing on revenue is not what will make Etsy continue to grow.

We are focused on our service: building the best tools and supporting this community. If we do this well, revenue will follow.

Now that we are profitable, we can redouble our efforts here, and I'm really excited about this. Our success as a company follows your success as members."

Rob Kalin goes more into some details in the second part of his post. And apparently, other founders have suddenly re-discovered interest in Etsy.

Related posts:

• Sales Update: Etsy Doubles Monthly Revenues From Last Year
• Etsy Beats Revenue Record by 10% with $15 Million
• Etsy Investor Gives an Inside Peek

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

What Was and What Shall Be: The Rise of The Emotional Web

If the 90’s went down in history as the decade of the data and information highway, the last 10 internet years could go down confidently as the decade of the network. Since 2004/2005 the evolution went from physical networks to data networks onwards to the conquest of the social network (Facebook, StudiVZ, YouTube, Twitter, etc.)

Social Networks vs. Personal Networks

The term Social Network might be a misnomer similar to the likes of the data highway of the 90’s. What really evolved were personal networks, as an extension to the public web represented by Yahoo, AOL, Google, and the like.

A very good introductory article on the topic was written already at the beginning of the decade, albeit in a somewhat different context. In it, Gerd Waloszek describes various points of view and very nicely separates the personal and social categories:

"The term "personal network" is not a new term coined during the current boom of collaboration tools. Personal or social networks have always existed (though perhaps under a different name) for the simple reason that humans are social creatures.

They build relationships and form groups, they communicate and collaborate. That said, the introduction of new technologies, especially the Internet, has had a major impact on how people organize their personal networks.

Time and distance have taken on new meanings. "Physical distance" has lost its significance and been replaced by a perception of "closeness" in time and virtual space.

Face-to-face communication, although still important, has become less so, while computer-supported media offers previously unknown channels that inspire new communication styles."

The documentary film “Six Degrees of Separation” is a very helpful guide for understanding the developments of the past decade. It not only shows how social networks work, but also illustrates how closely people have closed ranks:

With this background, the two most important developments of the last decade:

• The advent of personal/social tools and gadgets - be it cellphones, smartphones, netbooks, etc. and the cornucopia of associated (web) applications.

And looking deeper:

• The social/personal gaming arena, which especially tests out the emotional potential of the Web.

The coming decade may in particular show us how networks will help us satisfy not only our information needs, but also our emotional ones - The Rise of the Emotional Web.

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Etsy Opens Office in Berlin, Founder Comes Back As CEO

As announced by current Etsy CEO Maria Thomas last week, Etsy will be opening up an office in Berlin in January. Also in January, Etsy founder Rob Kalin will be coming back to take back the CEO role.

Etsy is now operating profitably and is jumping from one revenue record to the next. Etsy was able to more than double their monthly revenues just in the last 9 months to reach a November level of $21.9 million. For 2009, Etsy should be looking at an annual revenue of $180 million, a doubling over the previous year.

A couple of weeks ago, Etsy took over the technical expertise of Adtuitive. Prior to that, they took on their VP of Technical Operations from Flickr.

Related posts:

• Etsy Beats Revenue Record by 10% with $15 Million
• Etsy Investor Gives an Inside Peek
• Sales Update: Etsy Rushes from Record to Record

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Local Deals: The First European Groupon Copycats Hit The Market

Munich is the setting for Heimatpreis, the first significant German initiative which uses the Groupon-model, the American site which set a new high for capital raised for a live shopping site (30 million USD):

Seed investor Lukasz Gadowski has estimated that Germany has a good 5 to 10 sites of this type currently in the works (or even live) and Europe-wide over 20. Nonetheless, Gadowski comments in his German blog on why he feels negative about financing such a concept in Europe (primarily: the less pronounced coupon culture, language barriers across Europe, capital intensive daily business and too much competition).

At the Live Shopping Days conference in Berlin on January 28, the three strongest teams with Groupon-like concepts will be invited to present for the conference participants, amongst whom several business angels and investors are to be expected. Emails from prospective teams can be sent to groupon@excitingcommerce.de (standard coupon sites are excluded).

Related posts:

• Live Shopping Buzz: Groupon Nabs A Healthy $30 Million
• Live Shopping: Groupon Obtains Additional $5 Million Capital
• Lockerz: The Shopping Extravaganza for the Next Generation

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Sokoz Offers French Live Shopping Action

In the Start-up competition of last week’s LeWeb Conference, Sokoz introduced their live shopping efforts ("Sokoz turns real-time auctions into web entertainment"):

"Sokoz is a quick-fire real-time, reverse auction platform in beta that makes bidding for online goods dangerously fun for the shopping-addicted."

Sokoz follows a platform strategy, which means the site allows itself to be used to create live shopping events. There is a program grid similar to a TV programming guide. Subscriptions are offered for the auctions and each last only a few minutes.

Sokoz was founded in September and according to the founders, the first sold product was a ukelele. Sokoz appears to be geared towards unusual product categories (see current promotions). However, there are also last minute events for travel and a load of other product areas.

What is still missing from Sokoz, is an attractive homepage which shows what the site is all about and also encourages participation. At the moment there seems to be not much going on and users may ask themselves if the site is even live yet.

In comparison to the several young founders in the live shopping scene, the Sokoz team gives a good impression of experience.

The Sokoz founders will be at the Live Shopping Days conference in January in Berlin.

Related posts:

• Lockerz: The Shopping Extravaganza for the Next Generation
• The Shop Exchange: Shopflick Joins PopSugar and ShopStyle
• Amazon Invests In Video Shopping Platform The Talk Market

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Swoopo Bids Farewell to Its CEO

The pattern is already well known: new investors let go of old CEOs. In the long run, even Korea hasn’t offered a solution for Swoopo.

In the press release from a couple of days ago (per email):

“Gunnar Piening, who successfully led the Entertainment Shopping AG since the end of 2007 as CEO, leaves the company in mutual agreement.

As of now, Frank Han, formerly CEO for North America and Dr. Ralph Werner, already since the beginning of May Chief Operating Officer, will lead the company together.”

eToys founder Frank Han and ex-eBay/Mobile.de manager Ralph Werner have been on board at Swoopo since August Capital Partners stepped in.

Gunnar Piening had changed the name from Telebid to Swoopo, offered direct purchases to empty handed bidders and has otherwise expanded as much as possible. It remains to be seen what the new bosses are going to come up with to lead Swoopo to enduring success. Its already the fourth management swap in the history of Swoopo/Telebid.

In 2008, Swoopo, along with its Penny Auctions, generated revenues of 22 million euro.

Related posts:

• SpreadBooster Plans Shopping Experience for the Masses
• Top 500 Shops: Swoopo Nabs 10 Million in Financing

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Live Shopping Buzz: Groupon Nabs A Healthy $30 Million

Is live shopping dead? Groupon, which has been attracting attention with its locally based live shopping campaigns, has managed to secure another $30 million from Accel Partners, just over a year from its launch:

"The site shows nearly one million Groupons sold, claiming to have saved users over $42 million. The company, which takes a cut of the deals it sells, is profitable and predicts revenue of $100 million over the next 12 months."

Very nice to see that an idea that we’ve been promoting as “live shopping for experts” in all of our previous Live Shopping Days is also building resonance with investors.

Groupon is perfectly leveraging every live shopping advantage: high volumes in short time frames, and smart promotions and recommendation elements build up the necessary buzz amongst the users.

Several good reports on Groupon can be found on Google News. Groupon is besides Lockerz (see: "The Shopping Extravaganza for the Next Generation") another example which shows how exciting e-commerce will have to look if users’ attentions are to be held in the future.

Related posts:

• Live Shopping: Groupon Obtains Additional $5 Million Capital
• Lockerz: The Shopping Extravaganza for the Next Generation

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Lockerz: The Shopping Extravaganza for the Next Generation

Pretty surprising that even before launching, Lockerz has been able to generate so much buzz with Google, YouTube & Co.

But this is exactly how it should be when someone launches with a really exciting new sales concept which cleverly combines live shopping and entertainment elements:

"Lockerz is the place to go to buy the coolest stuff at the lowest prices, watch exclusive video, discover new music, play the hottest games, hang out with your friends - and get rewarded for just about EVERYTHING you do on the site.

Our mission is to be your daily habit, not a site for your parents or grandparents looking for their long-lost friends from Kindergarten."

Lockerz is the next coup from Liberty Interactive, a home shopping and e-commerce conglomerate who also happen to maintain a majority stake in live shopping leaders such as QVC or Backcountry.
After several acquisitions in recent time, this time it is a start up:

 

"Lockerz aims to be the destination for generation Z where commerce, content, and community converge."

Liberty CEO Greg Maffei didn’t say much about Lockerz at the last quarterly results presentation - only that he wants to continue exploring shopping concepts which link well to a fan community:

"On acquisition opportunities, we have been pretty much constantly looking for eCommerce opportunities. The last four years, we found four decent sized acquisitions and the couple or three tuck-ins that have worked well into those.

Because that has been difficult and if you look at the universe of eCommerce companies, pure eCommerce company, certainly that’s not a huge universe between $50 million and say $5 billion a market cap and particularly ones that we would find attractively strong management teams, define niches, (inaudible) advantages in their business model and protections around Warren Buffett mode type things.

Those are not, at time it does and in particularly when you want a reasonable price. There has been a whole change obviously in the blending kind of a content commerce and community that have only made some of that harder because a lot of those have had very large multiples and have more speculative business models.

That having been said, we continue to look and we remain bullish on some opportunities and we’ve also taken a couple of tracks like Right Start when we purchase something out of bankruptcy or LOCKERZ where we funded an entrepreneur a little more venture capital type opportunity to try and create a wholesale version of something like that rather than buying at retail."

Lockerz is a shopping extravaganza for the next generation and combines many live shopping and community elements which have been expounded upon lately here at Exciting Commerce. In particular, proprietary currencies:

"One other thing you'll love about Lockerz are PTZ (or "Pointz"). PTZ are Lockerz' proprietary loyalty "currency" that you earn whenever you buy, watch, play, share, invite friends, or even just show up on Lockerz. Redeem PTZ at the PTZ Place for incredible prizes, great products and dream experiences."

At the moment, Lockerz is battling with systems and processes to keep up with the continuous stampede of users. And moreover the copious number of freeloaders who are diligently collecting login data.

The best approach is to keep up to date on Twitter. The CEO Kathy Savitt can be found there, who formerly worked for Amazon and American Eagle Outfitters.

The concept in layman’s terms to be found in the FAQ.

Related posts:

• The Shop Exchange: QVC Parent Takes Over BabyStyles/TheRightStart
• Backcountry Launches Sixth Live Shopping Spinoff
• Backcountry Launches Chainlove, Its Third “One Deal at a Time” Site

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

How the Gilt Groupe Wants to De-Throne Vente-Privée

With copious capital and a risky but stringent expansion strategy, the Gilt Groupe has developed in the last 12 months into the most dangerous competitor to Vente-Privée.

Gilt boss Susan Lyne made good on all of her announcements at the Shop.org conference and has launched a series of Gilt spin-off websites:



Beside Gilt, there is now Gilt Fuse, Gilt Man (including wine club) and Jetsetter. In preparation still is Gilt Home. Gilt Groupe is the first private shopping club company to consistently apply a decentralized approach and so quickly occupy strategically important market segments.

In an earlier IWB column (GE/EN), Exciting Commerce’s Jochen Krisch already highlighted several reasons why Gilt has the best chances of success.

While Vente-Privée balks at going overseas and Brands4Friends hasn’t yet gotten past Austria (see press release, GE/EN), Gilt has already secured Gilt Japan and has announced expansion in other countries (not France).

Even if Techcrunch doesn’t tire of spreading rumours about Amazon or eBay having concrete interest in Vente-Privée, the better takeover candidate by far would rather be the Gilt Groupe - the more so while Vente-Privée is so connected with the personalities of its founders.

Aside from that, such rumours are being used by VCs who want to quickly see results from their private sales club investments.

Related posts:

• The Shop Exchange: $40 Million for US Shopping Club Gilt Groupe
• GSI Grabs RueLaLa/SmartBargains for $350 Million
• Three US Online Shopping Clubs Want To Exceed $100 Million

Originally posted in German by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.

Supernova 2009: Change Networks and The Big Shift

Last week, Exciting Commerce’s Jochen Krisch was on site at the Supernova Conference in San Francisco (videos of the event). Tweets from the conference to be found on Twitter @jkrisch (#sn09).

The event attracted as usual an impressive number of well-known researchers and experts. Topic of discussion revolved around “Change Networks / Change in the Network Age”:

"In today's world, the overwhelming message we receive is that it's time to "connect or bust". Depending on your viewpoint, this either offers tremendous opportunity or elicits fear and confusion."

One of the highlights of the first day was a presentation from Hollywood veteran Peter Guber (Mandalay Entertainment), who described from the point of view of a creative person what is changing and why technology cannot be a goal in itself.

Chris Anderson held for the first time a talk on the topic of “Atoms are the New Bits”, where he revealed how social networking is affecting real life: that people collaborate together also much better offline and as an example, can together create new products.

One of the most thought provoking moments of the first day came from social networking expert Danah Boyd. She took the position of Adam Greenfield (Nokia) which describes that via technological advance (social networking tools, surveillance cameras and other sensors), cities are losing their status as anonymous retreats and in contrast, a level of obscurity formerly only found in the “big city” can now be found in the rural areas.

Boyd highlighted an example from her book “Out in the Country: Youth, Media and Queer Visibility in Rural America”. Young gay and lesbians living in rural areas can nowadays live a more confident lifestyle, because they can take refuge in online networks.

One of the most exciting and radically visionary parts of the conference was surely the Opening Plenary Session on the second day, with notable speakers such as John Hagel (“The Big Shift”), and Umair Haque and Ellen Levy from LinkedIn. The session revolved around how institutions (companies, educational organizations, etc.) have to adapt to be able to survive in a connected world:

"Our institutions are built upon infrastructures that cannot absorb digital networks much less re-tool around them.  Large organizations will exist but they will be fundamentally different in structure and priority from how they operate today. 



Knowledge flow, not information flow.  Relationships, not just transactions.  The rationale of connecting people, not just the ability to do so.  Context as well as content.  Corporate infrastructures will not be the competitive differentiators they once might have been unless they invent new ways to create trust in relationships."

The thesis from John Hagel is best seen separately (either the keynote from the eBay DevCon or the multi-part Supernova interview from the summer).

In the subsequent debate, the panel members didn’t prophesize the doom of the corporation, but rather asked how a company would need to look like in the future. Must companies move towards flexible employee networks or will new and stable corporate structures crystallize which will meet the new requirements?

John Hagel’s “Shift Index” for a variety of industries is available online (PDF). 

Originally posted as two articles in German (1, 2) by Jochen Krisch, adapted for excitingcommerce.com by Jason Soo.