Posts from marketplaces

Etsy’s Valentine’s Day Party

Yesterday, on Valentine’s Day, Etsy invited press to its headquarters in Brooklyn and took the covers off a bunch of things they have been working on for most of last year and will launch shortly. For those that don’t know, USV was one of the first investors in Etsy and I have been on the Board of Etsy for over a decade now.

Here are the details of what they talked about and showed yesterday:

Etsy Studio – This is a brand new marketplace, built from the ground up, to allow makers of craft supplies, large and small, to reach crafters all around the world. Etsy Studio will compete with retail stores like Michaels and others but with ~200x the inventory. A typical retail craft store will carry 30,000 to 40,000 SKUs. Etsy Studio will carry 8mm SKUs at launch.

Etsy also plans to bring the “joy of crafting” to Etsy Studio with its signature design and ease of use, but also with content and projects that connect what you want to make with the supplies you need to make it.

Etsy Studio will launch in April.

Etsy Shop Manager – Over the years Etsy has offered sellers the opportunity to use Etsy tools in a variety of places. They can use them on Etsy.com, they can use them in a craft fair with Etsy’s mobile apps and card reader, they can sell on their own website powered by Pattern, and soon, they can sell on Etsy Studio. And sellers can use Etsy’s advertising services, payment services, and shipping services on most of these sales channels.  If you follow this trend, it is clear that Etsy wants to help sellers sell wherever they want to sell. Etsy Shop Manager is an entirely new interface for sellers to manage their business. It puts all of the Etsy seller tools in one place and helps sellers decide which tools and which sales channels to use to grow their business.

There are a bunch of other things Etsy has been building to make all of this work like structured data and search, a new and better way to manage inventory, and the ability to check out with as many items in your basket as you want.

Since I started working with Etsy over ten years ago, they have been committed to a single idea – that there is an emerging economy of creative entrepreneurs who power a personal form of commerce that is better for everyone. Here are some stats that show the power of that idea:

  • Today, there are active Etsy sellers in 99% of the counties in the US and almost every country in the world.
  • Half of Etsy sellers start their shops to meet a financial need.
  • 87% of Etsy’s creative entrepreneurs are female.
  • Etsy’s 1.7 million sellers are able to create jobs and incomes for themselves and build value in their communities by connecting with 27 million buyers all through the Etsy platform.

Companies like Etsy don’t come around that often, but when they do, I am drawn to them. They are mission driven and they make things happen that need to happen. It’s very fulfilling to work with companies like this.

Ticket Bots

New York State put a law on its books this week making operating “ticket bots” illegal:

using ticket bots, maintaining an interest in or control of bots, and reselling tickets knowingly obtained with bots constitutes a class A misdemeanor. As such, violators could face substantial fines and imprisonment

As someone who has often lost out on tickets and was forced into the secondary market at double the price (or more), I appreciate the effort here to curb this abuse of the system.

But I do wonder if there are technical or market based solutions that would be more effective. And I wonder how New York State is going to enforce this new law.

A market based solution could be some sort of auction mechanism that effectively sells the tickets at “market value” and takes the profit out of scalping. Of course the effect of that might be to increase the cost of tickets to everyone and that might not be ideal. If that were paired with some sort of discount for fans and/or fanclub members, you might be able to keep the prices affordable for real fans and take the profits out of the scalping business.

Anyway, I am not griping about this new law. It could help at the margin. But I do yearn for a more elegant and market based solution that fixes the issue more systemically.

Shop Differently This Holiday Season

It’s Black Friday, the official start of the holiday shopping season. Here at AVC, we recommend shopping where you can find unique items that allow you to express your individuality. Etsy.com, of course.

Wattpad Studios

One of the things I am most proud of about our portfolio at USV is that we have invested in a handful of companies that are slowly but surely changing the way content creators reach their audience and make money doing that. I like to think of it as the evolution of the studio model that has prevailed in content for as long as I’ve been alive. Some of the companies that would fit into this category are Kickstarter, SoundCloud, YouNow, Splice, VHX, Mediachain, and Wattpad.

Wattpad is one of the most interesting of the bunch. Wattpad is a community of readers and writers that operates natively on the web and mobile devices. It is, along with Kindle and Audible, one of the “big three” in the Books category on mobile phones.

Wattpad has a global monthly audience of 45mm people, mostly young and trending female, that read stories that are written on Wattpad for the community of readers that is there. That’s a big number. And that has gotten the attention of the film and television business. In 2014, Wattpad author Anna Todd’s serialized story After (over 1.3 billion reads and more than 6 million comments) was optioned by Paramount and is now being developed into a feature film (it has also been published as a book by Simon & Schuster).

So Wattpad has created Wattpad Studios to help other authors on Wattpad do the same thing. And yesterday Wattpad Studios announced a partnership with Turner to create stories for Turner’s Tales From The Crypt.

The global internet allows anyone to be a writer and anyone to be a reader. The stories that emerge from this community powered content creation and consumption model on Wattpad are rich and diverse. And so it makes a ton of sense that Wattpad would help these emerging storytellers reach a broader audience through the power of film and television. This should be a good service to the Wattpad writer community and a good business too.

Video Of The Week: Creative Communities

I was surfing around YouTube today looking for something to watch (and post) this morning. I found this video with two of my favorite people, Esther Dyson and Chad Dickerson (Etsy’s CEO). This video is more than a year old so the data in it is not current. But the lessons on scaling and managing a creative community remain as relevant today as they were when they had this conversation.

Feature Friday: Customized 3D Printed Objects

Our portfolio company Shapeways offers customization options in their marketplace of 3D printed objects.

Let’s say you want a “card case” for your iPhone like this:

The 3D designer who designed this case and is selling it on Shapeways offers two ways you can customize it:

customization options on shapeways

You can search for customizable objects on Shapeways by checking this box in the marketplace home page:

check box

Shapeways is a great place to find unique objects for gifts and for yourself.  Customizing these objects makes them even more unique. So the next time you are looking for something special, go check out Shapeways and check the customizable box.

And if you are a 3D designer who sells designs on Shapeways, considering supporting customizable options. It makes your objects even more unique and interesting to buyers.

What Is Going To Happen In 2016

It’s easier to predict the medium to long term future. We will be able to tell our cars to take us home after a late night of new year’s partying within a decade. I sat next to a life sciences investor at a dinner a couple months ago who told me cancer will be a curable disease within the next decade. As amazing as these things sound, they are coming and soon.

But what will happen this year that we are now in? That’s a bit trickier. But I will take some shots this morning.

  1. Oculus will finally ship the Rift in 2016. Games and other VR apps for the Rift will be released. We just learned that the Touch controller won’t ship with the Rift and is delayed until later in 2016. I believe the initial commercial versions of Oculus technology will underwhelm. The technology has been so hyped and it is hard to live up to that. Games will be the strongest early use case, but not everyone is going to want to put on a headset to play a game. I think VR will only reach its true potential when they figure out how to deploy it in a more natural way.
  2. We will see a new form of wearables take off in 2016. The wrist is not the only place we might want to wear a computer on our bodies. If I had to guess, I would bet on something we wear in or on our ears.
  3. One of the big four will falter in 2016. My guess is Apple. They did not have a great year in 2015 and I’m thinking that it will get worse in 2016.
  4. The FAA regulations on the commercial drone industry will turn out to be a boon for the drone sector, legitimizing drone flights for all sorts of use cases and establishing clear rules for what is acceptable and what is not.
  5. The trend towards publishing inside of social networks (Facebook being the most popular one) will go badly for a number of high profile publishers who won’t be able to monetize as effectively inside social networks and there will be at least one high profile victim of this strategy who will go under as a result.
  6. Time Warner will spin off its HBO business to create a direct competitor to Netflix and the independent HBO will trade at a higher market cap than the entire Time Warner business did pre spinoff.
  7. Bitcoin finally finds a killer app with the emergence of Open Bazaar protocol powered zero take rate marketplaces. (note that OB1, an open bazaar powered service, is a USV portfolio company).
  8. Slack will become so pervasive inside of enterprises that spam will become a problem and third party Slack spam filters will emerge. At the same time, the Slack platform will take off and building Slack bots will become the next big thing in enterprise software.
  9. Donald Trump will be the Republican nominee and he will attack the tech sector for its support of immigrant labor. As a result the tech sector will line up behind Hillary Clinton who will be elected the first woman President.
  10. Markdown mania will hit the venture capital sector as VC firms follow Fidelity’s lead and start aggressively taking down the valuations in their portfolios. Crunchbase will start capturing this valuation data and will become a de-facto “yahoo finance” for the startup sector. Employees will realize their options are underwater and will start leaving tech startups in droves.

Some of these predictions border on the ridiculous and that is somewhat intentional. I think there is an element of truth (or at least possibility) in all of them. And I will come back to this list a year from now and review the results.

Best wishes to everyone for a happy and healthy 2016.

Feature Friday: Etsy Shop Updates

Our portfolio company Etsy launched a super cool feature called Shop Updates a few weeks ago that I would like to talk about today.

Etsy sellers have always been great marketers. They bring buyers to their shops on Etsy in a myriad of ways. I remember back in the early days seeing Etsy sellers promoting their shops face to face at craft fairs. They still do that, of course, and much more.

Social networks are an obvious place for sellers to reach new buyers and Etsy sellers are all over them. But it hasn’t been that easy for a seller to be creative on social networks. Posting a link to their shop on facebook, or tweeting or pinning their latest item is fine. But doing that over and over quickly gets boring for everyone.

Enter Shop Updates. They allow a seller to take photos of their items in the real world and share them on social networks and into the Etsy mobile apps with links back to their shops and item pages.

An example will be illustrative.

Glittery Moon Vintage has this porcelain vase for sale on Etsy.

porcelain vase

She can post that image to facebook, pinterest, twitter, and instagram and get buyers to come and take a look.

But with Shop Updates, she can take a picture of that vase in the real world and post it to facebook or some other social net.

vase on fb

My favorite thing about this feature is the orange shopping tag that signifies that the shared image is “shopable” or “clickable”. You click on that orange tag and are taken to Etsy where you can look at the item and buy it.

These items also show up in the Etsy app to everyone that has liked your shop. Here’s a screenshot I took of my Etsy app this morning:

Screenshot_2015-11-06-06-32-17-2

Here are some more details on Shop Updates in case you want to learn more.

So don’t be surprised if you start seeing orange tags showing up in your Twitter feed, your Facebook feed, your Pinterest app, and your Etsy app this holiday season. Shop Updates also show up in Instagram without the orange tag because Instagram doesn’t make their images clickable.

And when you see those tags, you should think about clicking and buying something unique and special for your loved ones this holiday season!

The Decentral Authority

We’ve been big fans of Reddit since it was part of the first Y Combinator class ten years ago this summer. We’ve watched closely as it emerged as a community powered mostly by its users. There was a period when the entire company was one or two developers. And yet not only did Reddit survive that period, it actually thrived during it. It is a quintessential example of the lightweight people powered app that we look for and love at USV.

The growing pains that Reddit is going through as it evolves into something more are particularly interesting to us. We’ve always wondered if a people powered community that is owned as much by its users as anyone can work as a traditional corporate entity. We’ve been through similar situations in our career (Geocities and Twitter among them) and we know how hard it is to reconcile the needs of the users, the management, and the shareholders.

I am not going to come down on the side of any of these stakeholders in this current situation. They all have very valid needs and desires and there are no easy answers to the struggle that Reddit faces. I am particularly sympathetic to the need to manage the trolling activity. Twitter also struggles with this issue. Free speech has an ugly underbelly and when you stare at it up close and personally, it makes you want to puke. And yet where do you stop on the slippery slope of deciding what is acceptable and what is not?

We have also wondered what the first killer app of the blockchain is going to be. Is it going to be personal finance (bitcoin), is it going to be peer to peer connectivity (mesh networking), or is it going to be something else?

There’s a chance that the answer to the struggle that Reddit is going through will also answer this question. It may be that there is no viable middle ground between a centrally controlled media platform and an entirely decentralized media platform. You are either going to police the site or you are going to build something that cannot be policed even if you want to.

The interesting thing about an entirely decentralized media platform is that you can have clients that choose to curate, police, and censor and clients that choose not to. Twitter, as originally architected, could have headed down this path. But for many reasons, reasons I supported to be clear, it chose not to.

But someone is going to go there. And I think it will happen soon. And I think it most likely will be built on the blockchain. There have been plenty of attempts to do this before. And none have succeeded. So why now?

Well for one, the blockchain is here and waiting for its killer app. And there are no shortage of entrepreneurs who want to build it. And platforms like Twitter, Reddit, 4Chan, and others have fed the desire to have something more but for reasons that are entirely valid are coming up empty for some.

The demand is there. The supply (technology) is there. And we’ve seen a bunch of teams working on this. I think one or more will get it right. And I think that will happen soon.

To be clear, this does not mean the end of Reddit or Twitter or any other of the current media platforms that are out there. They will likely move more and more into a centrally controlled media platform. I think that is the natural evolution of platforms that need to cater to the needs of management and shareholders. There is a good business to be had in a centrally controlled platform.

But there is also a very interesting opportunity to build a truly decentralized media platform. I am not sure it will be a good business. I am not sure it will even be a business. But it can be a very powerful community and platform. And there is a market for that. A big one I think.