The P2P Revolution: Etsy, Kickstarter, Paypal, Craigslist
In opposition to Walmart's global hegemony and financial power -- the highest expression of basic corporate success to date -- we have the newest and in some ways most fascinating business model of all: the personal, customizable, one-on-one transactions of sites like Etsy and the most basic, early operations of eBay-type sites.
What the Internet gives us is the possibility of linking up with one other person, who is willing to sell us one custom or specific product, at an agreed-upon price. Add up those transactions, or aggregate them like Etsy, and you end up with more business than with one simple high-volume, high-demand product. When people refer to the "long tail," that's what they're talking about: While a bestseller may do brisk business for an online bookseller, for example, on any given day the bookseller is making way more money on the total of items they're selling for which there is less demand.
Sites such as the one-of-a-kind craftseller aggregator Etsy, the T-shirt design site Threadless and micropayment sites like Kickstarter and Donors Choose all operate on this concept: Even a single, customized, one-of-a-kind piece of art is worth enough, in the long tail, to make the sites worthwhile. That means doing business with likeminded, single individuals and knowing where your money is going.
Never before in human history have we had this capability to shop, pay for, ship and deliver such a grand assortment of merchandise. Even 10 years ago, the idea of a person-to-person (p2p) economy of art goods or books that is commonplace today would have been unheard of. Thanks to the Internet, p2p commerce is now a real idea, and one that is quickly becoming the most influential of all, as other business models begin to change and shift to incorporate its qualities into their own.
Without the threat of person-to-person sales, for example, would businesses ever have gotten so obsessed with involving themselves in our social networking? Something worth thinking about.
More Great Links
- Agrawal, Rocky. "Why Groupon Is Poised For Collapse". Tech Crunch, Jun 2011. (Dec. 4, 2011) http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/
- The Apple Loop. "Monograph On The Apple Business Model." The Apple Loop, 2003. (Dec. 4, 2011) http://www.theappleloop.com/Home/monograph.html
- Aston, Adam. "The World's Most Influential Companies: Wal-Mart." BusinessWeek. Dec. 22, 2008.
- Baratz, Debbie. "Here's Why Groupon's Business Model Looks Eerily Like a Ponzi Scheme". Wall Street Cheat Sheet, Nov 2011. (Dec. 4, 2011) http://wallstcheatsheet.com/stocks/heres-why-groupons-business-model-looks-eerily-like-a-ponzi-scheme.html/
- Bennett, Colette. "Small Business Model - Etsy PDF to Print". Colour Lovers Business Blog, May 2011. (Dec. 4, 2011) http://www.colourlovers.com/business/blog/2011/05/11/small-business-model-etsy-pdf-to-print-featuring-dolls-and-daydreams
- Blum, Jonathan. "Happy Customers - And No Service Staff". CNN.com, May 2008. (Dec. 4, 2011) http://money.cnn.com/2008/05/19/smallbusiness/customer_service.fsb/index.htm
- Breen, Bill. "Living in Dell Time." Fast Company.com. Dec. 19, 2007. (Dec. 4, 2011)
- Carpenter, Steven. "TechCrunch Teardown: Etsy's Business Model". Tech Crunch, Sep 2010. (Dec. 4, 2011) http://techcrunch.com/2010/09/11/tc-teardown-etsy/
- Cheyfitz, Kirk. "Thinking Inside the Box." Simon and Schuster, 2003. (Dec. 4, 2011)
- Cohen, William A. "A Class with Drucker." AMACOM Div American Mgmt Assn, 2008.
- Duesterberg, Thomas J. "The Apple Business Model Is Good for US Manufacturing". Huffington Post, Nov 2011. (Dec. 4, 2011) http://www.huffingtonpost.com/thomas-j-duesterberg/us-manufacturing-apple_b_1072089.html
- Elgan, Mike. "Google's Business Model: YOU Are the Product". Internet Business Models.org, Feb 2009. (Dec. 4, 2011) http://itmanagement.earthweb.com/article.php/3801006/Googles-Business-Model-YOU-Are-the-Product.htm
- Enos, Lori. "The Priceline Model Is Right - Or Is It?" Tech News World, Jun 2001. (Dec. 4, 2011) http://www.technewsworld.com/story/11159.html
- Hansell, Saul. "A Big Bet on Kayak for Travel Search". New York Times, Dec 2007. (Dec. 4, 2011) http://bits.blogs.nytimes.com/2007/12/21/a-big-bet-on-kayak-for-travel-search
- Holzner, Steven. "How Dell Does It." McGraw-Hill Professional, 2005.
- Levy, Steven. "The Secret of Googlenomics". Wired, May 2009. (Dec. 4, 2011) http://www.wired.com/culture/culturereviews/magazine/17-06/nep_googlenomics
- Magretta, Joan, et al. "What Management is." Simon and Schuster, 2002.
- Marks, Eric A. "Business Darwinism: Evolve Or Dissolve, Adaptive Strategies for the Information Age." John Wiley and Sons, 2002.
- Martin, H. Lee. "Techonomics." CRC Press, 2006.
- McGrath, Rita. "Groupon's Business Model Is Leaking". Oct 2011. (Dec. 4, 2011) http://blogs.hbr.org/hbr/mcgrath/2011/10/groupons-business-model-is-lea.html
- Miller, Kerry. "An eBay For The Arts And Crafts Set". Business Week, Jul 2007. (Dec. 4, 2011)
- Mourdoukoutas, Panos. "Is Groupon's Business Model Sustainable?". Forbes, Oct 2011. (Dec. 4, 2011) http://www.forbes.com/sites/panosmourdoukoutas/2011/10/22/is-groupons-business-model-sustainable/
- ibid. "Can Google replicate Apple's business model?". Forbes.com, Aug 2011. (Dec. 4, 2011) http://www.forbes.com/sites/panosmourdoukoutas/2011/08/15/can-google-replicate-apples-business-model
- Plotkin, Hal. "Priceline Business Model Seen Flawed". Plotkin.com, Oct 2000. (Dec. 4, 2011) http://www.plotkin.com/cnbcs164.htm
- Reeves, Jeff. "Can Apple Business Model Save JC Penney?" Investor Place.com, Nov 2011. (Dec. 4, 2011) http://www.investorplace.com/2011/11/jc-penney-ceo-ronald-johnson-jcp-apple-aapl/
- Roncal, Jose D., et al. "The Big Gamble." Wheatmark, Inc., 2008.
- Rossoff, Matt. "Google's Business Model Is In Conflict With Your Privacy". Business Insider, Nov 2011. (Dec. 4, 2011) http://articles.businessinsider.com/2011-11-02/tech/30349396_1_google-docs-user-data-google-and-microsoft
- Sande, Steven. "Kayak's business model upended by iPhone." Tuaw. Dec 14th 2009
- Schonfelt, Erick. "HOW TO: Exploit Innovation." Business 2.0. Dec., 2004. Vol 5, Issue 11, p. 104 - 105.
- Stewart, Thomas A. "The Institutional Yes." Harvard Business Review. Oct., 2007. Vol. 85, Issue 10, p. 74 - 82.
- Sundelin, Anders. "Business Model Example: Etsy - Mass Customization of Arts & Crafts". Business Model Database, Dec 2009. (Dec. 4, 2011) http://tbmdb.blogspot.com/2009/12/business-model-example-etsy-mass.html
- Yu, Roger. "Travel Q&A: Five questions with Kayak CEO Steve Hafner". USA Today, Dec 2008. (Dec. 4, 2011) http://www.usatoday.com/travel/flights/2008-12-09-qa-kayak-steve-hafner_N.htm
Just 9 percent of all shopping is online, but it's growing fast. HowStuffWorks shares a few tricks retail stores are using to stay competitive.