I feel a business that doesn't get mentioned that often around here is Etsy. While the money raises and investors behind it can be read about on Tech Crunch, not much is mentioned about the business.<p>Thought I would get some discussion going on it:
-How do you feel Etsy was able to overcome the Chicken and the egg problem?
-Were they able to just find a great market that was being underserved by eBay?
-Do you see other markets that could flourish by being "spun" out of eBay?
-How were they able to market themselves to not only shopkeepers but consumers as well?<p>I am sure there are other good questions as well..
Over 90% of Etsy users are women. Their market isn't underserved by just eBay–but rather the entire web.<p>My wife loves Etsy. She's tech-savvy, loves to craft, loves fashion, and loves to shop.<p>My guess is they overcame the chicken/egg problem because a lot of their sellers are also buyers–which allowed rapid initial growth. Mix in some good PR, people complaining on Ebay forums, VC connections, and there you go.
Etsy tapped into one of the most passionate communities out there, which happened to be on eBay not by choice, but by necessity. If you want to find opportunities, I'd say look at who is using eBay, Amazon, etc. (as a platform) out of necessity due to a lack of alternatives. Once you find those niches, you've already established that there is a market, and if you design a product for that community, customer acquisition should be directly related to the quality of your product.
Etsy has three revenue sources: a 20 cent listing fee, a 3.5% sales fee, and an in-site ad system named Showcase.<p>Their board is Jim Breyer, Fred Wilson, Caterina Fake and Rob Kalin (founder, CEO).<p>They are profitable as of earlier this year, founded in 2005, based in Brooklyn, and put on a good show fo' sho'.
My 2c on Etsy. My mother is a freelance artist by trade and I witnssed a radical change in her web savvy and understanding in her first 6 months on Etsy. The reason was that she was participating in the Etsy community forums which provide a lot of technical direction. Generating facebook leads, optimal posting strategies, how to make white backgrounds on photos of inventory, etc. In short, they have a passionate self-training community that increases seller efficiency rather than just punishing the inefficient.<p>One odd side effect of this passion and sense of community is that sellers see selling on Etsy as a hobby rather than a profession, and their effective compensation reflects this.
Etsy does really creative product search - it might be the best site out there. <a href="http://www.etsy.com/buy.php" rel="nofollow">http://www.etsy.com/buy.php</a>. It's a really fun site to navigate.<p>They probably get less attention in the tech space because their user base is mostly women.
One interesting tidbit about Etsy is that the most successful sellers are the ones selling supplies to the crafters.<p>As an aside, if you are in the market for an external hard drive, this is the most beautiful one I have ever seen: <a href="http://www.etsy.com/listing/47397822/walnut-and-maple-wood-external-500gb" rel="nofollow">http://www.etsy.com/listing/47397822/walnut-and-maple-wood-e...</a> (I'm not affiliated with that seller in anyway, I just dig his product).
They also completely bypass the chicken/egg problem. The site can work with a small number of sellers. If I'm an artist I can set up a store on etsy and use it as my professional website. I then give out the etsy link to people I meet in the "real world" to buy my work online.
I would argue that Etsy didn't identify an underserved market inside of eBay but rather intelligently saw a need to service the 'flea market' circuit. Based out of Brooklyn, there's no doubt that Etsy's founders frequent places like the Brooklyn Flea and other places where jewelers, knitters, and other small time crafters hock their goods on weekends to escape their day jobs.<p>This, to me, was the win, not going after a piece of eBay's pie.<p>Rather than asking "Other markets that could flourish by being spun out of ebay," I would search for more organizations helping 'micro-entrepreneurs' (i.e. from the bedroom to a small booth rental) make their living.
Long time HN reader, but this is my first comment. My wife and I have been planning our son's 5th bday and have used etsy for the first time for party favors, labels, etc.. My experience with etsy sellers is A+. We searched ebay, craigslist, and amazon before deciding to make our purchases on etsy. Maybe, evite should team up with etsy, so I can buy my crafts for the carnival party, while I send out the evite. Hmm...maybe I just found an idea for a side-project.
They just tapped into an area -- crafting, artisan designers, etc. -- that was underserved by the market. eBay's client won't recognize these types of vendors as much as they seek out stuff like major commercial brands so the selling capacity was likely limited.<p>I don't care for etsy as a customer but it's a great company from a business standpoint.
My girlfriend used to like Etsy, but she was burned by several sellers there and now actively avoids it unless she personally knows the seller offline. It seems that their mechanisms from protecting buyers from sellers who don't perform aren't really that good.
I think these guys have also done a great job in showing how to chip away at eBay. Do you see any potential markets/customers/products that could also benefit from a dedicated site?