3 Shocking Realities My Wife’s Etsy Shop Reveals About Digital Transformation

Etsy and Digital Transformation

Etsy is an online marketplace for people who make hand-made products to sell.  My wife runs a successful Etsy shop and sells baby bows.  Her logic is that people are always making babies and people are always looking to buy gifts for those babies.  Makes sense to me.

She brings her talent to the table and makes the physical product.  Etsy pretty much does the rest.

1. Platforms Are Taking Over

Etsy’s platform approach exploits the “Network Effect”. 

According to Investopedia,
The network effect is a phenomenon whereby increased numbers of people or participants improve the value of a good or service. The Internet is an example of the network effect. Initially, there were few users on the Internet since it was of little value to anyone outside of the military and some research scientists.

However, as more users gained access to the Internet, they produced more content, information, and services. The development and improvement of websites attracted more users to connect and do business with each other. As the Internet experienced increases in traffic, it offered more value, leading to a network effect.
Source: https://www.investopedia.com/terms/n/network-effect.asp 

The easiest way to translate this to my wife’s experience, she makes a quality product and can sell them as fast as she can make them because of the exponential growth of buyers the platform supports.  The more it grows, the more competition it fosters among the sellers, and the customer experience continues to get better and better.  

And traditional business models are supposed to keep pace?…not likely.   The power and the speed of the platform to connect buyers and sellers is overwhelming. 

2. The Risk and Reward Gap is Narrower for Individual Talent 

Perhaps, Etsy is the answer to anyone who’s been the butt of a joke where the punchline is “good luck with your Degree in Fine Arts”.  This is apropos because my wife did indeed get a Fine Arts degree in college.  But, I guess she gets the last laugh because while her shop isn’t making her a millionaire…it’s a pretty sweet lifestyle business that eliminates the cost of daycare and makes her schedule open for whatever, whenever. 

Platforms like Etsy level the playing field and make it much easier for individuals to exploit their talents and strike out as a solopreneur.  The platform takes care of marketing, sales, financial transactions, statements, shipping labels, shipping fees, tax documentation, receipts, customer communications and much more. 

And my wife pays nothing out of pocket for all of this.  That’s not to say Etsy is not getting paid because believe me they are.  Etsy charges for listing fees , shipping fees, generic sales fees, and transaction fees.  All coming out of the revenue of a sale…much more warm and fuzzy feeling than straight out of pocket fees.  

They also caught the attention of Wall Street.   NASDAQ: ETSY 

Before I go astray, the point here is that platforms like Etsy now give individuals all the tools they need to succeed at prices affordable to individuals.  Just a few decades ago, only large companies could afford this kind of sophistication.       

This democratization of digital tool sets further emphasises the point that companies need to take digital transformation very seriously because the competition for talent will get more and more fierce as individuals have more options.  

3. Digital Conversations Are Not Only Accepted But Preferred

One of the most astonishing things I’ve witnessed over the years is this….She’s never actually “talked” to a single customer, ever!!!

It’s all digital interactions and communications.  

Now, I’m not saying that will become the new normal or that it’s even possible in a complex solutions selling atmosphere but I do think digital communications will take a larger role in the processes.  It will behoove organizations to explore ways to become more fluent in speaking digital. 

In conclusion, my wife’s Etsy experiences makes it clear to me that the momentum and advantages of digital transformation is favoring the individual.

Now more than ever, larger organizations need trained and skilled guides to help them to become agile, to compete and thrive in the new economy.  

Get this FREE Guide to Help Upgrade Your Digital Business Transformation Management Capabilities. 

Bezonomics: Spinning the AI Flywheel

How influential is Amazon’s business model in our society today?

Brian Dumaine, the author of Bezonomics asked an acquaintance working at Bain & Company…would you like to co-author a book on how to compete with Amazon?

The acquaintance replied…we are making so much money consulting our clients on that very subject…why give away the secrets?

Reference: Bezonomics: How Amazon is Changing Our Lives and What the World’s Best Companies Are Learning From It …by Brian Dumaine

Bezos Day 1 Credo

  • Find your passion to invent
  • Always think long term
  • Be very, very customer-centric

What is Amazon’s Flywheel?

The Amazon Flywheel  is a strategy that creates a virtuous cycle by leveraging a an exceptional customer experience to drive traffic to the platform and and its third-party sellers.

This improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which attracts more traffic which spins the flywheel faster as it continues to grow larger over time.

Artificial Intelligence (AI) and Machine Learning models are still in developmental stages at best for most companies…

Amazon is the real deal and pioneered the new business model for the 21st century,

Amazon consumes unprecedented levels of customer data and applies Artificial Intelligence and Machine Learning algorithms to become a self-learning business model.

As Amazon learns more about the customer’s needs, wants, and desires…it begins to make more accurate product recommendations.

Customer satisfaction increases…as do the sales…and the flywheel spins faster.

Amazon Integration – a personal Inventory

While writing this post, I paused to think about how much Amazon is involved in my everyday life…

-Amazon Kindle Fire tablets (around the house and under car seats?), some screens cracked, some not, some in use, some not…I can’t even remember when I bought them or if they were Christmas gifts.

AWS: Switched from studying for Cisco certification to AWS Certified Cloud Practitioner midstream.

Prime Video: Originally built to be an incentive to get you to sign up for Amazon Prime (worked on us), now my wife and I are working our way through The Man in the High Castle.

Prime Music: Driving home from Pittsburgh (2.5 hour drive), was having fun with free version (2 million songs) of Prime Music. Using Alexa voice commands to request tunes….9 out of 10 songs I wanted were available…I got pissed off when Neil Diamond’s – Sweet Caroline was not on the free verson…

What else could I do?

Alexa recommended I verbally request a 30 day trial of the full version of Prime Music…

So I did…

I listened to the songs I wanted…my credit card was charged 30 days later and it’s still a digital service I enjoy today…

Customer-centric…yes. Amazon makes it too easy to not buy.

Next Up

Whole Foods and The Last Mile -2 Day Delivery…1 Day Delivery…how about fresh food within hours?

Logistically “the last mile” is the most difficult. How does Amazon plan to tackle this endeavor?

By vertically integrating Fleet Operations and creating business opportunities leveraging it’s backbone technology of course.

Naturally, this is a pilot for electric powered and eventually autonomous self-driving fleet delivery vehicles.

And beyond

Staying true to his Day 1 Credo, Bezos is thinking long term with his Blue Origin project. For the purpose of …Colonizing the Moon…not even going there.

I guess when you’re the worlds richest person, life gets boring here on Earth?

Wrap up

My book summaries are biased from the start because I wouldn’t publish them if I didn’t like the book. Having said that, Bezonomics was a great read/listen.

It’s not all apple plums and cherry blossoms, Bezos does come under fire for accusations about stressful labor conditions which the book covers in great detail. Also, with a company growing as such speed and scale, Anti-Trust and Government opposition becomes inevitable…also covered well in the book.

Despite these things, I’ve come to two conclusions after listening to this book:

  • It’s great being a customer of Amazon.
  • All business’s need to get started on their own Flywheel and start spinning.

Bruce Sinclair’s IoT-Inc: Key Takeaways to Win in the Outcome Economy

IoT’s Blueprint for Creating Business Value

Book cover for 'IoT Inc. How Your Company Can Use the Internet of Things to Win in the Outcome Economy'
IoT Inc. – Key Takeaways
IoT Inc. is the definitive guide to the Internet of Things for business minded professionals.  

It covers all the technical aspects you would expect but more importantly delves deep into the business value of the IoT.

The book clearly explains how products, platforms, and ecosystems work together to create the Outcomes Economy that will ultimately yield the "trillion-dollar market-size projections typically attributed to the Internet of Things".   
  
 
REFERENCE:
IoT Inc: How Your Company Can Use the Internet of Things to Win in the Outcome Economy by Bruce Sinclair

key takeaways

  • IoT Inc. starts with and goes deep on the topics near and dear to business manager’s heart…business value, monetization, and strategy. Frankly, by first establishing the value proposition in these key areas…the technology aspects of IoT make a hell of a lot more sense.

  • In Digital Transformation circles most folks agree that it is Business Models not Products that drive true competitive advantages. IoT Inc. gives great detail for each model and the advantages specific to the IoT on a journey through the “IoT Business Model Continuum”.

  • IoT Business Models
    • Product Only: safe starting point, IoT augments functionality.
    • Product-Service: ex. adding information service from collected data increases value.
    • Service: ex. Rolls-Royce jet engines, customers down’t want to own and maintain jet engines, they want propulsion for their planes. Trade a huge capital expense for recurring fee.
    • Service-Outcome: seller becomes a business partner. ex. improve efficiency of a large turbine wind farm and share the upside.
    • Outcomes: king of IoT business models, pays out based on improving the P&L. ex. John Deere & AGCO…”these competing ecosystems bring together farming machinery, seed management, irrigation, and weather data to sell farmers outcomes of higher crop yields at lower costs”.

  • IoT Inc. explores the IoT’s operational changes that affect every department:
    • Engineering – All efforts that create Intellectual Property (IP) should be moved in-house
    • DataData science and analytics will become fundamental to all industries.
    • Manufacturinggets folded into engineering because of software/hardware connection
    • Business Development leverages a new view into customer’s product usage
    • HR hire new titles. IoT full-stack developers are a prize.
    • Legaldata privacy.

  • IoT Inc. is not a technical manual but in my opinion it does a nice job with it’s explanation of the technical stuff…covering sensors, embedded systems, software, cloud and even APIs to drive additional value from IoT ecosystems.

wrap up

IoT Inc. How Your Company Can Use the Internet of Things to Win in the Outcome Economy is the first of it’s kind to uncover every stone as it relates to the Business Value of IoT. I fully concur with Bruce as he states, “IoT’s greatest challenge isn’t technical; it’s business”. Within it’s pages, company leaders will find a practical guide and blueprint for creating business value with IoT and yes…making money!


Interested in IoT related careers? Free IoT Career Playbook