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.
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