Top Three Most Influential Persons in Online Retail

Online retail is a fast moving sector and there are lots of outstanding business leaders out there. Among the best of the best, some really stand out. The way they’ve founded their companies and directed their investments have placed them in the higher echelon of influence in online retail.

Let’s have a look at them and their stories:

No.3 Jack Ma

Net Worth: $9.6 billion
Company: AliBaba Group

Jack Ma - founder of Alibaba.com

Jack Ma – founder of Alibaba.com

Jack Ma, a former English teacher in China, got his first taste of internet entrepreneurship in 1995, when he founded China Pages, a directory of Chinese businesses. He previously worked as a lecturer in English and International trade in the Hangzhou Dianzi University.

After founding and running China pages he briefly worked for the Chinese Ministry of Foreign Trade and Economic Cooperation, between 1998 and 1999. In 1999 he founded Alibaba, a B2B marketplace connecting Chinese manufacturers to the world.

Alibaba’s spectacular growth pushed Ma and his associates to add new companies to the group. AliBaba Group now owns Alibaba.com, Taobao Marketplace, Tmall, eTao, Alibaba Cloud Computing, Juhuasuan, 1688.com, AliExpress.com and Alipay.

The company is now only outmatched by Walmart in terms of revenue. Recent developments and an increase in online retail spending have made the Chinese market the largest online retail market in the world. The big winner: Alibaba Group. Through its subsidiaries, the AliBaba Group now handles $248 billion in transactions, 84% of the total online retail market in China.

But Jack Ma is not to be stopped. He is preparing one of the largest IPO’s in American history, after failing to reach an agreement with the Hong Kong exchange. His ambition is fueled by a sense of mission to run his company as an army conquering the world:

“I had always wished that I was born in a period of war. I could have been a general, I thought about what I could have achieved in war.” – Jack Ma, AliBaba Group

All signs point to Jack Ma building the hyper company he dreamed of. He is an effective leader, running the monopoly on online retail, in the world’s future largest economy.

No.2 Larry Ellison

Net Worth: $51.7 billion
Company: Oracle, NetSuite, Salesforce, etc.

Larry Ellison

Larry Ellison

You wouldn’t think of the fifth wealthiest man in the world as one of the most influential persons in online retail. But he is. Through it’s flagship company and different personal investments, he is in control when it comes to online retail infrastructure and software.

For once, Larry Ellison is Oracle and Oracle means, first and foremost, databases. Ellison started his career working for the Ampex Corporation in 1970, on a relational database for the CIA. His designs were based on a paper written by Edgar F. Codd, called “A Relational Model of Data for Large Shared Data Banks”. The same design was implemented by IBM, but the company didn’t have time to solidify its dominance on the market. Challengers soon began to emerge.

Database deployement - Oracle leads the pack

Database deployment – Oracle leads the pack

One of those challengers was Larry Ellison’s Software Development Laboratories (SDL), founded with two partners and later renamed Oracle, based on the database Ellison developed when he was working for the CIA database.

After a long struggle against the largest competitor, IBM (which would push its DB2 and SQL/DS products) and other challengers (Informix, Sybase, Microsoft) – Oracle eventually took lead in the database war. In 2010 the European Union approved Oracle’s acquisition of Sun Microsystems. One of the most important assets Oracle got was the wide-spread, popular MySQL database.

So for one - Oracle now dominates the database market, the underlying infrastructure of connected systems and retailers worldwide.

And that’s just the begging – Oracle is currently on a purchase streak, aiming to build a strong multichannel retail presence. It is second only to Adobe Systems, with its customers registering over $200 billion in revenue in 2013.

It’s presence is split between Social marketing, ecommerce platform software, site search, customer service, personalized content and transportation management.

To give you a glimpse on how serious Oracle is about its investments in multichannel retail – they paid $1.5 billion in 2011 for Right Now Technologies, a company providing customer service software and services to the likes of Overstock.com.

Larry Ellison is also one of the major shareholders in Netsuite and Salesforce, two companies shaping the global B2B and B2C commerce future.

1. Jeff Bezos

Net Worth: $30.1 billion
Company: Amazon

Jeff Bezos

Jeff Bezos

Jeff Bezos is the one man we all picture when we think about ecommerce. He is a Princeton graduate with a degree in Computer Science. After graduating from college he pursued a career in investment banking in Wall Street, which he left to found Amazon, after noticing the fast growth in Internet usage.

He set up his company in the proverbial garage with few employees and in 1995 launched the beta version for 300 friends. Days after the launch the book selling eshop managed to ship books across US and 45 foreign countries. Yearly sales in the first year reached $510 000, much more than Bezos envisioned. The company grew and grew, survived the dot com and went on to register $74.5 billion in 2013 revenue.

By expanding the initial book selling operations into CD’s, videos and later clothing, toys, electronics, home & garden, jewelry and even art, Amazon essentially became the “everything store”. Amazon is now the biggest online retailer and a disrupting force in retail.

Everything from the ecommerce revolution to online payments, shipping and marketing has been heavily influenced by Amazon and guided by Jeff Bezos, both a star-gazing visionary and a focused micromanager.

kindle dx

The Kindle DX

In 2007 Amazon launched the Kindle which soon became a revolutionary device that changed the way we think of books and digital content. In 2013 the company hinted at the idea of using aerial drones to enable faster shipping and in 2014 it announced that it’s now testing its 7 and 8 generation aerial vehicles.

But beyond his influence in online retail and retail at large, Bezos is a special human being. A libertarian, he invested in projects most of us would consider unreal and unattainable. He was one of the first investors in Google, financed a clock that would run 10 000 years and a company that’s working on lowering space flight costs, to allow humanity to explore the great unknown.

This short list, headed by Jeff Bezos, is prone to change. The world around can change as well, partly due to these people’s and efforts. To get a deeper glimpse on how they did it and what motivates them, have a look at Jeff Bezos’ Princeton graduation address, “What matters more than your talents”:

Ebay Lost 233 Million Accounts. Could It Be More Than Hackers?

In what could be the biggest security breach in history, Ebay may have lost personal data for 233 million accounts. Long story short – hackers got access to employees’ corporate network credentials, probably by phishing. They than accessed and extracted user data saved on Ebay databases, including addresses, date of birth, usernames, emails and passwords, which Ebay officials mentioned were encrypted. There is yet no report of hackers stealing credit card info from PayPal (an Ebay subsidiary).

A totally unrelated Ebay product

A totally unrelated Ebay product

Ebay was “quick”  to notify its users on the breach - it only took them three months to discover and communicate what could now be the largest cyber-attack on an American company.

Is there more to this security breach and others?

One can only notice the similarities between this breach and the one that previously put Target CEO out of job. In the previous biggest cyber-attack on an American company, Target lost personal data for more than 110 million of its customers, some of which included credit card info.

In the aftermath the company was heavily investigated by law enforcement as well as the secret service. The company hired a new CIO following the security breach, Bob DeRhodes, a former security analyst for the US Department of Homeland Security, US Department of Justice and the US Secretary of Defense.

The fact that Target customers’ credit card info later showed up on Russian underground forums, as well as involvement from national security specialists, points to something closer to cyber warfare than your everyday phishing.

There will be others

The shady practices employed by the NSA to gather intel have probably left the Internet a less secure place. If it weren’t for Heartbleed, a vulnerability the agency has allegedly kept secret, or other backdoors, tracked and harnessed in the interest of “national security” – probably Ebay wouldn’t report losing more than 200 million accounts today.

Now I’m not saying that some groups left american tech companies with heavy security gaps. And I’m not saying that some former agent / analyst of theirs is halfway across the globe in a country known for its history of espionage and overall unfriendliness toward US. But probably someone should say it.

 

Tweet to Buy From Amazon. #AmazonCart – a Partnership Between Amazon and Twitter.

amazon-twitter-cartTwitter keeps getting closer to social commerce. The social network just announced a partnership with Amazon where users can add products to their Amazon cart with a tweet.

The process is fairly simple. Amazon customers who are also Twitter users can add products by following three simple steps:

  1. Connect their Amazon and Twitter account
  2. Watch for tweets containing an Amazon link
  3. Reply to above mentioned tweets and adding “#AmazonCart”

After users follow through these steps products are automatically added to their Amazon Cart and they can buy later. If Twitter users didn’t connect the accounts or the service is not yet available in their area, they get an automated message from @MyAmazon guiding them to a specific Amazon web page describing the service:

amazon-twitter-cart-not-working

Most avid users – the Amazon affiliates

tweets-amazoncartAfter quickly connecting my accounts I was expecting to see a public stream of Amazon shoppers announcing their purchases.

Not even close. Right now most of those tweeting the hashtag are Amazon Affiliates asking their followers to reply to tweets containing  their affiliate links.

Apparently this is somewhat of a feature, as Julie Law, Amazon spokeswoman states: We have a significant number of customers who use Twitter, and a significant number of affiliates who use Twitter, too.

Twitter is serious about eCommerce

The #AmazonCart partnership is probably just a first step for the two companies. Amazon is interested in social commerce and as Facebook is probably harder to steer, Twitter seems the right choice.

Twitter on the other hand, showed interest in developing ecommerce abilities by hiring ex Ticketmaster CEO Nathan Hubbard. Moreover, this year information was leaked about a potential partnership with Fancy.com and mobile payments company Stripe, involving a three way solution allowing Twitter to leverage potential customers.

Top 7 Live Chat Software Vendors for Ecommerce

While customer support is one of the most important aspects of running your ecommerce business, it is also one of the most expensive and hard to manage.

When you’re talking customer support, you probably picture people with headsets in a huge open space, taking phone calls and answering questions. Maybe you picture something a tad relaxed, somewhere along the lines of a Zappos call center. Either way call center involve human resources, technology to set up, management and others. If you think that gets expensive – you are right. Fortunately, there is a growing alternative to this.

Enter the Live Chat Software.

bold-chatIn a recent study by BoldChat customers worldwide responded to the question “Have You Ever Engaged in a Live Chat?”. Results showed that more than half the respondents did engage in live chat, with more 65% respondents in the US saying yes.

prefered-form-communicationAlthough email is still the leading form of communication throughout the world (see left), live chat is catching up really fast , especially in the United States, Canada and Mexico.

One of the most prominent companies to use live chat is UK based  Virgin  Atlantic Airways Ltd. The company reports a 23% conversion rate for customers using its live chat feature. That is approximately 3.5 times higher than the conversion rate for users not engaging in live chat.

Virgin also reports that live chat also tends to increase average orders value, with customers spending 15% when chatting with an operator. Not only is live chat useful when trying to increase sales but it can also boost productivity, with one live chat operator doing the work of 15 email operators.

Who are the top live chat vendors?

If you’ve ever happened to look for live chat support software, you’ve probably stumbled across dozens to hundreds of different solutions. Some of them free, some open source, some paid. To help you get through the noise, I’ve put together a list of 7 of the most reliable live chat software solutions, from the easiest to implement to full-blown enterprise software suites.

The list is based on the clients size and profile, data regarding cost of implementation and solution reliability. Let’s start with number 7:

7. Zopim

zopim

Zopim is probably the youngest company on this list and a very promising one, for that matter. Its live chat application is easy to setup, light and very customizable. It offers a wide array of options and reporting information and can be used to integrate fully with sales operator teams.

The company, based in Singapore, has recently been acquired by Zendesk, a leading customer service solutions provider.

Features

Among its many features, Zopim lists:

  • Visitor visualization
  • Real time visitor info
  • Email chat transcript
  • Multi-device support
  • Visitor webpath tracking
  • Customizable greetings
  • Developer ready API

Pricing

Pricing ranges from free (demo account, one chat agent only) to $20 / agent (unlimited chats, departments, widget customization etc.)

 

6. Website Alive

website-alive

Website Alive features live chat, mobile chat and click to call solutions to retailers. One additional service that stands out is the “Concierge” service that includes the live chat software but also dedicated operators by Website Alive, for retailers willing to outsource customer care.

The Live Chat app is feature packed and allows integration with the “click-to-call” option, allowing customers to ask for support on the phone. Retailers can customize their widget look and feel, aligning it with the store’s branding.

Features

  • Chat transcripts
  • Visitor tracking
  • Invitation Pop-ups
  • Chat collaboration
  • Communication records
  • Call Routing
  • Multiple chat lines
  • Call transfers

Pricing

Pricing starts with the basic pack of $29.95/month, with 2 operators included, and goes up to $97.95/mo for the full pack.

 

5. BoldChat

bold-chat-img

 

BoldChat, a product of Bold Software, features the usual live chat support systems as well as some other, more advanced tools. Among them – multiple customer support interactions, click-to-call services, co-browsing and SMS communication.

In 2012 the company was acquired by LogMeIn, a company focused on providing online support for computer, smartphone and tablet owners. Price tag: $16.5 million.

BoldChat invests heavily in research, some of its resources being available online. The company is focused on midsize to larger online retailers, making it one of the more reliable tools out there.

Features

Among others, Boldchat lists some features targeted at larger online retailers, such as:

  • Cross-domain implementations
  • Passive browsing sharing
  • SMS, Email and Twitter management
  • iPhone app
  • Mobile-aware windows
  • Post-chat survey
  • Salesforce integration

Pricing

Pricing starts at $599 / year / agent.

 

4. Moxie Software Live Chat

moxie

Moxie Software is a provider of integrated customer support systems. It’s enterprise products are integrated and used by companies such as Dell, 3M, Epson, Crocs and others. Its Live Chat system allows text dialogues, co-browsing, reactive chat and proactive chat.

The company extended its products to handle social media requests, mobile browsing, click to call features and others. One very important aspect of Moxie Software is its Knowledge Base support center and self-service applications.

Integrations

The live chat solution can be integrated with company CRM solutions such as Microsoft Dynamics, Salesforce.com or Nuance.

Pricing

Pricing varies by project

 

3. Right Now Technologies (Oracle RightNow)

oracle-right-nowIn 2011 Oracle acquired Right Now Technologies, for $1.5 Billion. At the time Right Now Technologies was handling over customer relationship management systems, as well as call center software, for over 2000 SMB’s. After being acquired, the company was integrated to Oracle and rebranded as Oracle Rightnow Cloud Service.

The division handles live chat, among others for some well known multichannel and online retailers, such as Overstock.com, BeachBody.com and others.

Features

Oracle Rightnow handles many critical aspects of customer service, among which larger companies can find:

  • Live Chat
  • Web Self Service
  • Mobile Live Chat
  • Email management
  • Contact Center integration and software

Pricing

Varies by project

 

2. LivePerson

livepersonLivePerson is one of the leading companies providing online customer care solutions. Its LiveEngage platform integrates live chat, social media, voice, content applications, mobile customer support, CRM software as well as advertising and marketing.

The company boasts more than 1.8 billion web visits observed each month. To handle this kind of traffic, the company also launched LP Insights, monitoring a complex set of customer analytics, such as behavior, sentiments and buying patterns.

Its live chat interactions allow contextual customization, so visitors can have meaningful interactions with operators.

The company handles communication needs for some of the largest online retailing brands, such as The Home Depot, IBM or Virgin.

Features

  • Conversion improvement
  • Cross-channel communication
  • Personalized experience
  • Agent productivity tracking
  • Automated customer offers

Pricing

Pricing ranges from $500 / mo for small and mid-size companies to $5000 – $15000 / mo for enterprise users.

 

1. Oracle Live Help on Demand

Oracle-logoOracle made heavy investments in the ecommerce area. Before Oracle acquired no. 3 on our list, it had already bought ATG (Art Technology Group) for $1 billion in 2010. Recent moves show Oracle Live Help on Demand moves toward integration with Oracle Rightnow. Until that happens, Oracle’s Live Help technology still powers some really big retail brands such as Costco, The Home Depot and Procter & Gamble.

Oracle Live Help features live chat, voice and email integration, providing tools for multichannel integration.

The Live Help solution tracks customers, analyzing data left behind, thus improving chat support by personalizing the experience.

As you can see, whether it is the Live Help solution or the Rightnow environment, Oracle is leading the way in online retail live chat and customer support systems. The others, however, are moving fast, are flexible and companies such as Liveperson are soon to challenge the big red.

 

 

 

PayPal to Process More Offline Payments

Ebay subsidiary PayPal is dead serious about taking on a $10 trillion market: the Multichannel Payments Market. To do so it will have to prove its worthiness against older companies, especially in offline commerce.

Multichannel Payments

A steady increase in Ebay's Revenue. Biggest cash cow - PayPal, 41% of total revenue.

A steady increase in Ebay’s revenue. Biggest cash cow – PayPal, 41% of total revenue.

With more than 140 million registered users already, PayPal has the sweetest spot in the online payments today. Its acquisition of global payments company Braintree secured an additional 35 million registered users. As President David Marcus puts it – this is a part of an effort to redefine money and payments into what he calls “Money 3.0″ – a new way of looking at payments and how customers use them.

PayPal owner-company Ebay is at the front of what some would call a commerce revolution led by technology. Its three main branches (The Marketplaces, Ebay Enterprise and PayPal) all work together in this changing landscape.

The Marketplaces (including Ebay.com, Shopping.com and Rent.com) enable C2C Commerce, while Ebay Enterprise caters end-to-end multichannel commerce technology. Ebay Enterprise is the tech, operational management and marketing vendor for the likes of Toys’R’Us, Radioshack, Sony ant many others.

Between these two, the payment processing subsidiary PayPal leads the way in online payments. The company is Ebay’s most promising subsidiary, growing at 20% in 2013. As of 2011, it decided to go offline, allowing customers to handle their money, cards and PayPal wallets in one place.

POS solutions

paypalofflineTo increase offline usage, PayPal now offers point-of-sale solutions, mostly targeted at the new tablet-based counters. Store owners can easily implement its apps and start charging right away.

In an effort to increase adoption, PayPal started integration with third-party store management solutions such as ShopKeep POS, Booker, or Leapset.

Among its benefits for store-owners, Paypal lists security, quick implementation and an all-in-one approach to accepting payments, scanning barcodes, tracking inventory and sending invoices.

Customers willing to take their PayPal Wallet to an offline store account can pay by swiping their PayPal paycard, using their account or by paying online and picking up in store. Having a larger pool of companies accepting PayPal payments allows the company to securely handle all transactions, allow customers to receive loyalty points and handle all personal information.

Ebay and PayPal will stick together

paypal-growthSince Ebay purchased PayPal, both companies listed a successful increase in revenue. Ebay powered PayPal’s adoption to its marketplace users and in turn PayPal grew up to become one of Ebay’s most profitable subsidiaries, amounting to 41% of total revenue in 2013.

With the help from Ebay, PayPal grew from $600 million in mobile payments to $27 billion in just three years. The figures are posted on the 2014 annual shareholder meeting website, in response to Carl Icahn’s demand to spin PayPal off into a separate company.

Carl Icahn, one of the most notorious corporate raiders in the tech industry, demanded PayPal to be split into a separate company and become listed on its on. The board of directors fought his demands showing that even though the company is open to changes in the future, right now the two are working better together.

Luck would have it that shareholders reached an agreement to keep the companies together and handle the incoming commerce revolution as a whole.

“[...] we have moved aggressively to leverage PayPal’s integration with eBay to expand PayPal’s reach to millions of online retailers and to offline transactions. PayPal remains one of the fastest growing elements of the company – which helps explain why others are targeting the payments business but are far behind PayPal.”

John Donahue, Ebay CEO. Source.

 

Is Mass Customization the Future of Ecommerce?

Henry Ford said “People can have the Model T in any color – as long as it’s black”, in the early 20th century. That’s when Ford’s innovation, the assembly line, vastly improved productivity thus reducing production costs. Lower costs meant companies could manufacture cheaper products and still be profitable.

The assembly line made possible the mass production of goods. Things that were previously custom-made and unique soon became available to the now emerging middle class. Clothing, food, even cars and houses became accessible to the mass market.

More than 100 years after Ford launched the "one color" Model T, Ford buyers can customize their cars online

More than 100 years after Ford launched the “one color” Model T, Ford buyers can customize their cars online

Industries were built around product manufacturing. The customer was no longer the center of the universe. Companies focused on the product. Products were manufactured in large quantities, distributed and sold, with a lot of help from advertising companies. Even though advertising was around, it wasn’t the type of organized industry we now know until the television set became a part of consumers’ daily lives. By borrowing some concepts used in WWII propaganda, experimenting a lot and innovating, advertising quickly evolved in a mature tool to push mass – manufactured products to the market, globally.

Mass manufacturing becomes the standard

After 1970 two trends started to emerge. First one – the mass-manufactured product becomes the norm. Faster assembly lines, improved productivity with better management and companies going global – it all lead to bigger manufacturing facilities and more money poured into advertising. In the western world people were spending earned and borrowed money faster than ever before to buy mass-market products.

The second trend was improving production with help from computers and networks. It all started small and kept growing. Innovation in the IT industry allowed companies to improve manufacturing productivity further. Soon cars stopped being built by people and robots took over. They were faster, better, less prone to error and cheaper in the long run. They also learned new things a lot better. With automated assembly lines, the mass produced goods could be reprogrammed to build new products fast.

The product development cycle was shortened. The fact that now BMW or Mercedes are able to launch a new model every month is possible because of advancements in management and IT. These companies can now target customer groups. Ford’s Model T was a “One Size Fits All” product but now everything’s changed. The auto companies can split their customers and they can build products for increasingly smaller niches.

Mass customization becomes a reality

The internet changed everything. When Michael Dell decided he would create a special PC for anyone willing to pay for it, he probably had no idea what his actions meant. Now Dell is a global company and one of the largest online retailers. When the company decided it was going to offer mass market customization features, it seemed like a really risky move. At that time, computer manufacturers were already engaged in a price war to market accessible computers.  It didn’t seem like a good idea to turn a mass produced, mass marketed product in a customizable one.

Dell offered their customers what they wanted: the ability to choose between different options in terms of design, software and hardware. The order, assembly and shipment processes were streamlined using software designed to minimize human input and error. Today’s devices (be it desktop computers, laptops, tablets or smartphones) are available in many formats. Most of them are a hybrid between mass produced and customized products.

The future of mass customization is already here and the company that helped most with making it a reality is the largest online retailer in the world: Amazon.

Amazon lead the way in mass customization with Print-On-Demand

amazon logoFirst off, Amazon made possible a type of personalized experience for customers by providing personal recommendations and notifications based on purchase history. Its second biggest innovation was print on demand. With Amazon, books were no longer published en-masse for long-tail items. Rather, for a small amount of extra cost, they were made available as items printed on demand.

This innovation spawned a new breed of self-published authors, leveling the field for publishing. In turn, readers were now able to read books otherwise unavailable and writers could skip pitching to publishing houses. The effect was so dramatic that some large book retailers had to close their brick and mortar stores.

Top ecommerce companies selling mass customized merchandise

From shoes to t-shirts to art-prints it seems like anything is game when it comes to online-powered mass-customization. Many companies jumped the customization wagon, but few stand out. Have a look below at these companies:

zazzle

 

Zazzle.com

One of the most popular platforms in the world for Built-To-Order, customized products is Zazzle. Its mission: “To Enable Every Custom, On-Demand Product in the World On Our Platform.” It is a mix between self-curated product designs that can be customized by customers, and a wide variety of products submitted by designers and entrepreneurs in the marketplace.

The company partnered with large brands to provide customizable products for companies such as Disney, Hallmark, DC Comics or even Google. It is growing fast, outpacing its competitors and bringing mass customization for the wide market.

Zazzle’s success is based on two main factors. The first is its ability to customize products that are manufactured separately and customized at the end, with input from the end consumer. This allows for a minimum slowdown in manufacturing capabilities.

The second factor helping Zazzle tackle its competitors is a patented color print technology that allows it to manufacture multicolored items, without signifiant increase in costs and manufacturing time.

It does also help that Klein Perkins Caufield & Byers, a well known Silicon Valley VC firm, backed Zazzle with $48 million. The VC’s have also backed up a couple of companies you might have heard of, such as Google, Amazon, AOL or Electronic Arts.

chikoshoes

Chiko Shoes

Ladies – ever felt like you could be the world’s best shoe designer? Felt like you’ve hadn’t had the chance to show what you’ve capable of? It turns out you are not alone. Founders Rumbert Kolkman and Judy Chin believed they could make shoe design a mass-customizable market. In 1999 they’ve built a B2B company that would allow shoe retailers and designers to access a rich supply chain with ease.

In 2013 they’ve opened this option to the public, unleashing the power of mass-customization to end buyers world wide. Prices are ranging from $230 to $1200 and Chiko Shoes allows customers to chose between 1300 material swatches.

The shop goes against luxury heavyweights dealing with customization, such as Louis Vuitton Mon Monogram or Prada’s Lettering Project.

shapeways

Shapeways

We’ve previously listed 3D printing as one of the technologies that are disrupting online retail. Among many other companies providing 3D printing technology, Shapeways stands out as a potential market leader for 3D printed custom items.

The company was founded in 2007 in the Netherlands. It moved to NY, where it received a $5million founding from VC’s including Andressen Horowitz. It now runs a fully operational marketplace where designers can sell their 3D designs and customers can create their own.

As of June 2012 is sold over 1 million user-created objects. Production was provided by its Queens, NY 3D Printing factory that uses  50 industrial printers to manufacture millions of user designed custom projects.

threadless

Threadless

Threadless started as a marketplace for t-shirt designers and quickly evolved into providing other customized merchandise. Users can purchase clothing items (such as t-shirts, hoodies or tank tops), art prints or phone cases.

Although Threadless does not allow mass customization per se it does allow users to submit designs. These designs can be featured and sold to consumers afterwards. What makes Threadless different is the fact that not all designs are accepted and marketed yet those who do are chosen by the community.

ethreads

Ethreads

Ethreads allows customers to create their very own bags, starting with a blank model and adding options using the online design tool. The shop also offers options to see what others have designed and the ability to buy directly on Amazon.

fab.com

Fab.com

Fab started as a flash sales online store. Its approach proved very lucrative for a while. The company decided to take another path by providing customized design options for furniture and home deco buyers. Although the change affected only its european operations, it seems the company is heavily interested in developing its customization options. It completely stopped marketing its products and flash sales options in the EU and is fully engaged in providing customized furniture.

A preview of furniture designed on Fab.com

A preview of furniture designed on Fab.com

The furniture is made-to-measure according to users’ needs. It allows customers to design their own products in 5 main categories: shelving systems, tables, sofas, beds and wall shelves. A complex yet easy to use configuration system allows potential customers-turned-designers to create the perfect match for the home. Inputs allow customization of size, materials, colors, finishing and others. A 3D visualization engine allows customers to view their newly created product before ordering.

This new pivot in the company was made possible after Fab purchased Massivkonzept, a company founders declared was already profitable and growing. It seems Germany is a great place to look for companies focused on customized furniture design. Woonio, a german ecommerce startup, offers customized furniture like tables, beds, lounge stairs.

The future of retail is mass customization

Examples above show any industry can allow mass customization and is prone to change. Individuals need to feel empowered when purchasing and technology has made this possible. Whether is next year or 10 years from now, mass customization will become massively popular.

 

 

AliBaba decides to take its IPO to the US. Is it taking on Amazon and Ebay? Not just yet.

In terms of global Ecommerce, this was a very interesting day. The Chinese wonder, Alibaba Group Holding, has decided to take its IPO to the States. The company, founded by ex-english teacher Jack Ma in 1999, is now on track to extend its influence outside China.

Jack Ma - founder of Alibaba.com

Jack Ma – founder of Alibaba.com

The company started as a way to connect Chinese manufacturers to the western buyers. It than evolved a B2C and C2C approach, an online payment solution (AliPay) and even an investment fund, Yu’e Bao.

The company’s growth has been mostly fueled by its B2B division, one very important gateway to China’s manufacturers, and its connection to Yahoo. The american company, although not in its best year, was lucky (wise?) to invest in AliBaba, when it was just starting. Although the group has been buying back Yahoo’s stocks, it is still largely (24%) owned by Yahoo.

Given AliBaba’s growth, Yahoo’s stocks have been bumped up. Some analysts suggest that 21$ out of Yahoo’s 37$ stock price come from AliBaba. The future looks great for both Yahoo’s stocks and AliBaba. In the IPO the Chinese company is expected to raise $15 billion, at a valuation north of $140 billion.

Is AliBaba ready to take on Amazon and Ebay?

The answer is … probably not. This might not be its target. As mentioned in an announcement on the corporate blog, AliBaba initially intended to be listed on the Hong Kong exchange. Its management structure, however, would not have the same influence in the case of a Hong Kong listing. Senior management, owners of 10% of the company are not willing to bend to Hong Kong’s rules and have thus decided to switch markets.

“We wish to thank those in Hong Kong who have supported Alibaba Group.  We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong.” – Source

Even though the company says it wants a global approach and a more transparent communication to the market, its senior executives still want the full control.

AliBaba needs two things right now: cash and popularity. It needs cash to keep up with its historic growth, as China’s economic growth is slowing down. It is still based in China, its main assets are Chinese manufacturers and it is China where AliBaba controls 80% of ecommerce. But Jack Ma was wise enough to share its company’s growth with Yahoo, which was a bless in terms of global reach and brand awareness. The company now needs to go a little further. The global media has its eyes on the New York stock exchange and AliBaba needs to show it is more than just another Chinese company.

It doesn’t matter that the company is already listing a tenfold increase in B2B transactions or the fact that the Chinese ecommerce market will reach$655 billion by 2020 . The spotlight is somewhere else. And AliBaba needs to be there.

The P2P (Peer to Peer) Banking Revolution. Can The Big Online Retailers Take on Banks?

Banks are one of those things people take for granted, whether they understand them or not . Their systems and inner workings are unknown to most of their customers. Their influence has, to some extent,  shaped the modern world. Strength, rigidity and, until recently, stability have been the common attributes for banks.

Change rarely, if ever, happens in the banking sector. When it does, it’s usually for the worse. Recently, however, something seems to have been shaking its very foundation: the evolution of electronic markets and peer to peer cooperation.

Commerce has been liberalized by the likes of eBay, Amazon and AliBaba. These companies are responsible for shortening the supply chain from manufacturer to the end consumers. As recent developments show, the banking sector is next. Who knows, maybe the companies that changed retail will also be those able to change banking.

Lending for the People: Top Peer to Peer Banks

Although just recently launched, some new companies have been taking the banking world by storm. These companies match lenders and borrowers, through a common marketplace platform, usually using auctions.

225px-Zopo-logoZopa, UK’s leading P2P lending company, offers a 5% return to lenders and charges 5,6% on personal loans. Apparently it works great as overall acceptance has been steadily rising. In the past 6 months alone the company has lend 100 million pounds, 25% of the total lend since it was founded in 2005.

Among the things responsible for a growth in P2P lending acceptance was the fact that traditional banks’ risk aversion that slowed lending to a halt. Savers have also been ignored by banks so they had no other choice but to turn to new methods of growing their savings. “UK savers seem to have been forgotten by the banking establishment, so it is not surprising more people are giving Zopa a try”, says Giles Andrews, CEO of Zopa.

isepankur-logoIt’s not just the UK or the western world that seems to have an appetite for P2P lending. IsePankur, an Estonian based P2P banking startup, has just added lending options to investors outside Estonia. The company was accepted quickly as an reliable financial player and now it lends money to 60 000 people. Although it tackled the  acceptance issue, it still has to deal with higher risks than UK-based Zopa. It manages this issue with the help of a high return on investments (aprox. 22%) that seems to be enough for everyone willing to lend against a default rate of 3%.

Source: Wiseclerk

Source: Wiseclerk

lending-club-logoGoogle itself is pretty interested in the P2P area as it purchased a share of Lending Club, valuating it at $1.55 billion. The company, based in San Francisco, is boastful about providing loans in 43 states and earning its investors more than $300 mil so far.

Lending Club was founded in 2007, 2 years after Zopa, by Renaud Laplanche and it has lend more than $2 billions in 2013.

lending club

Usual destinations for loans contracted on Lending Club

Deposits are also being disrupted. AliBabab.com shows a growth rate of 1211%

AliBaba.com, China’s main digital company, the biggest online retailer in the world has joined the banking digital revolution. It has recently launched the Yu’e Bao (“Remnant treasure”) fund , that allows its customers to capitalize on AliPay’s growth by depositing money in this fund.

Customers will use money parked in their accounts. Their funds can thus increase with the company’s development. Although it is taking on some of the largest and richest banks in the world, it shows an outlandish growth rate. “Yu’E Bao fund reached 4.24 billion yuan (USD 693 million) in Q2 2013, growing by 1211.33% in Q3″ it is reported.

Equal Opportunities for All. Are Electronic Markets Making the World a Better Place?

hands

In 1932, Ben Graham asked a tough question: “Is American Business Worth More Dead than Alive?”.  At the time US and the World were struggling through the depths of the Great Depression. The 1929 and 1930 stock market crashes left anyone with a sense of reality discouraged with stock exchange.

But Ben Graham, then a small investor with a brilliant mind, noticed something interesting. The stock market crashes left companies deeply undervalued. The companies were worth more taken apart than sold as a whole. They struggled with banks that not loaning them money and investors far too prudent.

30% of all listed companies had a larger value disassembled than sold as a whole. Their net quick assets (cash, marketable securities, and accounts receivable minus current liabilities) were worth more than the value investors were willing to pay for. Mr. Graham basically said: it’s now safe to invest again.

It’s 2014 and now we wonder how technology companies are evaluated. We strive to understand how something so seemingly small and useless as messaging app, a social network and an electronic market can be so highly valued. If Ben Graham would look at Amazon, would he decide to buy? Well I don’t know about the messaging app or the social network but if it were for the electronic markets, I bet mr. Graham would say: it’s now safe to invest again. Below you’ll find out why.

The Prodigal Student

Ben Graham lived until 1976. Although definitely not a poor man, he didn’t die a very wealthy one either. He had no problem ensuring his wealth increased steadily but he was more fond of reading Proust in French and Plato in Latin than gathering fortunes.

It was one of his disciples that reminded the world about Mr. Graham. It was this disciple, the worlds richest man for a very long time, that made Ben Graham famous, repeating his mentor’s name every chance he got.

Warren Buffet

Warren Buffet

Warren Buffet made his first investment when he was just nine. He ran his own business by the age of 14. He was a millionaire by the age of 32. He tried to get Ben Graham to hire him for years until the mentor finally accepted he was ready to join his company.

He than evolved continuously. Using Graham’s method he increased his fortune by the year. There were of course setbacks but he managed his money and his partners’ like no other.

But there was something Warren was not fond of: technology. He refused to be one of the early investors in Intel because he just didn’t understand technology. He was more focused on long term companies that he understood. Amid the Dot Com Bubble, when everyone was rushing in to buy tech stocks he said:

“Technology is just something we don’t understand, so we don’t invest in it.”

They laughed and they lost. The Oracle of Omaha, as mr. Buffet is often called in media, was right again. He left the bubble unwounded. An than he bought tech stocks.

Warren Buffet invested in IBM and Intel. These companies fit his principles. They were strong companies, that he could expect to own indefinitely. They survived the hype and escaped stronger.

Fairness and the money

Fairness is a concept that sometimes eludes our understanding. At least most of us. Warren Buffet is not like most of us. He was able to see beyond the hype when tech stocks were overvalued and he was able to see beyond the public opinion when important matters were disputed.

He and his wife were one of the few anti – segregation militants in Omaha, back when rasial differences were the norm. He fought strongly anti – semitism in his hometown. He pledged $31 billion to charity and now he is one of the strongest advocates of increased taxation on the rich.

“So let’s forget about the rich and ultra rich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased,” he said. “The ultra rich, including me, will forever pursue investment opportunities.” Warren Buffet

Warren Buffet was never an elitist. He believed everyone should have equal opportunities at pursuing his interests and he stands even today as the living proof fair opportunities make up for very successful people.

But for the recorded human history, wealth has been unequally spread. From the dawn of man kind, through the Roman Empire, the Middle Ages, the Industrial Revolution, one thing was constant: wealth is not distributed equally. For a very long period of time also wealth (especially inherited) also mean life opportunities.

Here’s how we perceive wealth disparity right now:

The long story short:

  • wealth is not distributed equally
  • not only is wealth not distributed equally, but it is actually in the hands of those that don’t deserve it
  • the distance between the lowest paid and the highest paid earners is absurd
Wealth Distribution 1983 - 2010

Wealth Distribution 1983 – 2010. Source: Professor G. William Domhoff, University of California.

Wealth disparity may indeed be a problem. If it meant the poor stay poor and the rich stay rich forever.

But it’s not really that way. At least not anymore.

In the past 20 years the top 1 percent increased their share of total net worth from 33.8% to 35.4%, with a peak of 38.5% in 1995. The next 19 percent increased their share of total wealth from 47.5% to 53.5% and all of these at the expense of the bottom 80%, who lost a 7.6% share of total net worth.

The rich 1% didn’t get much richer. The rich 20% got richer on the expense of the poor. It’s not the rich that take away from the poor. Nor is the middle class disappearing . The middle class is getting a lot richer.

There is a rich 1%. It’s just not who you think it is.

Think about it for a second. Are these categories fixed? Are people in the bottom 80% destined to remain there? Are the top 1% staying there forever?

The previous two examples, Warren Buffet and Ben Graham, although not dirt poor, did not come from rich families. Sure, they were not starving (well except Ben Graham, at an earlier point in his life), but they were definitely not rich.

Yes, Warren Buffet’s father was congressmen for 4 terms, but he did struggle at length in his youth to keep the family finances afloat. Through extensive work he managed to provide a decent lifestyle for him and his family, and thus young Warren was provided an opportunity to put his outstanding mind at work.

So did Ben Graham. His mother inherited a decent fortune from his father but lost it all in 1907, when he was just 11 years old. What he did receive was a brilliant mind and before 25 he already had a $500 000 small fortune.

It’s not inherited wealth. Graham and Buffet improved their financial status with as a result from their innate intelligence and hard work. They did not receive a fortune. They received a fair chance at earning their fortune.

They’re not the only ones. Forbes top 10 richest people are similar cases:

  1. Warren Buffet was born in a middle class american family, earned his wealth through heavy saving and intelligent investments. Worth  $60.3 billion.
  2. Carlos Slim was born to immigrant parents. Slim was early to invest (bought first share at 12). His story is a lot similar to Buffets, although he came from a much poorer background and in a poorer country. Worth $72 billion.
  3. Amancio Ortega, founder of the Zara brand and – was the youngest of four children. His father – a railway worker. His first job, at 14 – shop hand for a local shirtmaker called Gala. Worth $65.3 billion.
  4. Ingvar Kamprad – founder of IKEA – was raised on a farm. He started business as a little boy selling matches to locals. Worth $52.8 billion.
  5. Larry Ellison – founder of Oracle – son of an unwed mother and an italian pilot. He was given for adoption at the age of 9 months. Worth $43.3 billion.
  6. Sheldon Adelson – business magnate – his father was a taxi driver and his mother ran a knitting shop. Worth $37.5 billion.

And they’re not the only ones. Have a look at Forbes top 400 richest people and you’ll notice the self made billionaire is not the exception. Out of 400 richest people, 386 were self made. That’s an astonishing number. 96.5% of the richest 400 are self made.

So it is not inheritance that builds fortune. It’s sometimes the opposite. As numbers would have it wealth is a result of fair opportunities, a brilliant mind, drive and hard work.

Well … at least if you’re lucky enough to be born in the US.

The opportunity disparity in the world

Income per capita in the world. Source:

Income per capita in the world. Source: Keith Sill.

In the past, before the airplane, the radio, the telephone and eventually the internet chances looked pretty grim for those born outside rich countries. Capital was scarce, life was hard but most of all education was a real problem.

Starting with the industrial revolution, unless you were born in the Western Europe or the Western Offshoots (United States, Canada, Australia and New Zealand) your chances of getting a decent lifestyle were slim to none. Getting an education – even worse.

So if you are reading this from a computer in the western world and you are complaining about the 1% stealing your wealth know this: 96.5% of Forbes 400 are self made. You have an equal opportunity at getting rich.

Those born outside don’t have this opportunity. Or do they?

Technology made Western World rich

As the world moved from the pre-industrial to post-industrial era some won and some lost. Income grew and grew, helped by the magical vector of technology. Human workforce was replaced by exponentially growing human ingenuity.

The working hand was replaced by the steam-powered machine. Carriages were replaced by cars, trains and railways. Houses were replaced by steel and concrete behemoths. In the western world people were no longer working the fields but rather in factories and offices. Capitalism fought and (relatively) quickly replaced all other economic ideologies.

Marketing and advertising were born to help sell excess production. The stock markets were fueled and exploded. Multinational companies roamed the world to sell the products the West could make better, faster and cheaper.

Technology patents piled up until masses of workers became nothing but managers, lawyers, tradesmen, pencil-pushers. Those brilliant enough to harness the power of technology and improve their peers’ lives were rewarded with vast fortunes.

The temple of the mighty dollar discovered and pushed new concepts and new ways of doing things, growing faster and faster apart from the rest of the world. Until it built the personal computers and the Internet.

The Internet leveled the playing field

When the Internet came online it was a military application. It quickly evolved into an academic research network that spread throughout the world. There weren’t too many people willing to bet big on its economic impact yet the internet economy is now expected to reach 4.2 trillion by 2016.

Robert Lucas, Nobel Laureate

Robert Lucas, Nobel Laureate

Nobel Laureate Robert Lucas stated that economies that are at the forefront of economic and technological development will grow by approximately 2% per year. Those below them are usually kept below by what he called “technology frontiers”. Advances in genetics, IT, robotics and others that help labor and capital be more productive, are technology frontiers. Once technology frontiers disappear, lower economies will grow 2% + an additional growth rate determined by the income gap between itself and the richest country. So – the later the technology frontiers disappear, the bigger the income gap. The bigger the income gap, the faster the growth. The world tends to balance inequality.

Countries that are later to develop can adopt new technologies easier and the main factor that helps emerging markets evolve is technology and education.They can freely adopt and integrate these, without having to go through the research and developed the countries at the top of the food chain had to.

Even though countries may start development later, they tend to reach the same point in terms of income.

Even though countries may start development later, they tend to reach the same point in terms of income.

Internet made everything easily accessible. It quickly became the gateway for anyone willing to access the sum of all human knowledge. Western colleges now post courses online free of charge. Online academies help students become specialists in any desired field, ranging from business, to communication to computer sciences.

In a simulation of Lucas’s model (on the left) you can see how countries that are later to break through technology frontiers are also those with the fastest growth. For most countries the bulldozer that broke through the technology frontiers was the Internet.

With the widespread adoption of the Internet, global opportunities shifted quickly. Countries that were previously kept in the dark by economic conditions, lack of education and poor access to information now had a fighting chance. They were no longer tied to menial jobs and export of raw materials. Giant leaps were made in the past twenty years in terms of global access to information and decreasing the opportunity gap between the Western Countries / Western Offshoots and the World.

Jan Koum’s rags to riches story is deeply iconic on how much the field was leveled in the past years. He grew up in a village near Kiev, Ukraine. He lived through poor conditions until he put his skills to use in the US. Just as his country was being torn apart by an anti-government revolution he sold his company, WhatsApp, becoming a billionaire at just 38.

And it’s not just software, code and people. Goods are quickly moving from country to country, continent to continent. All due to the new electronic markets, enabling global access for small to medium producers and retailers.

Companies such as Amazon, Ebay, AliBaba.com are connecting the world and taking out the middle man. With less losses on the way to the end consumer, products are cheaper and competition is itself leveled. Everyone gets an equal opportunity and a decent start.

The electronic markets are changing commerce for the first time in human history

Take China for example. It was pretty late to the party in terms of economic development. When it did start to grow, it took the world by storm. 

As for electronic markets, China hadn’t had to invent or discover the internet. It just adopted it. It made a great leap forward in terms of manufacturing. It made an even bigger leap forward when it comes to e-tailing and electronic markets:

China's compound Growth rate, 2003-2011 - 120% . China grew 7 times faster than the US.

China’s compound Growth rate, 2003-2011 – 120% . China grew 7 times faster than the US.

If you look carefully at the China’s e-tailing market growth, the growth rate it’s pretty similar to Robert Lucas’economic growth theoretical modeling. China’s quick adoption of ecommerce as a means to get a larger retailing coverage was a breakthrough in a very important technology frontier: electronic markets.

AliBaba.com compared to Amazon and Ebay

AliBaba.com compared to Amazon and Ebay

It is estimated China’s internal ecommerce market will reach $655 billion by 2020. The figure, as astonishing as it may seem, is dwarfed by AliBaba.com’s sales figures.

AliBaba.com, China’s main ecommerce company, is focused on B2B / C2C transactions between Chinese manufacturers and the rest of the world and it reported gross sales of $170 billion in 2012. That figure has only been ever  reported by two companies: Walmart and AliBaba. It was founded in 1999 by 18 people and an initial investment of 22 million dollars. Now it is the largest ecommerce company in the world and quickly becoming an unbeatable force in retail as a whole.

The company is a prime example of how a previously complicated international supply chain can turn into a click of the button. AliBaba is responsible for developments in key areas of China’s economy:

  1. increasing exports by connecting manufacturers and retailers (B2B)
  2. improving retail coverage for the internal and external customer (C2C)
  3. improving Chinese suppliers reliability and accountability through its certification programs

Companies such as AliBaba, Amazon , Ebay are supplying the world with something it badly needs: equal opportunities. With electronic markets easily available and growing fast, people all over the world are starting to have, for the first time in history, equal chances at attaining success.

It’s not Equality, but Meritocracy  is as good as it gets

By empowering individuals to access the same wealth of possibilities, the new tech companies are changing the way we think of human development.

Our history has been sadly occupied by mostly dynastic forms of leadership. Aristocracy, brute force ruling, totalitarian states have one thing in common – unequal opportunities for those that deserve them.

Marxism brought a fake yet inciting concept: that all man are equal. Indeed we are all created equal. We should have equal opportunities. But perfect equality is neither attainable nor fair. Even among equally gifted individuals, drive and hard work can shift the balance more than we care to admit.

Equal access to opportunities is needed and desirable. We have to make it possible that even if the future cancer – curing Nobel Laureate is born in a poor village in Africa, he has the chance to rise. Even if the physicist that will invent faster than light travel will be born in a poor family, he has the chance to reach his full potential.

Our electronic markets are so far the only way we can ensure equal opportunities to all mankind. What made Warren Buffet rich was a brief period of time when stocks were great to buy, his innate intelligence, his access to the best information he can get, a close relationship to an intelligent mentor. And hard work.

Beside innate abilities that turn out to be not so important, everything else above is now available or shortly be available to each citizen of the world.

Companies that are building electronic markets are not overvalued. They are a new breed of companies that work for the betterment of mankind. Knowingly or not. That’s why we need to look at them not from the previous brick and mortar, asset only point of view, but a new one. We need a perspective where we look at a company and choose to invest in it based on a simple question: “Does this company get us closer to an equal opportunity world?”

It’s not all good …

However – be sure equal opportunities do not mean equality. Man was not born a machine. He is a creative force of nature and as long as it will use his creativity and intellect, opportunities will be used.

Unfortunately a dark veil has been pulled over, at the dawn of our productive society. Many of us still act as if we depend on simple, repetitive jobs to make a living. Whether it is our instincts fighting the technology we hardly understand or  a self perpetuating fallacy we must stop trying to act as machines.

The world is potentially free. We must leave all repetitive tasks to technology and become the creators we are able to become. Those that fail at this will be the 80% struggling tomorrow.

Twitter-commerce is in the Making. And it Looks Great.

It seems that Twitter is moving forward with its plans to enter the ecommerce market. Last year the company hired Nathan Hubbard, former Ticketmaster CEO and ecommerce heavyweight, to handle ecommerce development efforts.

News about Twitter Commerce have now surfaced, showing a potential user flow for customers buying directly from Twitter.

The company has partnered with Fancy.com (online catalogue / Pinterest for buyers) AND Stripe (web and mobile payments) to provide merchants with the option to sell on its social network. The link between Twitter and Fancy is obviously Mr. Jack Dorsey, Twitter (somehow) co-founder and member of the board for Fancy.com.

Twitter commerce user flow found on Fancy.com

Twitter commerce - Source: Re/Code.net

Twitter commerce – Source: Re/Code.net

Re/Code “found” some “documents on fancy.com, in a “unprotected” area. Italics mark some obvious skepticism with “finding the documents” (what- did they just type fancy.com/twitter-commerce?) .

Whereas the documents and their source is of little importance, the fact is the user flow looks great and seems beautifully integrated with Twitter. It even provides a package tracking app and same-day delivery options.

Unlike Twitter, Facebook notoriously killed the much-awaited f-commerce by ignoring the growing ecommerce trend and its own potential opportunities. Much more –  it then decreased organic reach through its platform for non paying customers, thus alienating potential f-commerce merchants.

Now that the playing field is leveled, Twitter may somehow turn out to be a spectacular and unexpected challenger to eBay and Amazon. It does have 645 million potential customers.