Etsy: a platform example
In continuing with my thoughts on the best definition of a platform, I’ve realized that I neglected one of the most important elements that defines a true platform.
In my last post I spoke of the importance of generating value for the community (or ecosystem). While this is an absolute necessity, it is also predicated upon an important assumption. A platform has little, or no, value if there is not a community of users who desire the platform for interaction. Ultimately, the goal is to move from the phase of interest into a business need (i.e. desire to require).
As I’ve said before, I like examples. One of the most compelling examples of generating a community is Etsy.
For those who aren’t familiar, I’ve copied the information from their about page below:
Etsy is an online marketplace for buying & selling all things handmade.
Our mission is to enable people to make a living making things, and to reconnect makers with buyers.
Our vision is to build a new economy and present a better choice:
Buy, Sell, and Live Handmade.
The first thing you should notice is the statement that they desire to "enable people to make a living." This is indicative that the folk behind Etsy recognize the importance of moving from simply interesting to necessary. Still confused as to what their platform enables?
Etsy is somewhat similar to eBay. It is a marketplace that aligns the desires of buyers and sellers in the market of creating, or consuming, handmade goods. However, there are some unique differences. In particular, Etsy is focused on allowing their community of sellers to create micro-sites through which they have their own market. The interface itself provides for a seamless search among the myriad of handmade goods available.
In addition, Etsy is not simply an auction site. It is intended to be a place in which those creating handmade goods can treat as their sole location (or supplementary) for selling goods. As such, it reaches a somewhat more specialized audience than the traditional auction platform. Some may think, as I did initially, that this limits their market opportunity. While true that there are fewer focused on the market of handmade goods, it also drives the usage and popularity within that marketplace.
In sum, Etsy is generating value for its users. But in advance of this, they properly identified a need in the market and have built a community around this need. As such, they are an excellent platform example.
It is worth noting that the process of identifying the needs of communities are often easier said then done. This is, in my experience, the phase that sinks most platform companies…true adoption requires both flexibility in implementation and truly identifying the proper catalyst to initiate such adoption. But that is best left for another discussion.
If you are interested in learning more about the Etsy plan for the future, the CEO has an excellent post detailing their plans here.
What’s your perspective? Agree? Disagree? Anything to add? Critiques?
The comment form is below. . .
April 3, 2008