Proteus Part Two: The eBay Digital Commerce Card
If you haven't read it, be sure to check out Proteus Part One.
Imagine a device with the following features:
- credit card sized
- embedded RSA ID security
- magnetic code stripe
- RFID token
- WiFi
- SIM slot
- LCD screen
- external speakers
- camera
Now imagine that device uses the eBay Commerce Engine to do the following:
- Find nearby items on my shopping list
- Snap barcode picture and quick purchase
- Process credit cards on the go
- Mobile pay with PayPal
- Sell my car using the license plate
- Watch the eBay Shopping Channel (and YouTube videos)
But, Serge, couldn't we just create an iPhone app to do all this? Sure. You'll build that iPhone app too. But launching an iPhone app for eBay will get about as much attention as MC Hammer's last album. How many of you--who don't work for Kijiji--know there's a Kijiji app? Search through any of the first 3 pages of Google/Bing/Yahoo search results for "top iPhone apps" and you won't find eBay's iPhone app in any of those lists except for one...148apps...and eBay's iPhone app is #135 (out of 148). PayPal doesn't make any of the lists.
I don't say this with any disrespect. These are all great apps. In fact, most people who use them really love them (myself included). But it doesn't matter how great your app is if no one knows about it.
Why did Amazon launch the Kindle? It contributes less than 3% of its total revenue according to Amazon's Q309 earnings report. Does Amazon want to get into the consumer electronics biz? Maybe, but I doubt it. Kindle is there to remind people that Amazon is a good business. That it anticipates the needs of its customer. That it is creative. The Kindle is there to enhance Amazon's media and electronics business, which does contribute over 80% of its revenue.
That's why eBay should build the eBay Digital Commerce Card. The point of the device is a launching vehicle for the eBay Commerce Engine. It demonstrates what the eBay Commerce Engine is capable of delivering. It changes perceptions on what eBay is and what eBay could be. It associates all the shopping activities a person does in real-life with the eBay Inc. brand and its properties.
The eBay Digital Commerce Card opens the door to push eBay Commerce Engine services to cell phones, airplane in-flight entertainment systems, shopping cart LCDs, digital billboard, your cable TV box, and so on and so on. Wherever there is commerce, eBay is there.
I'm not suggesting eBay should get into the electronics game. This is a promo. Limited-time only. You sell it at cost or at a loss. Shoot for $50, but no more than $100. Set aside 10,000 of them and send them to the top Power Buyers, Power Sellers, Tech Bloggers, and iPhone/Android/Facebook Developers. Then stand back and watch. The media attention alone will be worth it.
Don't want to build it? Fine, release the blueprints and provide a DIY toolkit. Partner with the component manufacturers and embed eBay services on the core chip. Will people hack it? Sure. But you only need enough to use it as its intended for it to serve its purpose. Do you really think Apple couldn't make its iPhone hack-proof or at least much more difficult to hack? Sure they could. They don't need or want to because it keeps the iPhone hot. It keeps them relevant. It lets Apple keep its exclusive deal with AT&T while not really locking-in the device.
The crazy part? You don't even have to have any intention to actually build the eBay Digital Commerce Card and it will still benefit you. What is the most talked about gadget in the past 3 years? The mythical Apple iTablet. It has dominated chat boards and fanboy forums for years. Apple has no official position. Last month, Microsoft's Courier concept leaked. In one swoop it dominated the news and set the bar for the iTablet, effectively displacing the iTablet as the next must-have item.
Now consider this...neither product actually exists.
This isn't science fiction. This isn't something that is 5 years away. There are products and prototypes on the market that already do some of these things.
This prototype is currently being shopped around by its designer.
Visa is experimenting with a smarter credit card.
These are being offered at a price between $17.50 - $35.00 per unit.
Of course, my concept goes much further so it will cost a bit more. But not as much as you think. Especially when you consider that eBay shouldn't try to make money off the product itself. I am guessing quite a bit here, but I would venture that you could find a manufacturer in China to put one together for you for less than $2M. Most of that money is going to be spent trying to find out how to put the right commodity components together to reach that $50-$100 price point. It starts setting up the right manufacturing equipment and supply chains to get it going. Yes, yes, you'll need to think about a sales force, customer support, returns, and so on. Put another $2M on it. That's about a minute of Super Bowl commercial air time. eBay generated $2.3B in free cash flow last quarter. I think it can manage.
Read more at Proteus Part Three.
EX Marks the Spot in Japanese Classifieds
I lived in Japan for a few years and still maintain a few networks there. For a little while I even had some fair facility with the language. Well, at least enough to understand the original Dragonball anime (Dragonball Z was still manga at that time). This by no means makes me an expert--indeed I'm far from it--so please excuse the few liberties I take in generalizing my experience there. Consider the five pillar categories of Classifieds: goods, autos, jobs, real estate, and services. Win any two of these, and you'll probably win your Classifieds market. Let's talk about goods and autos. Goods in Japan = Electronics and Media (books, music, movies, and video games). Most mainstream users in the West will change technology every 2-3 years. Early adopters perhaps 6-9 months. Innovators 3-6. In Japan, technology changes every 30 days. 30 days! The Japanese consumer wants it compact, personalized, and jam-packed with every feature imaginable even if they aren't going to use those features. It's just good to know that biometric scanner is on your toaster if you ever need it. The electronics mainstream in Japan is shifted to the left, closer to the early adopters and innovators. So there isn't much of a market for second-hand electronics goods. By the time you tire of it and get around to selling it, next month's crop of hot, new gadgets will be out and no one will bother with an old model. The majority of used cars from Japan are actually exported. Some 1.5M cars were exported from Japan in 2007 (ref: Japanese Used Motor Vehicle Exporting Association). These are mostly to neighbors, namely Russia, New Zealand, and South East Asia. So if second-hand goods don't play well locally, what might a Japanese Classifieds strategy take? I can think of three:- exports
- exchange
- expat
Lost and Found in Tokyo
If you lost $250 or your shiny new iPhone on a train in New York, what chance do you think you'd have of getting it back? Air-bound swine and Hell-popsicles come to mind. In Tokyo, I'd be shocked if you didn't get it back. That's because Japan has an old culture of turning found items in to a government official. The law dates back as far as the early 8th century, and has been updated several times since, the most recent in 1958.
My information is very old--I have a call into the Tokyo Metropolitan Lost and Found Center, but translations are a bit tough--but more than 2 million items pass through the Tokyo Metropolitan Lost and Found warehouse, with more than 7500 items being turned in every day. Somewhere in excess of $35M in cash is turned in each year. Yes, that's million with an "M."
Items can range from bus passess, to umbrellas, to cellphones (their most popular item). Each item is meticulously catalogued and archived in the system. After six months, unclaimed items can go back to the finder or sold. Tokyo makes something between $4M-$5M each year from the sale of unclaimed items.
Don't quote me on these exact numbers. My Japanese is pretty rusty (read: non-existent) and the clerk or officer helping me (can't tell which) seemed a bit shaky on the numbers himself.
Part of the reason for this imprecision is that the Tokyo Metropolitan Police Department seems surprisingly low-tech. I mean no disrespect here. Perhaps this is simply the low-tech site they show to gaijin like me: http://www.keishicho.metro.tokyo.jp/foreign/submenu.htm.
It seems to me that Tokyo Metropolitan is prime for a player to come in and create a national database and website to better catalog, track, and manage this vast inventory. The upside for such a venture? A tidy little Classifieds business for unclaimed items.
Future Directions
This model could easily be packaged and sold to metropolitan transit and police authorities anywhere. Take it a step further and integrate it with pawnbrokers to help police catch thieves at the point of sale. In Georgia, pawnbrokers are required to catalog items pawned/sold to them and report this in to the police. You know how this is done? Via spreadsheets and printouts. Now imagine a system where this is all online. A thief comes in to sell his stolen goods, as the pawnbroker enters the item into the system--via serial number presumably--it triggers an alert that is sent to a nearby squad car. As the thief steps out of the shop? Busted!
Now extend that same wonderful database into your SYI flow. I think that's a pretty compelling feature that no other online marketplace currently offers. 