eMarket CreationStrategy Lessons1 • How to design markets • How to implement markets • How to create and derive value (and profits) • eBay successfully created a new eMarket • 1 Adapted from Making Markets Work by Kambil and van Heck
Lesson #1:Humans Make Markets • eMarkets consist of: • - Human interactions supported by technology • - NOT Tech interactions supported by humans • Incorporate effects of human behavior into markets. • Create social context for exchange. • Think carefully about (using tech for) disintermediation
Lesson #2:Markets are Complex & Rich • An eMarket must provide for: • Basic Trade Processes • - Search, Price, Logistics, Payment, Authentication • Key Trade Context Processes • - Product representation, Regulation, Risk Management, • Influence, Dispute Resolution
Lesson #3: (with Liberty and) Value For All (Participants) • Value = Benefits/Costs • Must create value for buyers, sellers and market maker • win-win-win situation • Either Increase benefits or decrease costs of some market • mechanism • Market must be "Best" at something in order to be competitive
Lesson #4:eMarket Fit • eMarkets must fit existing or planned business processes • - Modify current systems & processes to sync with eMarket • Or • - Adapt eMarket to current systems & processes
Lesson #5:Several Skills Needed • You will create the: • - Market rules • - Market processes • - Market infrastructure • You will shape, drive and evolve the market • Creativity, Flexibility, Confidence, Persistence, et al.
Making Markets Work Stakeholder-Process Net Benefit Framework Stakeholders Buyers Sellers Market Makers Processes Search Pricing … Influence Dispute Resolution Net Benefits +/- +/- +/- For each process: 1. Map current structure of market processes 2. Identify how new technologies may be used to modify these processes 3. Assess impact of process modifications on each stakeholder 4. Develop strategies for attracting key stakeholders 5. Develop action plan for launching new exchange process