Blockchain’s Public Market Hopes To Take A Byte Out Of Amazon, eBaybr>
KJ Erickson is co-founder and CEO of Public Market, a decentralized e-commerce platform that eliminates the transaction fees imposed by today’s traditional digital commerce marketplaces like Amazon and Etsy. Instead, it replaces them with a blockchain token that rewards buyers for purchasing from the community.
Erickson has 14 years of experience as an entrepreneur, with past ventures backed by top VCs, including Greylock, Foundation Capital, Norwest and Maveron. Her Y Combinator-backed company Abundance Labs created Simbi, the world’s largest services marketplace run on a digital currency.
She talked with Block Tribune about Public Market plans.
BLOCK TRIBUNE: Where did the idea for the service come from?
KJ ERICKSON: Public Market is an E-commerce marketplace. It’s backed by a protocol that, ultimately, anyone can build marketplaces on top of this shared inventory set that we’re amassing. And it’s all inventory from third-party sellers, meaning independent sellers that sell on Amazon or eBay, or the major market places that charge them really high commissions and fees.
And so our founding team has a diverse background across marketplaces, alternative currencies and e-commerce, and has really experienced first-hand both the economic inefficiencies that arise from these monopoly marketplaces, that basically are gouging sellers and making prices much higher for buyers. And also what impact that actually has on the sellers themselves.
So, we set out to create an alternative business model that is fundamentally commission-free and non-monopoly-izable. We’re taking these proprietary data sets that used to live only on the hood of the private marketplaces and are used to extract these large commissions and fees, and making them public and open-source, so that anyone can sell that inventory without these large commissions.
BLOCK TRIBUNE: How would this work for somebody who wants to sell on your service? What would they need to do?
KJ ERICKSON: So, right now, we have a product that is in a closed beta. But once we open it up, we have both a self-service option so that sellers, if they want to manually upload their products – like you would do into Etsy – can do that for smaller sellers. But for larger sellers who we are mostly catering to, we either build a direct integration to them, or they work with one of our partners that we have already built a direct integration to and use our self-service APIs.
So what they’re doing is basically sending out the same data feed that they already are sending to Amazon or eBay or these major marketplaces that they’re selling on. And in that case, it’s made to work within these existing sellers’ current workflows, and not add any additional work, right? So they manage their orders and inventory in exactly the same way they did before, once they’ve integrated their data feeds to us.
BLOCK TRIBUNE: Okay, how does your company make money from this?
KJ ERICKSON: So we’re set up so that the protocol itself is in a non-profit and therefore, it only has to operate at cost. And we’ll use open-source developer talent, et cetera. We’ve got a bunch of business models that are alternatives to charging commissions. So, for example, providing seller services so that sellers have additional tools to manage their orders’ inventory, even manage them across multiple marketplaces. And other tools that allow them to gain promotion and attention within the service. But the fundamental difference being that we don’t need to be profitable and charging fees to get to that profitability.
BLOCK TRIBUNE: Are you doing an ICO?
KJ ERICKSON: We’re doing an equity raise. But it’s in a private sale. So under the restrictions, so we can’t talk about it publicly.
BLOCK TRIBUNE: Are you going to take a small bite out the existing ecosystem for these type of trades?
KJ ERICKSON: Absolutely. The value proposition that we provide for buyer is ultimately that they get to save most of the money that otherwise was going to the marketplaces. And that could be up to 20-30 percent on every purchase. So as long as we have the logistics at the level that they’ve come to expect, the buying experience at the level they’ve come to expect, and the selection at the level that they’ve come to expect on the private marketplaces, it’s a much better alternative for them, because they’re buying the same products they would otherwise, getting that same convenience, but effectively saving a lot of money on every purchase and earning tokens as rewards points.
BLOCK TRIBUNE: Since this is going to be decentralized, what’s your role in the deal between buyer and seller? Do you have one?
KJ ERICKSON: Yeah, we do. We actually are posting this morning an article on our path to decentralization, because there’s certainly several elements of the existing experience and protocols that are currently centralized based on data, the technology, et cetera. So because customers are purchasing things with their credit and debit cards, there has to be a payment processor, and we provide that. We build the software, we obviously host it ourselves at this point and host the data sets so that eventually, when the technology can handle these massive data sets that are getting updated with a very high degree of frequency, that will ultimately get decentralized. But at this point they’re not ready for it, so we’re taking a more pragmatic approach to what needs to be decentralized at what point.
BLOCK TRIBUNE: Do you have anything you want to tell me about that I didn’t ask you about?
KJ ERICKSON: I want to tell you about our flagship storefront, or the first marketplace that’s built on this open-data protocol. It is currently in private beta. You can sign up for the wait list at public.market to get up to the top of the wait list. We’re starting to let a lot more people in. You can currently buy any of five million unique products and we’re adding new products and new categories every week. So, I encourage people to go there and sign up because they can start earning rewards credit with every purchase.