Steve Woda's blog

Thank you buySAFE!

Today, I am starting a new chapter in my entrepreneurial story. It is with both a bit of sadness and a lot of excitement that I share with you the news that I have left buySAFE to pursue other start-up and entrepreneurial interests. In addition, I have joined buySAFE’s Board of Advisors so that I can continue to assist the company in whatever fashion is necessary.  Click here to see buySAFE's announcement on the buySAFE blog.

After almost nine years of building buySAFE, I am leaving the Company in very capable hands, with fresh funding, and the brightest future that the Company has ever had. It has been a deeply satisfying experience to create something valuable, and I want to sincerely thank our customers, our partners, my colleagues and the many investors who made buySAFE possible. I am obviously looking forward to my next adventure, but I am also very much looking forward to buySAFE’s continued success over the coming months and years.

I founded buySAFE after getting burned in an online transaction on eBay. As a student, I didn’t have any extra money to lose to ecommerce fraudsters, and so I decided that there had to be a better way to buy and sell products online. buySAFE was born!

This adventure started for me while I was earning my MBA at Wharton in 2000, and as with all start-ups, there have been huge successes and great challenges. For me, both have proven to be invaluable learning experiences.

Developing buySAFE’s early business/technology plan, acquiring our major financial institution and strategic partners (including two major strategic partners to be announced in the coming months), and raising our $30 million in venture capital financing were all challenges that I ultimately found to be great learning experiences. Over time, I was able to lead almost every aspect of buySAFE’s business operations, and all of these experiences were amazing for me personally and professionally. I plan to share with you many of the lessons I learned at buySAFE over the coming months.

Perhaps the thing I am most proud of at buySAFE is our team. Early on, I recruited Jeff Grass, Tim Woda, and Hans Dreyer to buySAFE. Today, Jeff is buySAFE’s CEO, Tim is the VP - Sales, and Hans is the VP - Operations. They are the core of our team even to this day. The rest of our team is amazing as well, and it has been a pleasure working with each and every one of them.

I never intended to spend almost a decade working on my Wharton class project, but along the way, buySAFE provided me with an amazing opportunity to make great friends, to learn important new skills, and to see that anything is possible with persistence and creativity. It also taught me that you can’t build a company by yourself.

Although I could never hope to name all of the folks that deserve my thanks, I wish I could. A few folks in particular - my wife, my brother, and buySAFE’s employees, customers, investors, and advisors - have all obviously been invaluable to both me and buySAFE. To all of you, thank you! I sincerely appreciate your investments in time, capital, expertise, and support. There would be no buySAFE without you.

As far as the next chapter in my entrepreneurial story, I am not ready to share the details quite yet, but please stay tuned. I will share my adventures with you here on my blog, so if you are interested, please make sure to subscribe using the form below.

Thank you buySAFE!

Related posts:

"Steve Woda, Founder and Chairman of buySAFE, Pursues New Entrepreneurial Ventures" on the buySAFE blog

"Founder of buySAFE, Steve Woda, Steps Down" on AuctionBytes.com

Shopping Advisor approved by Mozilla for Firefox

After two months of testing in Mozilla's developmental sandbox, Mozilla approved the buySAFE Shopping Advisor for public distribution via the Firefox Add-on site starting this week.

If you aren't already using Shopping Advisor with your Firefox browser, you should install it as an add-on today.  You can check it out on the official Mozilla Firefox Add-on site here... https://addons.mozilla.org/en-US/firefox/addon/9009

I am obviously excited about this big milestone, and as always, I hope you will continue to provide us with your feedback, insights and ideas on Shopping Advisor over the coming weeks and months.

Have fun, and happy new year!

Steve

Dancing with First Round Capital

First Round Capital's 2008 Holiday Card (video) proves once again why every early-stage entrepreneur wants to find a way to meet with this terrific investor group.  Check it out! 

These guys are creative; they have been in the trenches themselves (multiple times!); they have been successful (multiple times!); and most of all, they like working with entrepreneurs because they are entrepreneurs.

I have had the pleasure of working with and knowing lots of technology investors, and along the way, I have learned a thing or two about who you want to try and work with (and what you want to avoid).  These guys are good.  Period.  In addition, their holiday video is brilliant, low-cost, and fun, and it highlights their strengths in an intangible, yet powerful manner.

Let me share one quick story that illustrates why I like these guys so much.  Although they won't likely remember it, both Howard Morgan and Josh Kopelman provided me with a helping hand while I was trying to get buySAFE launched back in 2001.  I was introduced to Howard via a mutual friend, John Tedesco, and Howard offered to meet with me in NYC and provide me with feedback on my business plan.  At the time, the venture was called BondMyAuction.  I was not ready for primetime, and yet, Howard spent two hours listening to me and coaching me on how I could improve my plan.  Howard also introduced me to Josh Kopelman.  At the time, Josh was an executive at eBay because he had recently sold his business, Half.com, to the ecommerce giant.  For no reason other than to be helpful to me, Josh also spent almost two hours on the phone giving me feedback and advice on how to proceed. 

I will be forever grateful for their assistance since I was no more than an aspiring entrepreneur with a paper napkin business plan.  Their help was both gracious and inspiring.  In many ways, they (along with a few others like them) gave me the extra motivation and confidence that I needed to stick it out through the inevitable challenges of getting a business launched.  Since then, I have tried to return the favor with other aspiring entrepreneurs because of their good example (although I am quite sure that I could never be as helpful as they were for me).

Again, check out First Round Capital's holiday video, and I think you will agree with me.  These guys are authentic, and entrepreneurs clearly have good reason to want to work with them.

Nice job Howard and Josh!  For everyone else, enjoy!  http://holiday.firstround.com/

Daily Roundup for 2008-04-21

• Report: Paid Search Top Acquisition Tool for Retailers - Adotas
  In a year of dismal retail sales projections, a recent report says Americans will continue to snap up clothes, computers and cars online. A Shop.org conducted by Forrester Research found that online retail sales should climb 17% this year to $204 billion.


• TheFind powers commerce in Elle's content community - Comparison Shopping Engine Strategies
  It's been said that content, community and commerce is the holy grail to Internet success, and that's just what TheFind is now doing. The partnership effectively creates a destination shopping site on Elle.com, leveraging TheFind's competency in lifestyle goods, piping in products from merchants that match ELLE's audience.

Daily Roundup for 2008-04-16

• Does Your Company Need a Chief Blogger? - Advertising Age
  It's a question marketers are still grappling with years after the first waves of corporate blogging flooded the web. But for better or worse, it seems corporate blogging -- and the title of chief blogger -- is beginning to hit its stride. Companies such as Coca-Cola, Marriott and Kodak all have recently recruited chief bloggers, with or without the actual title, to tell their stories and engage consumers.


• Brands Partner With Consumers Online - eMarketer
  These days, online consumers and companies are collaborating on a range of activities, including R&D, marketing and after-sales support.  Here are a few examples of how brands and consumers are working together online.

Daily Roundup for 2008-04-04

• Google's Gamble
  Can fewer clicks on its search ads lead to more revenue for Google? That is the question investors, analysts, and the company itself are trying to answer. The debate was launched after a Mar. 26 report from researcher comScore (SCOR) showed a decline in the number of clicks from the prior month on Google's search-related ads. According to the research firm, clicks on ads declined 3% in February from the prior month and were up just 3% compared to last year. Some analysts cautioned investors against buying additional Google (GOOG) shares; Google's stock declined 3% on Mar. 27, to $444.


• Mashup Security - Technology Review
  Mashups--online applications that combine data and tools from different websites--are becoming increasingly useful. Although they started out as simple consumer programs, such as a tool that placed housing listings from Craigslist onto Google Maps, mashups have grown in complexity and are becoming popular with corporations, too. As a growing number of tools are released to help people easily build mashups, experts are also taking a look at how to head off the security risks.

Daily Roundup for 2008-03-19

• Woman to record industry: Stop spying
  A woman who claims the recording industry's anti-music piracy campaign threatens and intimidates innocent people has filed a new complaint accusing record companies of racketeering, fraud and illegal spying.


• Startup RatePoint bets that people want user reviews refereed - Technology Review
  One of the great things about the Internet is the way people post reviews on just about anything you are considering trying, whether it is a movie, a new restaurant or the local florist.  This also introduces one of the worst things about the Internet: trying to figure out which reviews to trust. Was that effusive praise written surreptitiously by the merchant? Was that anonymous online slam posted by a devious competitor?  The dilemma might be unavoidable in this age of abundant user-generated content, when we have to be smarter about separating signals from noise. But a startup called RatePoint Inc. begs to differ. It wants to play referee, giving consumers more clarity into a business' reputation and protecting the business from unwarranted blights on its credibility.

Daily Roundup for 2008-03-03

• Lessons in building a better widget
  By giving an audience widgets that provide a service and make their lives more interesting or convenient your brand will be on its way to far more free real estate than you ever expected.  In helping brands develop widget presences, I can say that for brand managers and agencies alike, the first time through can be an emotional roller coaster. Early in the process, brainstorming sessions are filled with far-flung, fantastic ways to bring enterprise information into the everyday lives of the audience.


• Comparison shopping engines more important for some products than others - InternetRetailer.com
  Comparison shopping engines are an important part of the e-commerce channel marketing mix, Scot Wingo, CEO of e-commerce channel management services vendor ChannelAdvisor Corp., tells Internet Retailer. But they’re a better spend for some categories than for others, he adds.  Wingo says, for example, that comparison shopping engines are strong in categories such as consumer electronics, less so with products such as apparel and jewelry. That disparity is partially a function of how matching on the engines works. Consumer electronics products have a multitude of hard attributes that lend themselves to point-to-point comparison, for example, while jewelry and apparel selection relies more on a shopper’s subjective opinion.  That said, ChannelAdvisor customers spend anywhere from 15% to as much as 40% of their online marketing dollars on comparison shopping engines

Daily Roundup for 2008-02-29

• New York Comes to Silicon Valley
  The relationship between the venture capitalists of Sand Hill Road and the securities firms and power investors of Wall Street has long been a cozy one. VCs hoping for a return on their investments will need banks eventually, while Wall Street needs VCs to nurture the most promising startups until they're ready to go public.  Or do they?  Lately, some of New York's biggest players have been cherry-picking the best pre-IPO investments for themselves.


• Yelp Critiques Heard and Heeded in D.C. - washingtonpost.com
  Although the tiny, family-run Joy's Spa and Nail Salon in Adams Morgan may never get a critique in a newspaper, it's received 42 reviews on Yelp.com.  Reggie Tull, the owner's son and a massage therapist, said he noticed an increase in traffic with every new review posted on the recommendation site. He's also surprised by the time writers invest in each posting.

The eMarket for Lemons at The Wharton School

I had the opportunity to speak at The Wharton School, University of Pennsylvania last week about an article that Dr. Eric Clemons recently authored for the Journal of Management Information Systems, "An Empirical Investigation of Third-Party Seller Rating Systems in E-Commerce: The Case of buySAFE".  My presentation was focused on marketplace economics and specifically about information asymmetry, signaling, the "Market for Lemons" concept, and buySAFE.  In addition, I was able to share a few thoughts about my entrepreneurial experience with buySAFE.

As always, I had a great time as the guest of Dr. Eric Clemons, and I enjoyed hearing the passionate questions, insights and feedback from the students.  One of the students posted an article about my visit on his blog, The Un-Wharton. 

AuctionBytes Conducts Online Shopping Survey

AuctionBytes.com, one of my favorite ecommerce news sources, is conducting another survey to study online shopping behavior.  The survey explores a number of areas that are important for small business ecommerce merchants to fully understand about their customers.  If you have a few extra minutes, I encourage you to complete this survey.  Ina Steiner, the editor, will publish the survey results in a few weeks, and I will make sure to share with you as well.

You can complete the survey here >> http://www.surveymonkey.com/s.aspx?sm=vX4t6OvcNW0_2fO8NFL8pFuA_3d_3d

The eMarket for Lemons and The University of Maryland

Last week, I had the opportunity to speak to a few hundred business school students at the Robert H. Smith School of Business, University of Maryland.  Michael Beveridge, buySAFE's VP of Business Intelligence, joined me in speaking at the invitation of Professors Guodong (Gordon) Gao, Peter Weiss, and Mingfeng Lin.  The students had previously read "buySAFE - Creating and Profiting From the Bonded Seller Advantage", a case study on buySAFE authored by Wharton professor, Dr. Eric Clemons.  Here is the presentation that Michael and I shared with the students... "eMarket for Lemons - The Economics of an Evolving eCommerce Marketplace".

As always, it was a terrific experience for me.  The students were extremely prepared, and they had definitely done their homework on buySAFE, information asymmetry, and the ecommerce marketplace in general.  If you ever want to get an excellent sense of how well your marketing efforts are working or how well you are educating the market about your solution, I highly recommend inviting a couple hundred college students to study your product or service and let them give you feedback.  I loved it!

Read more about Dr. Guodong (Gordon) Gao >>

Google is an advertising cheapskate!

What is the most valuable brand in the world?  Google is the number one brand in the world with an estimated value of $66 billion according consulting firm Millward Brown Optimor. 
This got me thinking... How did Google become the most valuable brand in the world in just a short nine years?  As the Founder of a consumer-focused internet company, I find this question very interesting.  Conventional wisdom would suggest that Google must spend billions of dollars in advertising every year to accomplish such an impressive feat.

Well after a bit of research, one thing becomes clear... Google is an advertising cheapskate!

Chicago Will Host eBay Live 2008

If you are an eBay fan (as I am), and you live in the Midwest, you will be very happy to learn that eBay Live 2008 will be held in Chicago.  eBay has not yet announced the decision, but Ina Steiner, a very authoritative source on all things eBay, has broken the story in her "eBay Live 2008 to Be Hosted in Chicago" blog post.

There are a number of major companies in the e-commerce ecosystem, both merchants and third-party service providers, that have decided to skip eBay Live 2007 in Boston in the interest of attending other prominent e-commerce conferences (buySAFE is one prominent example).  All of of us who own equity in eBay are rooting for them to regain their shine, and so perhaps Chicago and 2008 can be a resurgence opportunity for eBay and their ecosystem.

Scam of the Month - Judge Judy Punishes an Idiotic eBay Fraudster!

In this "scam of the month", Judge Judy takes on an eBay fraudster and ultimately hands out the maximum punishment.  In spite of the fact that this scam seems audaciously ridiculous, it is actually quite common online.  Bottom-line, there are a lot of folks out there that lack any semblance of a moral compass.

My inspiration for starting buySAFE was a similar scam that I fell victim to on eBay during the summer of 2000.  The only major differences that I can point to are that I purchased a $400 PDA, and instead of taking the scammer to court with Judge Judy, I decided to instead start a company dedicated to making every online transaction trusted, reliable and risk-free... buySAFE!

Next time, I hope these two innocent victims limit their purchases to buySAFE merchants.  It will save them a whole lot of anguish and effort!

Watch this video.  It is quite enlightening.

Related articles:
"Judge Judy Episode on eBay Trust & Safety" on Psychohistory blog

eBay Merchant Economics

I recently asked Michael Beveridge, buySAFE's Sr. Director of Business Intelligence, to share with us some of the interesting eCommerce data that buySAFE has developed over the last eighteen months.  We consider data and analytics to be critical to buySAFE and our merchant customers' businesses, and obviously, every merchant is interested in having solid, reliable data on the ROI associated with buySAFE.  At the request of hundreds of our merchant customers, buySAFE has invested heavily into developing an amazing data and analytics platform that can deliver incredible insights beneficial to buySAFE Merchants.  We will be sharing some of our new insights with you over the coming months, and I hope you enjoy the content. With that intro, here is Michael Beveridge's first contribution to this blog...

buySAFE and eBay Live 2007

It's official. buySAFE is going to throw a terrific event in Boston the second week of June.  However, the company has decided to skip exhibiting at eBay's annual conference, eBay Live. Instead, buySAFE has decided that it would rather participate in a number of other e-commerce conferences that it believes provide better return on investment including the huge Internet Retailer Conference in San Jose. You can read about buySAFE's eBay LIve 2007 decision on the buySAFE blog article - "Are You Going to eBay Live?".

I have a lot to say on this subject that I believe you will find quite interesting.  However, in the interest of time this morning, I will have to revisit my eBay Live thoughts in the coming weeks.  Please stay tuned.

See you in Boston!

eCommerce's "Shoot the Messenger" Strategy

When it comes to online fraud, the e-commerce industry seems to hate looking itself in the mirror.  Specifically, e-commerce executives cringe at the mere mention of the existence of online fraud.  Their first reaction is almost always to blame the messenger for sharing tough information about the industry rather than actually tackling the core issues driving the online fraud that victimizes consumers for millions of dollars every day.

I ran across the following quote from Scot Wingo of ChannelAdvisor in this blog post regarding eBay's VP of Trust & Safety appearance on the Oprah Winfrey Show:

"Unfortunately it's never a positive when there's someone with Oprah's reach out there associating eBay+fraud so I think it was a net negative."

I have learned from experience that Scot Wingo is a very smart guy, and he has proven to be a vocal educator regarding the e-commerce industry.  When necessary, he has also had the courage to stand up and point out what isn't working in the e-commerce industry.  My interpretation of Wingo's comment is that Chestnut's appearance wasn't a good thing for eBay's short-term prospects or stock price.  I would agree with that.  However, I do not believe Wingo was suggesting that coverage and discussion of online fraud problems are a bad thing for eBay or e-commerce in the long-run.  If that was his suggestion, I would disagree with that.

Scot's comment did make me think about an alternative point of view that I have heard many times from e-commerce executives over the years. I often the hear the following question from execs almost verbatim: 

"Don't you think that by talking about online fraud you are blowing the issue up way beyond proportion and scaring consumers away from e-commerce?"

When I hear that question, I cringe because it displays a fundamental lack of wisdom.  Wake up everybody!

Today, more than 50% of all online surfers don't buy ANY merchandise online!  That is a ridiculously high number, and when surveyed, these non-buyer internet surfers overwhelmingly cite distrust of and nervousness about e-commerce transactions.  Is that because the industry talks about the online fraud problem too much?  No!  It is because online fraud is, in fact, a huge problem as reported by many sources including the Federal Trade Commission.  Almost everybody knows somebody that has been burned on the internet.  Don't you?  The 50% of internet surfers that avoid eCommerce do so because, to date, the industry hasn't solved the problem for consumers. 

The industry consistently takes half-steps so that it can tell the press and consumers that "we are doing something".  My honest opinion is that it is a bit of joke (You will want to tune in tomorrow for a very specific example that will probably shock you.), and any smart e-commerce executive knows that is true.

Buyer protection plans and merchant rating systems are simply not enough.  If, for example, eBay's Feedback Rating system and PayPal's Buyer Protection were enough to make it completely safe for consumers, why does Chestnut have to go on Oprah and explain the issue?  Well, of course, he wouldn't.

If a crime happens in your neighborhood, most people want to know about it immediately so that they can take specific steps to protect themselves in the future.  It is no different in your online neighborhood.  Ignoring the problem of online fraud and shooting any messenger that points out that a problem exists is not going to help solve the problem.

In the long-run, Oprah's coverage of online fraud is a very good thing for eBay, e-commerce, online merchants and consumers!  Let me say that again... Disclosure, coverage, and discussion of the online fraud problem will help and inspire the industry to identify solutions that will be critical to the success of this industry in the long run.

The minute an effective, comprehensive solution to online frauds is adopted, consumers will buy merchandise on the internet like never before.  The minute we stop blowing smoke and we start solving the problem will be the minute e-commerce starts to tap into the ~100 million internet surfers who we can't currently count as customers.

Consumers want us to make it completely safe for them to buy online.  We owe it to folks to do just that. Don't shoot the messenger!  Understand the problem.  Discuss and debate it.  Then solve it!

Proposed solution to e-commerce-related fraud:
A trusted, objective, regulated third party needs to investigate the backgrounds, history and financial stability of online merchants and then, if the third party is willing to endorse the merchant, the trust & safety company needs to put its money where its mouth is by fully protecting consumers for any deviation from the promised terms of sale.  Obviously, that is what buySAFE does.

Related blog posts:
"buySAFE Invited By French Government to Help Stop Online Sales of Counterfeit Luxury Goods" by Travis Brown
"Stop Worrying! How to Solve the eCommerce Trust Problem. (A must read if you sell or buy online!)" by Jeff Grass
"What's Wrong With eBay? It's Simple Economics" by Steve Woda
"What is a 'Market for Lemons'?" by Steve Woda
"What's Wrong With eBay? It's Simple Economics" by PowerSeller King

Where Can You Meet the Largest Merchants on eBay?

Every couple of months, the Professional eBay Sellers Alliance (PESA) pulls together a collection of eBay's largest, most successful merchants.  These events are always terrific opportunities to meet experienced e-commerce professionals, and to get an insider's view of how the e-commerce market is developing.  Next week, PESA will convene its sixth PESA Summit in Chicago.

buySAFE has attended every one of these remarkable semi-annual events.  In fact, we have sponsored every PESA event since the organization's inception, so we are obviously a huge supporter of this organization.

Therefore, I wanted to give next week's PESA Summit a mini-plug.  If you are a professional merchant or simply interested in e-commerce because you are a member of the media, a financial analyst or a third-party service provider, you should attend this event.  You won't be sorry.  You will meet amazing folks and get the inside scoop on where e-commerce and eBay are headed.  Christie Hefner of Playboy Enterprises will be giving the Keynote Address.

As a side note, I will be speaking at the PESA Summit on an interesting panel of e-commerce experts including Jonathan Gariss (CEO for GothamCityOnline), Sloan Gaon (VP of Global Strategy for MIVA), and Jimmy Duvall (Director of e-Commerce Products for Yahoo! Small Business).  The Website Design & Web 2.0 panel should be very interesting, and I will provide a summary of the discussion on this blog after the event.

I am looking forward to it, and I hope you can find your way to Chicago for this terrific event.

Does eBay Have a Credibility Gap With Merchants in 2007?

As 2007 begins to come into focus, I thought it might be interesting to revisit an experienced PowerSeller's perspective on eBay.  Frank Ross writes the Common Sense eCommerce blog, and in November 2006, Frank provided his commentary on eBay's evolving relationship with e-commerce merchants.  Please give his blog post a quick review - "eBay Credibility Gap 2007".

Obviously, 2006 was a tough year for eBay and its merchants.  We regularly get emails on this subject from readers of this blog as well e-commerce merchants that work with buySAFE, and I don't believe 2007 is turning out to be much better.  However, I would love to hear from our readers.

If you are an e-commerce merchant, we would love to hear from you on this subject.  Please leave a comment on this post if you have thoughts on eBay and its evolving relationship with e-commerce merchants.

Technorati Tags: eBay, eCommerce, Economics

Antitrust Lawsuit Filed against eBay over PayPal, Payments Policies

AuctionBytes' Ina Steiner reported this week that an anti-trust lawsuit was recently filed against eBay.

'Michael Malone filed an antitrust class-action lawsuit against eBay this week under the Sherman Act, alleging eBay "utilizes its nationwide monopoly of the on-line auction market to monopolize the available forms of payment that sellers can use on eBay." eBay controls which payment methods sellers may advertise in their listings, and this year, it eliminated buyer-protection for non-PayPal transactions. eBay owns the PayPal payment service.'

The article also references the old conflict between PayPal and eBay.  Before eBay purchased PayPal, PayPal's management team prepared an anti-trust lawsuit against eBay and threatened to pursue the action.  Ultimately, PayPal did not file the anti-trust lawsuit, but it is ironic given the current lawsuit's claims.

Very interesting stuff.  We will have to keep an eye on how this develops.

buySAFE on The Today Show!

The past few days have been quite exciting here at buySAFE.  Last week, buySAFE was featured on The Today Show.  The "Designer Duds: Fake or Real?" segment, reported by Today's consumer affairs reporter Janice Lieberman, discussed the growing e-commerce problem of counterfeit luxury goods.  As expected, buySAFE was showcased as a terrific solution to the counterfeit goods problem.

Counterfeit/fake/stolen goods are obviously becoming a major issue for e-commerce, but in my opinion, this problem is actually a symptom of a much larger, more important, fundamental problem... Online, buyers have a very difficult time discriminating good sellers/product from bad sellers/product.  The REAL problem is that the Web suffers from major information asymmetry issues.  That is why bad guys are successful at defrauding consumers. 

Please think about my diagnosis for a moment... If consumers could tell the difference from the good guys and the bad guys, would shoppers ever unknowingly buy a counterfeit item?  Of course not!  Fraud happens because of information asymmetry.

I think you will find the "Designer Duds: Fake or Real?" news segment very interesting.  However, as you watch this clip, please understand that the counterfeit/fake/stolen goods fraud problem is due to a more fundamental e-commerce problem... Buyers can't reliably tell the difference between the good guys and the bad guys!  In economic terms, this is called information asymmetry, and it is causing legitimate, professional merchants millions of dollars each and every day.

Kudos to Jeff Grass, buySAFE's CEO, for a job well done!

Related blog posts and e-commerce articles:
"Designer Duds: Fake or Real?" by Janice Lieberman on The Today Show and iVillage.com
"buySAFE Invited By the French Government to Help Stop Online Sales of Counterfeit Luxury Goods" by Travis Brown on the buySAFE blog
"eBay Bonding Service buySAFE Featured on Today Show" by Ina Steiner on AuctionBytes.com
"buySAFE Appearance on 3/20/2007 Today Show" on AuctionBytes.tv

France, Luxury Goods, and the Counterfeit Problem

Travis Brown, buySAFE's General Counsel & VP of International, recently spent a week in France as a guest of the French government.  The purpose of the trip was to learn more about the exploding counterfeit goods industry, and to explain how bonding merchants and buySAFE could significantly mitigate this  huge problem.

I found Travis' post to be one of the best I have ever read on the issue of counterfeit goods, and I am sure you will agree.  I encourage you to give it a quick read.

"buySAFE Invited By French Government to Help Stop Online Sales of Counterfeit Luxury Goods" by Travis Brown on buySAFE's blog

I am very interested in your thoughts and insights regarding the counterfeiting issue, so please share.

Related articles and blog posts:
"buySAFE Takes on the Issue of Counterfeit (Knock Off) Merchandise" by Fraud, Phishing and Financial Misdeeds

Wake Up With buySAFE on The Today Show

It’s been a lot of fun (not to mention a lot of hard work ;-) to see buySAFE grow from an idea in my head into a company that is changing the face of e-commerce. Knowing how far we’ve come makes it exceptionally rewarding when major, national news outlets cover buySAFE and the impact we are having.

One such news outlet – The Today Show on NBC – will be including buySAFE in a story that will run tomorrow, March 20 shortly after 8:00 a.m. Consumer reporter Janice Lieberman spent the day at buySAFE headquarters last week as part of a piece about the prevalence of counterfeit luxury goods being sold online. With consumers often unknowingly buying knockoff merchandise, it’s tough to know how to protect yourself from becoming a victim.

Fortunately, buySAFE solves this problem. By certifying that a merchant is trustworthy and reputable, identifying the merchant with the buySAFE Seal, and taking the extra step to guarantee the transaction, buySAFE ensures a safe, smooth transaction for consumers every time. Rather than worrying about having bought a fake, shoppers that buy from a buySAFE Merchant can rest easy knowing that they’re dealing with one of the safest merchants anywhere.

I encourage you all to tune in the Today Show tomorrow, March 20th at 8:00 a.m. to see how buySAFE is making e-commerce safer and more efficient for everyone involved.

Auction Fraud Tops FBI's 2006 Internet Crime Report

As reported by Fraud, Phishing and Financial Misdeeds, auction fraud continues to be a huge problem.

The FBI has released its 2006 Internet Crime Report, and 45% of the Internet crime complaints in 2006 were for auction fraud.  You can read the Internet Crime Report here.

I have to be quite honest.  I am pretty disappointed in our Internet industry.  I believe there are too many folks willing to ignore this issue in the interest of making millions of dollars in profits.  Consumers continue to bear the brunt of the industry neglect, and in my humble opinion, the thinking is too short-term.  If these problems continue to get worse, it could permanently damage and alter the ecommerce landscape.

What do Digg and eBay Have in Common?

Written by Guest Blogger, Lauren Davis - Georgetown Law student

What do Digg and eBay have in common?  Their rating systems are under assault by the fraudsters, and in some cases, this mischief is undermining the systems' credibility and effectiveness.

There has been a great deal of buzz surrounding a recent article in Wired magazine. The piece, entitled “Herding the Mob,” notes that online retail sites, such as eBay and Yahoo Auctions, and social bookmarking sites, including Digg, del.icio.us, and Reddit, share a common problem: the gaming of their community-based systems.

International Visitors Drive eBay Traffic

This AuctionBytes article by Lissa McGrath is a couple of months old, but I find it to be quite fascinating. 

During this past holiday shopping season, about 70% of eBay's website traffic came from beyond the United States' borders.  Wow!  Obviously, the international Internet is the real deal in 2007.  I haven't spent any time independently analyzing this traffic data, but if true, it provides a fascinating view of how the eCommerce marketplace is evolving.

eBay and Seller Certification

Skip McGrath is the CEO of Auction Seller's Resource - a terrific newsletter for professional eBay merchants and for those folks aspiring to make a living on eBay.

Skip recently posted a series of interesting articles on the subject of seller certification on eBay.

Part 1
Can Seller Certification Bring Buyers Back to eBay

Part 2
eBay Selling Tools To Build Your Business by Preventing Fraud

Skip has done a nice job of laying out a number of things to consider, and I encourage you to give his posts a read. 

I believe Seller Certification is part of the answer for eBay (and eCommerce in general), but my big fear is that a bunch of eBay marketing folks will get together and roll out a new "seller certification" program, and that the program will fail to actually do anything meaningful for buyers or the economic health of the eBay marketplace.  Tough, effective "seller certification" programs actually require that you have to tell some sellers that they CAN'T be "certified".  In my experience, marketing folks don't like to tell current or prospective customers that they can't do business together.  Tough, effective certification programs are designed to limit the players on the field, and this is usually counter to everything the marketing folks think about each and every day.

Google acquires Jotspot and its Wiki service

One of my favorite online services, JotSpot, was just acquired by Google.  JotSpot provides a robust do-it-yourself publishing application enabling anyone to create, publish, and share collaborative and personalized wiki applications.  JotSpot powers the wikis for thousands of businesses, and many of them are major brands including eBay.

PayPal to the rescue

Q3 financial results were announced today, and eBay's profits were up 10%.  That is good news for this battered stock, and it appears that lower taxes and PayPal were the major contributors.

eBay My World enters the world

eBay is rolling a new feature on their site called eBay My World (or at least I think it is new since I haven't seen this in the past).  You can check out my eBay My World page to get a sense of all the functionality they are pulling into one single page including Feedback Ratings, eBay listings, eBay blog posts, and biographical information.

buySAFE Announces New Partnership With Travelers

Today, buySAFE announced a new partnership with The St. Paul Travelers Companies, one of the largest financial institutions in the world with more than $113 billion in assets.

The new Travelers relationship adds another major U.S. financial institution to buySAFE's growing team of business partners.  The Hartford Financial Services Group and The Rutherfoord Companies are major investors in buySAFE, and in 2005, Liberty Mutual Insurance Company joined with buySAFE to provide significant surety bond capacity for buySAFE's rapidly growing business on eBay, Overstock.com, and TIAS.

eBay Feedback Farms Undermine Feedback Ratings System

Last week, Ina Steiner documented the basic story of 'Feedback Farms' on eBay.

I have to be honest, these scams continue to amaze me, and one has to conclude that these scams are damaging and undermining the entire feedback/merchant rating system.  If fraudsters can so easily create feedback/merchant ratings in the thousands, then buyers will have to increase their vigilance online.  From a buyer's point of view, it continues to be more and more difficult to truly discern good from bad.

Greg Isaacs is Leaving eBay

Greg Isaacs, Director of eBay's Developers' Program, is leaving eBay after more than five years at the firm.  No announcement yet on what Greg will be doing, but one thing is for sure, he will be missed at eBay.

Good luck Greg.

Avoiding eBay eMail Scams

The following blog post provides basic, wise advice on how to avoid eBay / PayPal email scams.

"eBay and eMail Scams" at keep my engine running...

If you are interested in eBay, this blog is worth keeping tabs on.

Related blog posts:
"Top 10 Tips to Avoid Phishing Scams and Identity Theft"
"Richard Clarke's Views on Identity Theft" at Fraud, Phishing and Financial Misdeeds

What is a "Market for Lemons"?

I have had a number of eBay merchants write me about a post that I made earlier this week suggesting that eBay seems to be displaying the early signs of a Market for Lemons problem (Some would argue it is far beyond the beginning stages, but I will let you debate that with your comments below).

Without focusing on eBay or eCommerce in general, it has been requested that I illustrate a simple example of how a "Market for Lemons" develops.  Obviously, there is a lot of academic research on this subject (I posted a Wharton case study by Dr. Eric Clemons earlier this week, and you won't want to miss it since it discusses eBay's challenges in greater depth.), and almost everybody has heard the "Market for Lemons" term utilzed at some point.  Wikipedia provides a basic overview of the Market for Lemons economic concept, so I won't regurgitate what you can read elsewhere.

In short, the "The Market for Lemons: Quality Uncertainty and the Market Mechanism" is a paper written by George Akerlof in 1970 that describes what happens to markets that suffer from information asymmetry problems.  Ultimately, Dr. Akerlof won the Nobel Prize for Economics in 2001 (along with Michael Spence and Joseph Stiglitz) for his analysis of markets with information asymmetry.  While I was at Wharton, I was fascinated by the implications of this research on eCommerce marketplaces.

What's Wrong With eBay? It's Simple Economics

What's wrong with eBay?  Before I answer this question, you should download this Wharton case study by Dr. Eric Clemons of The Wharton School, University of Pennsylvania.  Dr. Clemons is one of the world's most renowned experts on information economics, and this case study is currently being taught at Wharton this semester.  It goes into great detail discussing eBay's current challenges, and I believe you will find it insightful.

Okay back to the question...  What's wrong with eBay?

How Do You Sell Profitably on eBay?

I have been writing quite a bit lately on eBay, and on the developing stories of lagging buyer demand and poor seller economics.  Every data point suggests that it is tougher to sell profitably on eBay these days, but it isn't impossible.  There are eBay sellers making a nice living on eBay, and in general terms, the key is to differentiate yourself, to sell products where there is limited competition, and to operate very efficiently.

eBay Sellers Leaving eBay to Sell Elsewhere

Yesterday, I mentioned some very interesting research that AuctionBytes recently completed with a survey of more than 1,000 eBay merchants.

The most interesting finding is that eBay sellers are leaving eBay's platform very quickly.  The chart below details where merchants are currently selling their product, and where they plan to sell product 6 months from now.  There is a massive 64% decrease in the number of sellers planning to sell on eBay 6 months from now versus today.

Google Planning Product Search for Holidays

The Professional eBay Sellers Alliance (PESA) held its semi-annual gather in San Francisco this past week.  The PESA Summit 2006 was a huge success with many of eBay's largest sellers in attendance in addition to many of the most important companies in ecommerce.  buySAFE has sponsored every PESA Summit since the group's inception in 2004. 

Although the group includes eBay in its name, most of these merchants are actually multi-channel retailers seeking to sell product whereever they can make reasonable profits.  These days, that actually means eBay sellers want to sell off eBay.  AuctionBytes has recently produced some very interesting research on the trend to move beyond eBay.  ChannelAdvisor's Scot Wingo covered eBay's challenges on his blog last week as well  I will be writing more about this trend over the coming days because it is obviously important for all of us in ecommerce.

Fall 2006 PESA (Professional eBay Sellers Alliance) Summit in San Francisco, CA

The Professional eBay Sellers Alliance (PESA) has announced that its Fall 2006 Summit will take place in San Francisco, California on 9/20/06 - 9/22/06.  I have attended three or four PESA Summits, and they are always fabulous events.  The attendees list includes many of eBay's largest merchants, and since most of them run fairly large multi-channel operations, these sellers also represent some of the most successful small and medium e-commerce retailers in the world.  Many of the largest e-commerce service providers will also be in attendance including eBay, Google, Overstock.com Auctions, Amazon.com, PayPal, buySAFE, ChannelAdvisor, and Infopia.  Therefore, the Summit is a great business development event as well.

If you haven't registered for the event, you should do so quickly.  The event is limited to the first 300 registrants.  You can register at PESA's website.

Top 10 Tips to Avoid Phishing Scams and Identity Theft

Earlier this week, I posted on the subject of eBay and PayPal phishing email scams.  It is impossible to completely protect yourself from the bad actors, but I wanted to share with you my recommendations on how to protect yourself from these types of scams.  The following are my top 10 tips on how to avoid phishing scams and identity theft:

1) Never click on the hyperlinks in emails
The text you see as an email hyperlink may be cloaked or hidden.  The cloaked hyperlink could take you to a website that you weren't planning to visit.  If you aren't completely sure of the source of the email, you should simply retype the URL directly into your browser.  This is one of the best ways to avoid fake hyperlinks and the threats associated with phishing emails.

buySAFE Hits the 3 Million Bonded Product Listings Milestone

There is big buySAFE news this week.  buySAFE passed the 3 million bonded product listings milestone.  The announcement was made on the buySAFE blog earlier this week.

This is exciting because it means that there are more than 3 million items for sale at buySAFE Shopping and bonded by buySAFE.  The Bonded Items can be found on eBay, Overstock.com Auctions, and TIAS.  In a few weeks, you will begin to see Bonded Items direct from merchants' website stores.  Obviously, the more Bonded Items avaiable for sale, the better the experience for shoppers looking to buy safely.  Therefore, this exciting news for everyone.

Congratulations to the entire buySAFE team!  Nice work.

How To Avoid PayPal Fraudsters

Ted Richardson at Fraud, Phishing and Financial Misdeeds had a great post last week on "The Art of Defeating a PayPal Scammer - Part II"  It is a good read, and Ted's tips are right on.

PayPal provides users a number of educational resources including "How to Spot a Spoof".  Also, eBay's Senior Vice President of Trust & Safety, Rob Chestnut, has written an eCommerce Safety Guide that I have found interesting as well.  You can listen to Rob Chestnut in this BusinessWeek interview, "Fighting Fraud on eBay".

In spite of all the work Rob Chestnut has done over the last few years to combat eBay frauds, emails that appear to come from eBay and PayPal continue to one of the biggest risks to online surfers in 2006.  I personally receive a half dozen fake eBay or PayPal emails a week, and I am not alone.

According to The Arbor Networks Security Blog, eBay and PayPal were the #2 and #3 targets of phishing attacks in the first quarter of 2006.  I have seen other stats that are less severe, but obviously, eBay and PayPal phishing emails are a major risk to consumers.

Obviously, the point here is to be careful when surfing online and reading your email.  I will provide you with my specific tips for avoiding phishing scams later this week.

Building Buyer Trust to Increase Sales on eBay

If you are interested in maximizing your customer conversions on eBay, you should check out the eBay Workshop I did earlier this week on "Building Buyer Trust to Increase Sales".  Obviously, I talk a bit about buySAFE, but there are a number of other things that I recommend as well.  Give it a read when you get a few extra minutes.  Many of the concepts I shared can be leveraged on your eCommerce site as well.

If you are an online merchant and you aren't focusing on maximizing buyer trust, you are leaving a lot of money on the table.  I refer to these lost dollars as the Trust Discount, and I detail the concept in my buySAFE white paper, "Turning the Risk Discount into a Trust Premium".

One last thought on the eBay Workshop, I want to thank Julie Milleson, buySAFE's employee #3 and up-and-coming marketing guru, for all of her help.  She actually did most of the work to make the eBay Workshop successful.  Thank you Julie.

Related Posts:
"Tune in to buySAFE's eBay Workshop tomorrow" - buySAFE blog

Rapleaf, Portable Reputation & Portable Trust

I had a very interesting conversation last week with a smart entrepreneur named Auren Hoffman in San Francisco. His company, RapLeaf, aims to enable portable reputation signals for people and merchants. I like almost everything I heard about what RapLeaf is trying to do, and I plan to keep close tabs on and cheer for their success.  I just signed up for Rapleaf, and you can see my Rapleaf reputation here...

I love the idea of portable trust and reputation signals.  These two things are obviously related, but it is important to note that they are different.

We consider buySAFE a portable trust signal for online merchants. Our objective is to become the world's leading eCommerce Trust & Safety company by making every online transaction trusted, reliable and risk-free.  So far, so good.  Today, you can find the buySAFE Seal on millions of Internet and eBay listings each and every day. At buySAFE, we enable merchants to leverage our powerful trust signal and bond guarantees across all of their eCommerce sales channels including eBay, Overstock.com Auctions, TIAS, and most recently, their web storefronts.

buySAFE's trust signal is very black and white. You are either bonded or not. As a buyer, you are either going to enter into a risk-free transaction with a Bonded Seller, or you are going to enter into an uncertain transaction with a non-bonded seller.  Regardless of your feedback rating, the equation is still the same...risk-free or uncertainty! It is really that simple. Please check out these two stories on some of eBay's former top feedback rating sellers to understand my point...GlacierBayDVD & Sell2All.

buySAFE believes that "no risk" is the only viable, future option for eCommerce. Buyers don't want "a little bit less risk" or "substantially less risk"..... As the eCommerce markets mature, "no risk" is the only real option that merchants will be able to offer consumers if they want to attract and convert sales. buySAFE obviously believes that certainty is a powerful concept in signaling and that it is the missing piece in ecommerce transactions with unknown entities (I will be posting a lot in the future on the economic concepts that folks must understand in order to optimize their sales online).

Having said all of that, it is not an easy feat to become a Bonded Seller. You have to be a professional seller with a good reputation, previous sales experience, minimum sales volumes, and adequate financial stability in order to be a Bonded Seller.

What I like about RapLeaf is that it signals to buyers that the individual/merchant has a history of transacting fairly.  It is essentially a portable reputation signal that individuals/merchants can leverage on all of their online sales channels.  Rapleaf doesn't ensure that you won't have a bad experience, but it is a nice reputation signal for those individuals/merchants that cannot qualify to be Bonded Sellers.  That really is a huge benefit for online shoppers.  Frankly, I believe there will be lots of Bonded Sellers that will enjoy the extra benefit of a portable reputation whether that comes from RapLeaf or eBay or whoever.

Obviously, buySAFE doesn't enable individuals to rate each other, and buySAFE has chosen to not to do this for a number of reasons. First, we started buySAFE on eBay, and eBay is very protective of its turf including its feedback rating system.  Obviously, the feedback system is critical to eBay's success thus far, but that doesn't mean it is the optimal system.  I don't believe it is, and I will be talking more about this in future posts.

One last thought... Scot Wingo did a very nice job touching on portable reputation signals back in March.  He is a very smart guy, and his post is very insightful on this subject.  I do not agree with all of his thoughts, but his insights are very important nevertheless.  Most specifically, I disagree with Scot's thesis that Google might be in the ideal position to provide a portable trust or reputation signal.  I believe buySAFE is in a far better position to provide the ideal portable trust signal for shoppers and merchants, and I hope to prove that to you over the coming weeks and months.

Google is an unbelievable company (I own its stock), but it is not an objective third party.  Payment providers and marketplaces, by definition, have to be buyer biased in order to create adequate buyer demand.  It is impossible for these firms to be effective "trust brokers" if they have any bias towards either party.  Google is now both a payments company (Google Checkout) and a marketplace (Google Base, AdSense, etc..).  By law, buySAFE has to be a discerning, objective mediator because we are regulated by the state insurance regulators in all 50 states.  We are required to protect buyers, but we are also required to protect the interests of sellers from bad buyers.  Google cannot and will not do that for merchants, and so, it can't provide the optimal portable trust or reputation signal.  eBay and PayPal are obviously hampered by the same challenges.

Of course, they could always use a simple merchant rating system, but again, merchant rating systems are extremely imperfect signals, and the merchant ratings are not backed up by foolproof guarantees of seller performance.  Coincindentally, Ina Steiner of AuctionBytes wrote on the subject of Google's Rating System this morning.

We will be talking a lot about eBay, Google, the economic concepts of signaling, and online trust & safety over the coming months, and I hope this is helpful for you.  Again, I am excited about Rapleaf, and I am cheering for their success.  I am not sure what they will be able to do with their business model, but I definitely see the value they can provide online shoppers.  Good luck Auren!

eBay Express goes live

eBay finally launched eBay Express last night. It is clean and simple. I like it much better than the old eBay because the search process seems so easy.

Having said that, the proof will be in the pudding.  We will be watching this very closely, and I will be getting feedback from buySAFE's customers over the coming week and months.

Microsoft offers challenge to eBay and Google Base

Microsoft has finally launched its Windows Live Expo. eBay now has to consider not just the competitive threat of Google and its Google Base, but now Microsoft as well. Although 2005 was a very interesting year for eCommerce, I believe 2006 is going to be even more exciting. Obviously, the Live Expo site is brand new, and so the functionality and inventory of listings is still pretty light. However, like almost everything that Microsoft decides to tackle, I expect Live Expo will ultimately be a decent eCommerce channel at some point soon. For every eCommerce entrepreneur that makes a living selling online and for every company that supports these online merchants, the additional online competition is likely to bring new opportunity and decreased dependencies/risk. For most of us, Microsoft's entry is a positive event.

Key info for your trip to eBay Live! 2006

If you haven't been to eBay Live! before, you don't know what you are missing. It is an amazing experience. Lot's of eBay buyers, sellers and employees, and every major third party service provider you can think of. It is a good time, and a great business opportunity. This year, the event moves to Las Vegas, and I highly encourage you to attend if you can make it.

If you are interested in joining us at eBay Live!, I want to give you a couple of quick suggestions to help you make the most of your trip...

1) Do your homework, and plan out how you are going to leverage the experience ahead of time. Besides the official eBay Live! site, one of the best resources you will find on the event is the Going to eBay Live! 2006 blog. The blog is published by a number of eBay sellers, and they are the real pros. I promise you that their experienced view of eBay will be helpful for you. You might enjoy their perspective on the craziness of eBay Live! as well.

2) Attend the classes. eBay Live! is a terrific educational opportunity, and we can all learn something new about this dynamic eCommerce channel. There is something for everyone.

3) Make sure you make it to the 4th Annual eBay Live! Meet & Greet Party on 6/12 at The Beach Las Vegas . The party aims to pull the eBay community together the night before things really get going. There is an interesting history behind the event, and I promise you that you will meet new friends and renew old acquaintances. Again, the party is a blast, so don't miss it.

4) Visit as many of the exhibitor booths as you can. The eBay marketplace is extremely robust, and one of the major reasons for its success is the eBay community including the third party service providers. The exhibitors at eBay Live! represent all facets of the eBay ecosystem, and by visiting booths and asking lots of questions, you will inevitably learn something new about your business, the marketplace, and how you might be more successful in 2006. I encourage you to stop by and say hello to us at buySAFE. We will be at Booth #831.

I look forward to meeting you at eBay Live! in Las Vegas. Don't miss it!