eMarket for Lemons at Baruch College
I was recently invited by Dr. Karl Lang to be a guest lecturer at Baruch College on the subject of buySAFE and my experience starting an e-commerce business. I always love speaking to folks about buySAFE and its important value proposition (Making sure that buyers get what they pay for, and that merchants get paid what they deserve.), but I especially enjoy speaking with college students (in this case they were MBAs) about what I believe is happening with e-commerce today.
As many of you know, I believe there is a fundamental problem emerging with e-commerce. Specifically, the problem is that buyers have a very difficult time reliably telling the difference between good sellers/product and bad sellers/product. In economic terms, this is called "information asymmetry". Sure, if you are large, recognizable brand, buyers know they can trust you. However, if a merchant is unknown to a buyer, how in the world can that buyer reliably figure out if everything is going to be 100% okay? The answer is that it is very difficult for them to do so confidently.
When a marketplace suffers from information asymmetry, it inevitably develops into a "Market for Lemons". You can read my previous blog post on the subject at "What is a Market for Lemons?"
Obviously, buySAFE solves this major e-commerce problem, and as of Q2 2007, there are thousands of online merchants that have signed-up for the buySAFE service in order to help mitigate this issue for shoppers.
I thought you might like to see the presentation I gave the MBA students at Baruch. You can download the "eMarket for Lemons" presentation here, or you can view the presentation below.
I want to thank give a special thanks to Dr. Lang for inviting me to speak at Baruch College, and I especially want to thank the MBA students for their fascinating questions and additional insights.