eMarket Creation Strategy Lessons1

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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

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Lesson 1Humans 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

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Lesson 2Markets 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

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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

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Lesson 4eMarket Fit

• eMarkets must fit existing or planned business
  processes
• - Modify current systems processes to sync with
  eMarket
• Or
• - Adapt eMarket to current systems processes

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Lesson 5Several 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.

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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