Peter Evans, Chief Strategy Officer at McFadyen Digital, shares how marketplaces are disrupting traditional businesses. Peter has over 20 years of experience leading teams in assessing, framing, and implementing high-priority marketplaces that support business planning. He specializes in helping companies see around corners, anticipate key market trends, and craft platform and marketplace strategies that drive major multi-year growth initiatives.
00:00 - Introduction
02:04 - Components of a modern marketplace
05:51 - Marketplace being layered in a tool that can make better recommendations
10:45 - The state of B2B - Web 3.0, NFTs, and metaverse
13:41 - The marketplace and community on the B2B side
18:08 - The need for a community in a blended world of digital and physical
20:30 - Insights into the "Platform Summit"
22:10 - Defining a platform
28:06 - Who should be the owner of a marketplace in a B2B setting?
29:05 - The explosion of communities in B2B
36:09 - What the platform summit is all about
39:39 - Creating a marketplace
42:00 - Tax issues in the marketplace
But you need community, and there will be a community centered around a blend; and that's what we're doing. We're moving into this blended world of digital and physical. A lot of the community is to keep people together until their next physical event.
00:17
Everybody, we're back for another episode of Unlearned. Do you know what I realized this morning, Kelly? If you put chocolate on it, it tastes better. Do you know?
00:38
Thanks for your hot tip; it'll help you sell better, I'm sure.
00:51
But it makes your coffee taste great. Yeah. All right. So, we have another guest today, Peter. Do you want to introduce yourself? And then we'll kick the podcast off.
01:00
Sure, Hi. My name is Peter Evans and I'm the Chief Strategy Officer at McFadyen Digital, which specializes in providing strategy assessments and implementations to marketplaces all over the world.
Asher Mathew
01:16
The thing I love about the podcast is that we don't know what guest is going to show up or what topic we're going to discuss, so it's new for everyone. It's just like all of us meeting at a Starbucks, you know?
01:28
Sounds good!
01:29
And Starbucks,
01:31
Sorry, are you saying Tim Hortons? Because you like Tim Hortons? Is that what I heard?
So, Peter, where are you based?
01:40
I live in Denver now. I just moved here a year ago, and, yeah, getting acclimated and, learning what it's like to live out West.
01:50
And do you want to tell us a little bit about your journey and how you got to McFadden?
01:54
Yeah, sure. So, wow, that's a long journey. But, I've spent years in academia. I did my Master's and Ph.D. at MIT and focused on international things. I lived in Japan for four years. and so I know a bit about Asia and then after I finished my Ph.D., I got picked up by General Electric's Elite Strategy for their energy business.
And that was big, because it's a big business: oil, gas, and power. So, I know a bit about the industrial space. But there was this thing about what they call the 'Internet of Things' kicking around at the time.
And so, I ended up working a lot on that and wrote the white paper that was announced GE’s effort to become a digital industrial enterprise.
So, that was sort of my first introduction to this, and this is over a decade ago now. And then, I got very interested in platforms. They just struck me as a robust business model, and you saw them a lot in the consumer space. So, it was interesting to see where they could or couldn't emerge in the industrial space. So, look at that.
I ended up also working at KPMG in the Innovation Group for several years, and then I joined McFadden more recently because it just fits; they specialize in marketplaces as more of a boutique. But they have deep domain expertise in this topic, so I learned a lot from the technology folks about how you do implementations and how you connect the software packages like Merkle.
Which is a big provider of software in this space to large marketplaces, such as Magento. How do you integrate Merkle with commerce tools and things of that nature? Anyway, I appreciate that, but I'm through and through a strategy person, so I excel more on the strategy side.
03:54
This is great, and, just so that our audience understands, because the word 'strategy' is used in a lot of different ways, right? Like, my definition is that strategy is where you ethically find hidden growth opportunities, right? But when you say, 'What does your role entail?'
04:13
Sure, so companies often, well, I guess to step back, just like in the cloud, you know, there are a lot of cloud providers. So, it's a big expense and a big adjustment for a company to go to the cloud. And so there are companies out there that do the business and tech assessment to match the business goals with the technology objectives. And so we do the same for marketplaces.
To help the company that's trying to launch, or thinking about launching, a marketplace, understanding their business objectives and then translating that into technology recommendations is key. Now, this can happen with a company that's just looking to build one marketplace. What becomes interesting is when you work with very large companies, like Fortune 500 companies, and they have multiple marketplace opportunities. And so, I've come to call that 'marketplace grand strategy'.
So, thinking about it from both their multiple business units, how these would integrate, how you put together a coherent technology strategy that aligns with those business opportunities, not just in one country or region, but potentially globally. And so, I've been working with several very large companies on their marketplace brand strategies.
05:28
This is great, and we're gonna ask you a question about what's top of mind for you. But last week, somebody just asked me this question and said, Hey, you know what, I'll go buy something from a marketplace, but I'm still expecting it to be implemented. Who's gonna implement that for me?
And I didn't, it didn't click until that person said that because when most of us think about marketplaces, we think of things like iTunes App Store or HubSpot App Store; we just click and play, right? But if you want to buy an enterprise-grade app from a marketplace and push it into an enterprise company, there is the last-mile delivery of...
This thing, right? And so, that was a very interesting, question, and I'd love to dive deeper into that, or maybe we can start there, or maybe you can give us a little bit of a primer on what the state of marketplaces is where you are at? So, whichever you want to go to?
06:26
Well, what's super cool is how diverse they are. So there's this little platform out of San Francisco called Curated. And what they do is not only sell products like skis and climbing gear, but they will also hook you up with a coach. Some of these endeavors, hobbies, or pursuits are complicated, and the equipment to do that thing is actually...
Pretty expensive and it's a big investment. And so, they've layered in this coaching opportunity in addition. So, they match you with a coach who has expertise in that area and they help you walk through, 'Hey, if you're gonna be a biker and you want a high-end bike, you know, here are your options and, hey, what are you doing?'
So that's one kind of really interesting one. There are platforms for dog walking; there's a platform called Rover, and it matches people who have dogs with people who walk dogs. Yeah, so that's another example of a platform, but we're also seeing them in the industry. So, there are platforms in the medical space that specialize in medicine. some platforms match nurses to hospitals.
So this, we've, we've evolved over the last 10, the last decade or so, into what you might call a platform economy. It touches many, many aspects of our lives, from social media to how we buy things online to how businesses buy things online. So it's a huge space and truly.
Billions of dollars are now being transacted through.
08:15
Platforms? Yeah, I would; I was just going to make a call and comment on, like, if you have a pet dog, Rover is a very cool name for a pet dog. That's what my first pet dog was named. He was a mix of a German Shepherd and a Rottweiler, and this dog was amazingly strong and buff.
We call it Rover, and it was so cool. And then, when this company Rover came up, I was like, 'That's how I found it, because I was looking for Rover, and then the name came up. I guess before Kelly asks a question - because Kelly's gonna ask a very intelligent question - I'm gonna ask a not-so-intelligent question, right?
08:52
Asher wants to talk more about dogs. Well, it is,
08:54
Its rover is like a dog,
08:57
And chocolate.
08:58
It's Friday, but how did we get to a place where buying B2B software or B2B applications from a marketplace became a thing? Like, do you have any? Well, you...
09:17
The early marketplaces like eBay and Amazon built their technology, but so many businesses wanted them and it's not their core expertise. Why build this complex software if you're just gonna use it for your application? and so there's a group of companies out there now that specializes in providing marketplace software. And so it's complicated; it's different from e-commerce. So, e-commerce is one company selling their products and services and, you know, putting up a web page, and that has become increasingly commoditized with companies like Wix, right? You can build web websites with pretty code, you know, no code much.
09:57
Simpler from a technical perspective than a marketplace that requires third parties to supply goods or services, so,
10:06
But the really big ones--so, for example, Macy's--you, I don't know if you saw, but Macy's has moved to a marketplace model. So, when they have stood up an e-commerce capability, where they bring on other brands that they sell through their marketplace, and they have about 200 now and they're aiming to grow to 6,000. So...
Complex software is needed because they have to manage the catalogs of multiple brands and they need to do the checkout, fraud detection, etc. There is a ton of stuff that happens behind the scenes to make these marketplaces work efficiently and effectively.
10:51
I will circle back to the other question about, what Asher had originally asked around this idea of when you sell to businesses, right? When you're no longer selling consumer products and you have these more complex, now it could be something more industrial or it could be, I think Asher was referring to, like, enterprise products and you need services.
What we see in B2B SaaS is usually there are two marketplaces, right? There's a services marketplace and an app marketplace. But I think this might tie into what you're saying about having a grand strategy across your company.
Because from the business purchase viewpoint, right, you're gonna [want] what Asher was saying is ideal. I wanna buy this, complicated [thing] - like I wanna buy Netsuite, but I want someone who can implement this for me and my organization [to] handle all the integrations. It would be ideal not to have to go to one marketplace and then go to another marketplace and, and vet that out separately, but...
But, market-wide, we do see that more [people are] curious [about] what your thoughts are on what the best strategy is for those situations, and also what you're seeing in the market. Are you seeing more companies unify those two things together when they're selling to other businesses?
12:03
Well, it depends on what they're selling, right? But what we are seeing is that the experience is built up, and so you're now able to do much more complex transactions through marketplaces. In the past, you know, in the early days, it was a fixed good with a fixed price, and you put it on the website, and the buyer and the seller understood what it was, and you, the platform, provided the infrastructure to make that transaction happen.
But for more complex things, like where you need long-term negotiations, or prices aren't really clear and you need the two parties to get together and perhaps put together proposals, or they don't know what the expertise is in advance, and so they need to build a team, there are platforms now that provide search capacity or specialty marketing capabilities.
So, they'll match a company that wants to run a marketing campaign with their sort of assembled, aggregated group of boutique companies or individual freelancers that provide those marketing capabilities, and when you're dealing with a big company that wants to run a campaign like, say, Pepsi, you know, they're running a $200,000 to $1.2 million, or maybe even a $3 million campaign. Just one freelancer isn't gonna cut it, right?
You need to assemble a whole team, and so the marketplaces are getting more sophisticated now so that they can handle those more complex transactions, and that's happening. and so what that's enabling is firms now can lean into the platform economy to get more and more of the services that they need; some of them may be the size.
Software and services, but in many cases, it requires a combination of technical expertise and some kind of goods like logistics services or software. And, you know, in the past, you would have a big integrated consulting firm; I mean, that's what Accenture does, but pieces of what Accenture does can now be found through marketplaces.
14:14
And does it push folks, companies like Accenture, to then package their offerings? So, the Accenture model for a long time has been: let's do an assessment, let's do capabilities, let's do a risk matrix, let's do this value thing. There are, like, seven different things that have to happen before I get a SOW.
And then it's like seven years long, you know, and it's like a multiple, and that's like, right? And so does it?
14:41
Market all these.
14:42
Companies to transfer the four things you need? And, they're?
14:51
All clear,
14:53
You can pick whom you want to work on those projects, and here's what those people's certifications look like; you just buy the whole.
15:00
Things that may take, you know, 18 months and sometimes 3 to 4 years for a full-blown implementation and things of that nature are harder to put on a transaction platform. But we're seeing tremendous growth of platforms that can do, as I said, more complex transactions. So, we're seeing a boom in this space and it's cutting across multiple sectors; it's in steel, it's in chemicals, it's in...
I don't know...you know, complex backend apparel, you know, the supply chains and things of that nature. So, anyway, it's a big, complicated space that a lot of people don't see. But that's how we can get goods and services more efficiently delivered, right?
15:50
Right, so Peter, like, so what happens now when it's these large companies who all were depending on, like, seven different types of assessments, and then they would give you an SOW that would, like, stretch like seven years long, right? And so now I, like, and also one big part of those SOWs was companies that wanted to see who was working on their projects.
And they would require to show who led the project, who is working on the technical side, who is working on the business side, and their credentials; like all these shows are very detailed, right? So, what happened in this market world?
16:26
Well, you know, there are areas where marketplaces still have a hard time, and I would put that in that category; when things get complicated and you need these highly detailed, negotiated contracts, then the value proposition of putting it on a marketplace sort of dissipates, right? So, to be realistic, you're not going to see a marketplace in every single facet of business life, right? But they are very powerful and they're automation machines; they allow you to automate things that otherwise would have been done manually.
you know, the industrial space has been slower to adopt marketplace models, but the software is getting better, and, the advantages of channeling your relationships through marketplaces are pretty strong. And so, we're seeing more and more movement in that area.
17:28
Okay, and so I guess let's talk a little bit about just the components of a modern marketplace, right? Because, like, we've gone through all this stuff, right? And I hear terms like private offers and like private offers, like, what are the components of a modern marketplace? Right? Just so that our audience can understand, because these questions in our marketplaces keep coming up. it's gonna be good to just get an idea of what the components of a modern marketplace are.
17:55
Well, you know, fundamentally, what do they do? They connect people who want to buy things with people who want to sell things, but you can also add other features. So, one way to think about it is a shallow marketplace versus a deep marketplace. So, a shallow marketplace would just focus on getting the transactions done, right? And so they optimize that. However,
we (or our companies) have found that they can make more money and attract more users, which creates more value, which attracts more users, right? So, you get those network effects going if you add more services to them. So, the big platforms like Amazon and Alibaba have added advertising to their platform, right? YouTube as well, right? It's not just uploading your stuff. They've added this whole layer of advertising to the platform, and that's attractive to the producers of the content because that allows them to monetize, and it's also useful for the advertisers because they're looking for eyeballs. And so, we call these multi-sided platforms or marketplaces.
And so, over time, you move from shallow marketplaces to more complex, deeper ones with a whole range of services. For example, when Airbnb first launched, they had a hard time getting people to offer their apartments for lease, due to the risk. So, what Airbnb did was come in with an insurance policy, layering in a set of services. It's really interesting to see the evolution of all of these services now that they have become embedded. As for what Shopify does, it offers merchants these websites; it's more of an e-commerce.
Then a full-fledged marketplace. But the idea is the same: now Shopify is offering a whole series of services. Now, if we go into the AI space, which is interesting, something like Chat GPT is opening up to allow for plugins, right? And so now you've got this whole ecosystem of companies that want to plug in.
to the chat GP T: So, Chat G BT is on the path to becoming a very large company if it keeps its open policy, of allowing third parties to connect into its large language model, right? And there's tremendous potential. I just saw an announcement: the CEO of ED X, which is a big consortium of education, has just announced a chat GP T plug-in.
So, one of the things that's going to happen is that these marketplaces that already exist are going to want to supercharge their marketplaces, right? With AI. And so, you hear a lot of concern about, you know, the effects of AI, but I tell you they're doubling down and figuring out clever ways to use this technology because it enhances their services, it automates things, and it reduces staff.
Right? You can cut out people who are writing content for the website and explaining products and get chatbots to do that. So powerful content generation engines are now going to be added to these marketplaces.
21:16
Do you see that in the near horizon, being added as a way to surface in large marketplaces, the ideal fit for the buyer, right? Like one of the challenges with marketplaces, as a buyer, is finding the right goods and services that you're looking for, and that's a perennial challenge. Once you get any decent-sized marketplace, do you see that being layered in as a tool that can make better recommendations?
Yeah, and more personalized and customized, right? Because a lot of marketplaces you go to, it may look the same to everyone. but layer that in, and you can have...yes.
21:56
There are 22 components to that. One is supercharging your discovery engines, and those discovery engines have become very powerful. They are now not just visual or text, but they can be voice-activated. So, we're going to see continued innovation and deployments of new features and capabilities around search engines. The other trend is towards more curated marketplaces, where...
The marketplace itself, I mean, that's part of its function: to ensure that the best brands, the best quality, or whatever other characteristics and features they're providing. and that's their duty; they hire staff that is specialized in that, and that's what their tasks are, so that the buyer or user of the platform gets, a lot of that filtering done for them, right? So, we're seeing these specialty marketplaces emerge.
Even in apparel, right? There are a number of them, like FarFetch and things that they've championed; they're not just a bazaar of anybody who wants to sell anything. They're much more of a curated experience, and they create communities associated with them. So, when I talked about shallow versus deep, a whole other dimension of creating a deeper marketplace is to cultivate a community. So...
Companies like Thread Up or PoshMark, are moving into this circular economy world, but they're also doing it by building community and making it feel good to be a part of that marketplace, right? It's not just about doing commercial transactions; it's about your lifestyle, the people you want to hang out with, and the values that you want to be a part of and learn about.
23:51
That is very poorly done and in the B2B context.
23:56
Well, B2B is different, right? B2B is all about expertise, right? And making sure that you're helping a buyer find what they need. And so there, it's about authority, expertise, and things of that nature, whereas on the consumer side, its lifestyle, its sentiment, its values, you know, it's slightly different. And so that has interesting implications for influencers. So if you're a customer-facing marketplace, you know, more and more spending is going into things like TikTok because they have such an influence on buyers and can drive sales, right?
And, you know, doing fun, quirky things and things of that nature, work in that space. Whereas, if you're 3M or, you know, a BB or some of these other big, you know, you wanna do, and so what they do is they sponsor training programs. Some of them even certify in career development to help the users of their products get better at using them. And so, there's a whole education component. So, again, when I talked about shallow versus deep, one way to create a deep platform is to build out a training and certification component that brings people into your network. Or, a cool thing that I learned about recently is that a big oil company wanted to get their product out into the market in Indonesia.
And so, they created a loyalty program. If you bought a regular amount of lubricants from that particular company, you would earn points that would build up to buying a motorbike. So, you can imagine that is a really big incentive for somebody who is a mechanic, working on cars and scooters, to be able to win a scooter of their own - is a big deal. So, a deeper marketplace is where you start to embed a lot of interesting loyalty programs as well.
26:10
Great, and let's dive a little bit more into the fun, quirky things; you know, the side of this thing because that's kind of the world we live in. And sometimes I feel like these things can be distracting to people from actually getting their jobs done, right? So, where is the state of B2B from your perspective?
26:36
Well, if you want fun, quirky things, then we need to delve into Web 3 and NFTs, and where that's going, and metaverse stuff; and they are all platforms. So, an interesting case is State Farm, right? State Farm has, for years, done deals with Live Nation. They sponsor concert events. Why do they do that? Because they want the next generation of buyers. Right? And so, what are young kids? Their first purchase of insurance is typically car insurance.
So, the insurance companies want to be present at events where young people are now. What's interesting is, State Farm has just done a deal with iHeart Music or Media and Roblox. Oh, interesting. For a meal.
27:29
Roblox is getting them even younger. Yeah.
27:35
They're like, You started walking and you can hold the controller; you need insurance for your thumb. OK.
27:41
It's just...you know...it's just.
27:43
Being there, right?
27:45
And getting your name out and name recognition, and, so there is a site, Nike has one as well; it's called Nike Land in Roblox. So, here's a company using a platform to kind of get exposure to the next generation of consumers. So, we see this a lot, and then the question is, how do you use NTFS and things to create loyalty and stickiness? So, VW, which has 12 brands including Porsche,
has been doing a lot of things in the metaverse and with NTFS to engage a new group of consumers. Again, these are all transacted on platforms, and it's interesting to watch and see how different brands are experimenting with this. They haven't figured it all out yet, but it's a thing and it's a way to engage. TikTok has exploded in popularity, and more and more companies are finding they have to allocate ad spend to influencers and presence on social media sites if they're looking to get in front of the next generation of buyers.
29:05
Yeah, talking to a celebrity about just the marketplace and the community and maybe on the B2B side, right? Because in the B2B world, the explosion of communities is, I mean, we all saw like many, I mean, I think, I think there's like 100,000 communities, buy now or something like that, right?
29:23
But on B2B or B2C?
29:26
On the B2B and B2B
29:27
There are communities like Partnership Leaders, Astro Runs Partnership Leaders, or Communities for Partnerships. But then you have the Pavilion, which is for Marketing and Sales Executives.
29:40
The product which was acquired, but yeah, there's a bunch of... and there were more of the nature that you're saying, right? They're aimed at professional success, so they have a very strong education component, but also a networking component, right? Like networking.
29:55
The biggest professional network out there is LinkedIn, right? LinkedIn now has 750 million professionals in the world on that platform, and you're seeing it build out deeper offerings to quote-unquote creators; they have creator tools. Now, what are those? you know, if you are eligible now, you can broadcast on LinkedIn and have your show. So, the platform is kind of...
Figure out, like, how they create value and deeper connectivity, and new ways for people to promote. I mean, that's one of the reasons why you join a platform: their exposure or to learn. LinkedIn has added a whole learning component. And what you find is, when people are in between jobs, they're very hungry to learn. So they're capturing those people at the right time when they're looking to upskill or they have extra time in between jobs. And so LinkedIn provides all sorts of courses: there's professional development, and then you get into the whole education area.
you know, finishing your undergraduate or graduate program isn't the end of learning. Learning continues throughout your life. So, you know, I think B2B companies have recognized that. Training, then, becomes the question: do you try to monetize that, or do you just offer it as a premium product to train?
Act and build loyalty and community, right? For a particular group. So, the platforms allow you to do that at fairly low transaction costs, right? In a way, previously, you'd have to have classrooms, and you'd have to bring people to a particular venue. Very, very expensive now, with streaming and, you know, getting, being able to do Zoom and all this stuff, has lowered the cost of being able to provide that. But, you know, the quality ranges dramatically from terrible to really, really good. and platforms like MasterClass have done incredibly well. MasterClass is a billion-dollar enterprise now.
32:05
Yeah, and I'll just add, I know because our audience is a lot of B2B folks, right? And the word 'community' comes up over and over again. And, at least in my opinion, you can't 'action' a community; a community is there to provide a sense of belonging, right? But what happens inside the community is you have connections and...
And then, that connection leads to some sort of destination, which could be personal or professional success. They provide resources to get you there. So, that's kind of one of the very...
32:38
Exactly, and, you know, there are companies now that build software just for communities like Mighty, right? And so that is a thing unto itself. I'm involved in a community that was set up in Europe. Europe has lagged, actually, in platform formation; it's lagged behind the US and China. And so there's a community called the Network, and they bring together platform professionals, people who are trying to understand how platforms operate, learn best practices, and things of that nature. And I believe that they use Mighty as their community.
33:16
Or yeah, there's a mighty circle common room; like there's, there's tons of space, there's tons of tech that are coming in. In my personal opinion, if the AI movement wasn't so strong, I think the community movement would be powerful right now because that's where...
33:32
But you need community, and there will be a community centered around a blend; you know, and that's what we're doing. We're moving into this blended world of digital and physical. you know, a lot of the community is to keep people together so that, until their next physical event, right? Yeah.
33:56
Yeah, because, like, what happens is, there have been communities forever, right? Like, for the last 50 years, because, like, so you go to an event, then there's like this break, then there's another event, then there's this break and then there's another event. The event could be virtual, it could suck, or it could be really good. Like, there's all these things, right? But if there isn't an event, then there is the continuity of the connection.
Another event that builds on top of that continuity of connection, right? And so, this thing is what I think the modern, like, community version movement is all about in a way: how do you keep the connections moving towards a destination? Right. And again, the destination could be a personal or professional success.
34:43
Yeah, well, you know, there's a group that focuses specifically on virtual events; it's called the Virtual Event Group (VEG). and it's a great group. and they meet and discuss next-generation technology and, best practices around hosting virtual events. and in fact, I learned about a technology called Twine through participating in that group. And I used it because I co-chair the MIT Platform Strategy Summit. And when we were doing our virtual events, we used LinkedIn to connect people who are part of our event with each other for short, interactive discussions.
And it was fantastic because it was a global event and we had people connecting from India to Africa, from Africa to the US, and all over the world. It would do these short links in it, tapping into, I guess, a LinkedIn API that allowed these connections to happen, and then it would host these short links.
Interactive discussions of 2.5 minutes, or so, and it's amazing how much you can share in 22 minutes, or so.
35:54
Yeah, tell us a little about the Platform Summit because we learned about it from Jeff also. So, I don't know if we've gone into any detail. Is it invite-only? Can everybody get there, and what do you discuss there?
36:09
Yeah, so, it's been happening now for a decade; this will be the 11th year it takes place at the MIT Media Lab, on July 13th this year, and our focus this year is on the future of platforms: where is the platform, where are platforms going? Right? We've seen tremendous growth over the last decade, but we seem to be at an inflection point in many areas, like with social media: are the big players gonna continue to be dominant, or are we gonna see the rise of new platforms emerging in social media? and so that's an interesting question; there's a new rate.
Regulatory pressures and things are coming to bear. So, anyway, we're going to explore this. And then one area that I've gotten super interested in is kind of challenging this idea that platforms are all that disruptive because what they do is just reinforce the linear economy; they do very little to promote reuse and recycling, and that is going to become a bigger issue. So, I started...
To look at the circular platforms, right? And so, that's happening in apparel, it's happening in plastics and other areas. And so, one of the panels we're gonna focus on is circular platforms. What, what, what exists out there and what could potentially be built that would support more sustainable practices for
37:34
The world to find that term? Yeah. What exactly does it mean, what exactly makes something a platform?
37:43
Yeah, so you think about a typical platform you go on there, can you identify the good or service that you want? and then it's delivered and then it's used, and then typically discarded, right? Versus having that good taken back, right? And potentially resold to somebody else or recycled or reused. And so you're seeing some platforms emerge that specialize in secondhand clothing, for example, Poshmark. but you're also seeing it in the B2B space with...
Recycling plastics, and I think we're going to need them with the explosion of electric vehicles. Estimates are that we're going to have millions of batteries, and batteries are very big for vehicles and they use scarce metals like lithium in production. If the cars are discarded, then that lithium is dissipated. There are concerns over the availability, potentially even geopolitical conflict that could arise from competition to acquire this, or it could stall out the transition to a more sustainable future if the prices of lithium go up. So, there's a lot of...
Interest in recycling exists, but there doesn't yet exist a marketplace for recycled lithium batteries.
39:10
Just on the lithium topic, this is one of the reasons why Tesla's board had been putting pressure on Elon to focus on renewable or hard lithium uses because lithium AI owns stock at a company called LTHM (that is a ticker symbol). And I merely bought it just to understand what is happening with lithium mining and stuff. It's very interesting once you dive deeper into how it is mine. Yeah, there's only...
39:39
A few places in the world where you can extract it economically are in the US's deficit of mining or indigenous cap, you know, supply. So, we're gonna be reliant on ports. My perspective is that yes, you could get recycling going. But what if you created a marketplace instead of just having these typical company-to-company transactions? You created a marketplace. It could be a more efficient way to boost recycling.
40:21
And then all this needs shoring up and things like that. I guess we could spend an hour there. and we, we're coming up on, coming up on time. But what we do here is, like on these podcasts, like we, we, this is like the first one of our meetings. So, we would love to have you back on the podcast to dive a little bit more into, like, community marketplace, how these things come together. and, if that's OK with you.
40:47
Yeah, well, we've had a pretty wide-ranging conversation. I'm happy to dig into any one of these areas.
40:53
I hope you enjoyed it, you know because the format is very casual.
40:58
Yeah, no, it's fun, and I appreciate all the different questions. Hopefully, you know, it's a big space, but it is very impactful. And one of the things I've come to recognize is that it's not just the gig workers that can build a career in this space; there's a professional class of what I call 'platform professionals', and it's really interesting.
Jobs. And they're often at the forefront of where the companies are going. They involve strategy, ecosystem development, and management, because, you know, platforms are all about bringing in third parties into their ecosystems. So, you need somebody to manage that. There's a lot of interesting and challenging engineering that goes into this. And then, next week on...
Going to San Francisco to speak at the Marketplace Risk Conference, there's trust and security, which is a topic we haven't talked about yet. But once you have a platform, you want to maintain it and ensure that it is an attack-proof environment so that users have a good experience.
42:00
To prevent fraud and things of that nature, so there's a whole component of that. And then there are the tax issues: when marketplaces first arose, there were no tax rules that applied to them, as one of Amazon's advantages right in the early days. But now, the regulators have caught up, and they're beginning to use platforms as a vehicle to achieve their revenue targets. So, they're formulating tax policy specifically for platforms.
Yeah, so here's one for you, here's one for you. That's interesting. I just learned about it because I'm on a panel with Valero, which is a big tax provider to marketplaces. So they told me that there's concern about decreasing revenue from gasoline because as gasoline sales decline, that's where most of the money is generated to pay for roads.
And a lot of people are not driving as much to the malls and things, right? So, they're not using as much gasoline. So, states and the federal government have gotten concerned about where that revenue is going to come from to pay for it. So, then now they're starting to think about putting an extra sort of tax on last-mile delivery.
43:17
Yep. So, the platforms now...
43:19
We will have to pay for some of that, and that will get embedded in the cost of securing the goods that you buy through e-commerce sites.
43:30
Yeah, just for our listeners, there are three types of taxes: sales tax, use tax, and excise tax. Gasoline taxes are all levied through excise and they're at the point of transaction, not the point of delivery. Just a quick fun fact for you: I was employed number 70 or 80 at a place and I was there for 7.5 years. I saw this whole thing take place.
but I know we're having a fun time. We would love to have you back because there's a big, big burning question about, like, who should the owner of a marketplace be. Because, like, in the B2B world, or even maybe in the B2C world, right? When the board says, 'Hey,' or the executive says, 'Hey, let's go move in this direction,' they need an owner because if there's no owner, this is not getting done well, which I think has also happened in the past.
44:19
Well, some companies have spun off their marketplaces and created what they call a new co, which is a completely new entity or organization. Others have tried to do it by rebranding and creating a separate brand, but still owning and operating it. And others have tried to launch them under their existing brand. So, there's another conversation.
44:46
Yeah, the branding question is really interesting. and the branding you're mentioning for the suppliers and losing the customer relationship, how that impacts your brand as a supplier, is very interesting. So, so for...
44:58
Our [pause], and then the other one is the big manufacturers [pause], you know, they sell through distributors and so they don't have fulfillment capability. So, then the question becomes, how do they address fulfillment if they want to move to a marketplace model?
45:14
Yeah, totally. Totally. So, for our listeners, we're gonna talk a little bit about who's the owner of a marketplace and this, and then maybe take some governance things as well, because this is a very important topic. And then platforms as a whole as a driver of indirect growth, because there is a platform leader, or as I would call him, because like I'm leading the movement on partnership leaders, right? Myself, there's like...
There's, there's we need to push the partnership leaders further so that they can start thinking holistically about indirect growth. And other types of indirect growth are not really in the partnership leaders' purview today. So I, don't. This is all that always happens. I think this is the third time this has happened now where we get into a conversation and we're like, we could have this for hours, right? But Pete, we're gonna bring you back, back, back on. and we'll talk about this, but thank you so much for spending some time with us today.
46:09
Yeah, no, it was fun—a lot of fun—and I appreciate all the questions. It's just a rich and dynamic space, so let's do it again.
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