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The StubHub Scam

A fascinating article in the NYT times today on second-hand event-ticket brokerage StubHub (more) - now owned by eBay. StubHub provides a convenient venue for people to sell tickets that they don’t want or can’t use for whatever reason - for example, a season ticket-holder who can’t make a game can put those tickets up on StubHub and make some money.

Unfortunately, as the NYT times describes, StubHub also provides a convenient venue for nefarious “ticket harvesters.” A ticket harvester is one who uses an automated too to break a ticket-sellers per-person limitations: for example, TicketMaster limits customers to 4 tickets per person, but a harvester with an automated tool can “game” the ticketmaster site into selling them hundreds or thousands of seats, which the harvester can then turn around and re-sell at great profit on StubHub. The NYT cites Ticketmaster’s four worst harvesters, who between them had bought and re-sold 115,000 tickets. The times also found that 40% of the best floor sections of a recent show had been harvested. That’s unreal.

One funny fact that came out in the NYT’s article was the techniques used by harvesting software vendors - hiring groups in India to enter thousands of captcha’s in real-time, for instance.

The upshot of the harvesting industry is that shows sell out instantly, and just as quickly, big blocks of tickets are available for purchase on StubHub at multiples of their original prices - the NYT’s example is “Hannah Montana” (whoever that is), who’s $21-66 tickets resell on StubHub for an average of $258 (see for yourself).

Lack of availability and soaring prices are a growing sources of frustration for would-be concert goers, and StubHub is setting itself up to be public enemy number one, with what the times found to be a “no questions asked” policy:

I wondered whether StubHub noticed when its sellers posted an abundance of tickets for an event shortly after tickets had gone on sale. Sean Pate, a spokesman for StubHub, said it did not ask its sellers about how they got their tickets. “It’s not our business to play judge and jury and ask, ‘Have you been fair?,’ ” he said. “All we care about is that the seller delivers the ticket.” [from the NYT]

So - StubHub doesn’t want to know how you got those 1,500 Hannah Montana tickets your selling, because harvested ticket sales are a huge source of revenue for them. As the times notes, “…isn’t StubHub offering a solution to a problem that its own suppliers help to create?”

The long and short of it is, yes. StubHub and eBay are profiting hugely on what can best be described as gray area behaviour, and in many jurisdictions, what would be outright illegal. The people that bear the brunt of those cost are the fans - the individuals and families who have to spend ridiculous amounts of money to go see a show, while fraudulent harvesters, StubHub, and eBay line their pockets and talk themselves into believing that it’s “whatever the market is willing to bear.”

Given the concentration of harvesters (i.e.: a small number of harvesters are responsible for the majority of sales), it seems like a there’s a simple solution that StubHub could implement: cap monthly transaction volumes for sellers. Run the numbers - the pro harvesters will stand out in relation to the season ticket holders; find the median per-user transaction volume, and throw down a cap. If a user wants to exceed the cap, provide an application process to allow for it that would weed out fraud.

Of course, eBay is looking for bright lights in its acquisitions after the Skype disaster, so anything that eats into StubHub’s bottom line is unlikely. Its a sad situation, however, and expect that StubHub/eBay are doing long-term damage to their business by not pro-actively addressing it. Industries should know by now that self-regulation is in their best interests.

ebay stubhub

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Gumiyo & Edgeio: Is there a market for mobile classifieds?

Gumiyo lets you post classifieds from your mobile/cell. Edgeio - Michael Arrington’s hyped “edge aggregating” classifieds site started as a blog-listing aggregator, but now appears to be an awkward mix everything-aggregator in the style of Oodle and traditional classified site in the style of Craiglist.

Anyway, a recent press release announced that these two companies are going to be working together. It doesn’t really say how, other than to suggest that Edgeio listings will be browseable on cellphones, and that browsers will be able to contact sellers with text messages or “web-activated telephony” - which I assume is a fancy way of saying “clicking a link to dial a call.”

The question I’d like to ask is: how many people want to search classifieds from their cell phone? What use case does this support? I suppose I could go to a car dealership, find a car that I like, and comparison shop vs. classified listings… that scenario seems to be a reach though. Gumiyo’s tagline is the vague-to-the-point-of-meaningless “connecting buyers and sellers” - the question is, what’s the marginal benefit to connecting them in realtime? eBay and Craigslist have done a good business connecting them asynchronously because that supports observed behaviour - i.e.: people generally like to shop & research from home where all of their resources are at their fingertips, and then go and transact. I don’t imagine Gumiyo/Edgeio’s mobile browsing will enjoy the same level of success.

Gumiyo’s cellular posting, however, is a different story. Posting stuff on ebay or wherever is a PITA - out comes the digicam, take some pictures, dump them to my PC, crop and resize, upload to whatever classifieds site I’m using, etc. Gumiyo - see below - makes this a one step, all mobile process that looks to save a tonne of work (for posting simple items, anyway).

IMHO, Gumiyo would be doing the world a favour if they built hooks into eBay to allow Gumiyo posting to an auction - fast, streamlined, and easy.

classifieds, craigslist, ebay, edgeio, gumiyo sales

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THE CRAIGSLIST REPORT: April, 2007 - Massive Growth

Craigslist is a juggernaut. I used to doubt its power, but that is no longer the case. For the last month, I’ve been been tracking listing volumes on Craigslist, city by city, so see if activity is growing, and to what degree - I can tell you now, its growing, and massively. Here’s the main Craigslist Tracker Index Page that gives you access to all of the charts and data.

Top 10 Urban Centers by Growth in Listing Volume:

1. blacksburg (Virginia: charts data) 64.37
2. boulder (Colorado: charts data) 57.01
3. elmira-corning (New York: charts data) 46.25
4. bologna (Italy: charts data) 40
5. iowa city (Iowa: charts data) 39.79
6. sheffield (United Kingdom: charts data) 38.2
7. tippecanoe (Indiana: charts data) 37.87
8. st cloud (Minnesota: charts data) 36.66
9. wenatchee (Washington: charts data) 36.25
10. fargo / moorhead (Minnesota: charts data) 36.1

Top 10 Losers in terms of Decline in Listing Volume

1. hong kong (China: charts data) -5.43
2. kolkata (calcutta) (India: charts data) -7.94
3. birmingham (United Kingdom: charts data) -8
4. christchurch (New Zealand: charts data) -8.04
5. mumbai (India: charts data) -8.85
6. glasgow (United Kingdom: charts data) -9.25
7. durban (South Africa: charts data) -11.02
8. bristol (United Kingdom: charts data) -15.06
9. cardiff / wales (United Kingdom: charts data) -16.12
10. guangzhou (China: charts data) -16.67

I’m tight on time today (this week), so I’m not doing an exhaustive analysis. I will draw a few high level conclusions though: growth seems to be concentrated in the US, in non-core markets: i.e.: CL is expanding in the US outside of its traditional holdouts (Bay Area, NYC, etc.). International growth is a little choppier. Note that the 10 Losers are all international. This pattern is consistent - international growth is slower.

Why might this be the case? I’d hazard a guess that localized, homegrown solutions dominate in places like China or India, while Craigslist utilizaion in these areas would be dominated by expats. That’s a very quick conjecture.

General implications: CL has most of the US locked down. Newspapers should continue to fear it. Classifieds startups should look hard at their prospects and sources of differentiation. Craigslist has only MySpace and Facebook classifieds to fear; As MySpace and Facebook ready to move into CL’s territory, I wonder if CL will add a social networking component to move into theirs?

Notes on Data and Analysis Methodology:

1. Percentage growth rates are not weighted by listing volume. So, going from 100 listings to 200 in a small town would be a 100% growth rate, even though its small in absolute numbers. So - read the numbers carefully and consider them in context until I have time to do a better analysis.
2. The period of data collection is April 3, 2007, to May 3rd, 2007. Measurement takes place in the wee hours of the AM, by a very respectful automated scraper.
3. The full dataset is available here. I’ll make it downloadable someday when I have time.
4. Some cities are duplicated if they are listed in more than one state. The numbers should match for each instance.
5. All of the charts are created with PHP/SWF Charts - which is awesome. I’m using the free version.
6. If you see a chart with “Region A / Region B” - that’s the chart tool’s default state when it encountered an error in data. I need to do some cleanup and these should go away.
7. The odd city dropped off: Denver, for instance, I only have a week or two of data for. I haven’t had a chance to see what’s happened.
8. The growth rates are a lousy metric: its the listing count on April 3rd, divided into the listing count on May 2nd. That gives you a monthly growth rate, with n=1 (i.e.: april) for each city). It doesn’t do any smoothing or anything within the month’s data, so the numbers are pretty grain-of-salt and intended to give a rough impression of what’s going on in each city, supported by the applicable chart.
9. This analysis in no way takes into account listing quality - only volume. All of the gains could be spam for all I know.

That’s it for the moment - enjoy. Comments on analysis, methodology, etc. are welcome.

classifieds, craigslist, craigslistreport, ebay, growth web

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eBay launches embeddable listing widgets

Good grief - eBay is actually doing something useful. Today, as covered by TechCrunch (I copied their widget, btw), eBay has released embeddable flash widgets. Anyone can widget any auction, and any widget you see can be easily cloned for embedding in your own site (as I did with the one on TC, it was about a 5 second process).

The widgets, are slick, useful, and easy. The are created through togo.ebay.com, and can take a variety of formats (single items, search results, slideshows). The process is very straightforward, with the exception of the fact that you need to manually enter an Item ID.

That Item ID part is the big opportunity that eBay is missing with this: IMHO it would just make sense to embed the creation tool in each listing page so that anyone can promote any listing without the need to copy and paste Item ID’s between eBay sites. A single click, in-listing widget creation tool would get much more utilization. Hopefully this is in the cards.

blogs, ebay, embed, togo widgets

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Bricks and Mortar 2.0: Amazon Fulfillment is a RW Platform and API

Amazon, reports the NYT, is blurring a lot of boundaries. With the “Fulfillment By Amazon” Business Solution, Amazon is creating a real-world platform with a physical set of API’s - taking the strategy of developing, surfacing, sharing, and selling back-end services that has worked so well online, and porting into the physical world. Fulfillment lets any merchant selling anything online anywhere tap Amazon’s warehouse infrastructure for storage, packing, and shipping.

Fulfillment by Amazon (FBA) is a new program that makes delivering your Pro Merchant Program and WebStore orders a snap. You send your new and used products to us, and we’ll store them. As orders are placed, we’ll pick, pack and ship them to your customers from our network of fulfillment centers. [from FBA]

And why not? Amazon recognized long ago that the systems and processes they use to make their online store work could be extended beyond the store via API users to drive business back to Amazon, create brand equity, create a revenue stream, reduce per transaction costs, and make everyone’s lives easier. The offline world is no different - except that the packets are in brown cardboard boxes instead of TCP/IP, and flow through warehouses and post-offices, not routers and gateways.

“We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years,” he said. “We’ve gotten good at it. Why not make money off it another way?” [from NYT]

Amazon Fulfillment works in four steps:

1. Send your inventory to Amazon
2. Amazon warehouses it
3. Amazon fulfills it - finding it, packing it, combining it with other items, and shipping it
4. Amazon manages customer service (returns)

…and that is just spectacular. Its like the equivalent of Ning for bricks and mortar commerce. It makes it easy for merchants, creates a new monetization stream for Amazon, keeps Amazon’s resource utilization and per transaction costs down, and largely is built on sunk investment. Of course, fulfillment is not new to Amazon, as they’ve done it for Target, Borders, Toys R Us, and others. But extending it out to anyone in Web 2.0 style is.

At the end of the day, Amazon is leading the way in what I consider to be “3.0″ processes and technologies - things that consolidate the physical and online worlds and make moving between the two seamless. There will no doubt be bumps along the road (as the NYT article notes), but ultimately Amazon has seen the future and positioned itself to be the platform on which its built.

amazon, api, ebay fulfillment

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DoMyStuff.com - Outsource Your Day-to-Day Annoyances

Note: I have been unable to register at DoMyStuff. That registration confirmation email is up to 10 hours now - perhaps they aren’t accepting Canadian registrations or some such thing - if that is the case, it would be better to post that fact. As it is, its annoying as DoMyStuff claims to add 600 new users a day. So - bottom line - this review isn’t as in-depth as I’d hoped. EDIT: I’m registered at DoMyStuff and the initial sign up issues have been resolved.

The DoMyStuff.com pitch is an interesting one - post things that you want to get done, and let a community of “assistants” bid on the right to do it [found via Ars]. Competing with Craigslist, local forums, and word of mouth, DoMyStuff is essentially the Amazon Mechanical Turk for the offline world: Need your grass cut, dry cleaning picked up, computer fixed, fence painted, or groceries bought? Post it, and DoMyStuff hopes to find someone to do it for you. Similarly, if you’re looking to fill your free time doing any of the above, you can browse and bid on posts. Ultimately, DoMyStuff is a service marketplace for everyday tasks.

Posting Tasks

Employers (those wanting to get things done), can post in a number of categories and sub-categories (list is high-level category with a sub-category example for each):

1. Automotive > Change Oil
2. Creative > Photograph Event
3. Household > Aquarium Cleaning
4. Miscellaneous > Deliver
5. Personal and Family > Play Tooth Fairy on Phone
6. Planning and Preparation > Plan Bar Mitzvah
7. Purchasing > Concert Tickets
8. Research and Recommend > Cellphone Plans
9. Technical > Computer Repair

There’s a reasonable number of granular sub-categories to choose from, any of which prospective Assistants (those looking to do things) can subscribe to via RSS. The sub-categories cover a wide range - from general labour types of work, to specialized professional applications - such as directing films or composing music. There’s some sweet, funny examples too - like hiring someone to be the Tooth Fairy over the phone.

Bidding on Tasks

Assistants bid on posted tasks, specifying time, cost, and relevant details (hashed out via built-in messaging). Assistants can be chosen on the basis of their bid, their reputation (they are rated after completion of tasks), proximity, or “type” - individual or business. Once terms are finalized, payment is arranged: the agreed-upon funds can go into an escrow account until the work is completed to your satisfaction, or other arrangements can be brokered via the site (50% up front, 50% when finished, etc).

Here’s an example of an actual task that’s being actively bid on (click the screengrab to go there, as long as its active):

DoMyStuff seems to be modeled most closely after eBay - the public back and forth discussion and bid history, for instance. Note - this is a good thing. eBay’s layout is purposeful if not elegant, and DoMyStuff has a solid, similar implementation to enable a similar type of transaction.

Business Model

According to Ars Technica, DoMyStuff makes its cut off of the Assistants, charging a “service fee” for each task undertaken via the site. Whether this is a percentage cut, flat fee, or some type of sliding scale is unknown. This appears to be their only revenue stream, as there is no advertising on the site.

From what I can tell from the outside of the site, DoMyStuff is well-conceived, well laid out and well executed - they seem to have anticipated most of the objections people would have with such a service and provided answers (escrow service, for instance).

Challenges

While DoMyStuff.com seems to have put together a solid website, their ability to meet business model and marketing communications challenges will determine their success:

1. To Much Solution for the Problem: Craigslist enables thousands of similar transactions every day, and more all of the time. What Craigslist lacks in structure, it makes up for in simplicity, and free-ness (for both Employers and Assistants). The structure added by DoMyStuff no doubt makes the process of collecting and evaluating bids more straightforward, but is this a need that the market has actually signalled, or a “build it and see if they come” gambit?
2. Informally, This Need is Already Being Met: Fundamentally, DoMyStuff is not enabling any new transactions. Every day-to-day task that can be arranged through the site is currently being arranged elsewhere already - be it Craigslist, local forums, word of mouth, or neighborhood bulletin boards. DoMyStuff offers selection, availability, and reputation - but its competing against the informal networks that have gotten things done as long as people have existed.
3. Formally, This Need is Already Being Met: Bigger tasks (DoMyStuff seems to have a lot of Design/Creative activity, for instance) are already being brokered elsewhere as well - places like eLance.
4. Critical Mass: as with any service of this nature, DoMyStuff needs to get penetration in markets such that there are enough posters and bidders to make using it worthwhile. Without a viral angle, DoMyStuff will be relying on advertising and word of mouth.

Summary

I do believe that DoMyStuff offers value to both sides of a transaction. I could see using it on a personal basis to get day-to-day things done, but more importantly, I could see it evolving into a “core” service for people and businesses as:

1. A recommendation engine (as ratings are accumulated)
2. A “b2c” (how’s that for a blast from the past) marketplace - I’d love to have multiple yard care companies bidding on my business, and be able to choose on the basis of reputation -that’s a powerful value proposition
3. A prospecting tool - for example, for local yard care companies to drum up more business

DoMyStuff needs to communicate their value proposition. From what I can tell, they are on the right track - they have a clear, explanatory business and domain name, a jargon free process that uses real, easy to understand words (Employer, Assistant, Task) instead of a made-up vocabulary, and a very streamlined site layout (from what I can see on the outside). Translate those points into a media campaign or a viral angle, and I think DoMyStuff could grow.

Suggestion: FreshBooks

Final note: One immediate opportunity that jumped out for me would be to integrate DoMyStuff with online accounting package FreshBooks such that Assistants could manage their businesses finances, taxes, etc. To do so would offer utility to Assistants, but more importantly would position DoMyStuff/FreshBooks as a complete accounting/marketing/transaction service - an end-to-end small business solution package.

craigslist, domystuff, ebay freshbooks

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TechCrunch - eBay to buy StumbleUpon

Techcrunch tells the tale: eBay is snapping up cult-pheno StumbleUpon. Reasons?

I’m thinking eBay will act quickly to deploy stumbleupon technology as an eBay discovery service, providing a means for people to find more auctions that they will want to bid on - a new layer to eBay search. Certainly the eBay API has them primed for integration.

Still - seems like stumbleupon could have been acquired by a group with a more media-centric discovery model - I think that’s just my expectations at work though, as the more I think about it, the more eBay would be a good way to monetize stumble IP.

ebay, stumbleupon, techcrunch techmeme

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