Well done Trade Me, but the threat remains

There’s an interesting article over at eBay strategies, which talks about how eBay lost the market for classifieds and mentions that Amazon is taking out the top end. (If you work at Trade Me then you should have eBay Strategies in your RSS reader)

I’ve mentioned it here before, and it bears repeating: Trade Me is different.

Trade Me has captured the Motors market, is well ahead of the incumbent in Property traffic and just behind the incumbent in Jobs. They are also in flats ( and have been for years) and rental property.

Meanwhile Trade Me’s free listings and simple localization meant that they have always been in the local classifieds game – things like sofas and so forth that require a face to face transaction.

The overall effect was a business that left no space for the well executed Zillion and Finda to get traction.

So well done Trade Me, but the threat will always be there – screw up and someone will take big chunks of the business. This will happen, for example, if Trade Me attempts to increase fees too much or if usability is lost in a host of features. If so then Craigslist, Gumtree or say Zillion will be right there to pick up the volume.

Sadly for the competitive threat Trade Me is still following the path to usability, and while I’d like to see lower fees in tough times they are probably at the right level for now.

It’s the same at the top end for eBay with higher quality product sellers moving across to Amazon.

Indeed while a substantial percentage (say 40%) of Trade Me’s listings are new, there does remain a bit of a gap in the market for direct selling of quality new products. It’s the one Ferrit was so hapless at finding, and I’ve mentioned how you can take advantage before. The gap is pretty tiny, but between New Zealand and Australia (where eBay is also screwing up) there is plenty of scope.

I’m saddened at just how eBay have managed to lose the plot, but respect Trade Me and how they are still showing the way after 10 years.

Posted in auctions, Business, Internet Business, Trade Me | Tagged | 6 Comments

I’ve joined Equip – a Better by Design consultancy

Better By Design is a NZ Government sponsored program that seeks to help high growth companies become design-led – and thus turn into great companies.

The end goal of Better by Design is for New Zealand companies to generate more export sales by selling better-designed products and services.

It all came out of a 2003 paper and kicked off at a 2005 conference, and it’s part of NZTE.

There’s an impressive advisory board, led by Jeremy Moon (Icebreaker) and assisted by Rick Wells (Formway). Those are two great design led companies – and another one is Apple. It’s no coincidence that I’m typing on an Apple computer, sitting on a Formway Life Chair and wearing 3 separate pieces of Icebreaker clothing. These are companies that understand what I need before I need it and make beautiful products that fit those needs – products that are more addictive than caffeine.

Better by Design’s primary vehicle is the Design Integration Program – a six stage process that identifies high growth export led companies that would benefit from the program, audits them to assess their gaps to being design-led, writes a plan and then helps the company get the plan done.

BBD uses three external consultancies to perform the audits and write, with the client company, the plan to become design led. BBD’s own internal consultants, who each boast an impressive private sector CV, identify and bring companies aboard, guide them through the process and then help companies get the plans done.

Oh – and the audit and plan are free to the participating companies.

It is, however, really rather difficult to get into the program.

Well over 100 companies have been or are going through the process, and there have been some notable successes. Check out the case studies for OBO and Bendon, each of whom has transformed their business in recent years. There are other case studies as well.

The primary measure is dollars earned from exports, and I am told that the results are well above expectations.

I recently joined the team at Equip Design, one of the three external firms that companies can choose to perform the Design Audit and Plan (called a Design360). I’m joining Equip founders Ray Labone and Peter Haythornwaite along with Andrew Jones.

Ray has been in this program from the very beginning, and is a (or the) leading branding consultant. He co-founded Designworks and he chaired the Design Taskforce that created the work that ended up as Better By Design.

Peter has a similarly stellar career in the Industrial Design field – running his own design company for many years and, well if you are in the field you know who he is.

Interestingly one of my cousins (Mikkel Johannessen) worked for Ray years ago, and another (Nils Johannessen) for a design company that Peter founded. They both went through what was then the Wellington Polytechnic School of Design, and I remember Nils’ class designed MP3 players – in about 1990.

Andrew is an engineer and has far too much production process consulting experience.

So I’ve joined a very strong team – and I’m there not because I love caressing gorgeous  Apple products, agonizing over website design, or because I derive a perverse pleasure from helping production processes get better. Instead I am there to provide a business perspective to the team, as the audits and plans tend to go to the very core of what a company does and how it does it.

I bring with me a pretty ruthless approach to the process of growing and improving businesses, one that has always stayed clear of chasing government money just because it is there. I believe in the BBD program as the participating companies are very well screened, it’s free, the BBD team and external consultants have great CVs, and the track record is peerless.

I’m really looking forward to this work – it’s only a handful of days a month, but it means I get to see and help some great companies all over New Zealand. The BBD team has not focussed on web-based businesses, and so I will extend my reach and hope to be able to do some cross-pollination between the two worlds.

I will also learn a lot – from Ray, Peter and Andrew and from the companies that I get to see, and get to apply that to other things that I am involved with.

There is a chance that things will change a bit after the forthcoming budget, but I sense a confident mood given the track record of the program.

Hopefully you will read here about the great companies in the program, but only  if all parties (BBD, Equip and hte company itself) are comfortable.

Posted in Business, NZ Business | 2 Comments

Red Bull is a tobacco company

A scary article in the NZHerald on how a Brooke Robertson lost 55 Kg of weight by abandoning foods and solely drinking Red Bull.

“I managed to wean myself off it by being in hospital for that long but I had severe withdrawals – sweating, nausea, shaking. It was an addiction. The doctors stated that.”

We get the occasional odd story here in New Zealand, but I want to concentrate on the quote from a Red Bull spokesperson who

denied the drink was addictive and said there was “scientific evidence that caffeine is not addictive”.

That’s exactly the sort of disingenuous statement that the tobacco companies made for years about nicotine. There may be scientific evidence for one side and the other of an issue, but the overwhelming preponderance of evidence is that caffeine is addictive.

I don’t know whether this was a misguided spokesperson, an external lawyer or whether the Red Bull organization truly believes there is a chance that caffeine is not addictive. The fact is they are selling stuff which contains an addictive ingredient, and they should have acknowledged that, say that they recommend one can a day as part of a balanced diet and move on.

They didn’t – instead they tried to infer imply  that caffeine is not addictive – according to ‘scientists’.

But even without the scientific evidence we all know that Caffeine is addictive – it’s not even a debate in society. The world consumes about 120,000 tonnes each year of caffeine, and it’s consumed in the full knowledge that it is a stimulant and it is addictive. It’s like alcohol and tobacco – a legal way to send a mind altering substance to your brain.

So I’ve purchased my last drink of Red Bull, will not support their crazy sports events (which are brilliant way to do marketing) and will sneer at the Red Bull and Toro Rosso Formula 1 teams.

I also recommend that Red Bull spokespeople read Wikipedia – the Caffeine article is excellent – well written and with plenty of footnotes for those in denial to follow.

Withdrawal symptoms—possibly including headache, irritability, an inability to concentrate, drowsiness, insomnia and pain in the stomach, upper body, and joints[71]—may appear within 12 to 24 hours after discontinuation of caffeine intake, peak at roughly 48 hours, and usually last from one to five days, representing the time required for the number of adenosine receptors in the brain to revert to “normal” levels, uninfluenced by caffeine consumption.

And now I’ll go make myself a coffee. I forgot to this morning and I can sense a headache coming on.

Posted in Business, media, NZ Business | Tagged , , , | 4 Comments

Let’s deliver mail once a week

From this great illustration of the average US Postal Service residential customer’s mailbox we can glean some interesting facts. Amongst them is numerical evidence as to why I don’t check my mail very often.


There are almost 200 billion pieces of mail delivered to the (and Wolfram Alpha couldn’t deal with any of this) 111 million USA households each year. That’s an average of almost 1,800 each, or 5.7 items a day* or 34 a week (with 6 day delivery). I recall it was around 24 in 1999, so times have been strangely kind to the USPS.

Here’s the problem – 5.3 of those 5.7 letters each day are “unwanted”, and the only 0.5 are not. I’m including bills in the unwanted, as nobody really likes getting them. Moreover in the USA in particular, bills are used as just another way to deliver you junk mail.

Meanwhile the average household is getting about 1 personal letter a month, and  1 card or invite a week – though many of those cards will also be junk.

<update – the legend is wrong – red is not wanted etc.>

It’s really hard to define the size of the junk market in the USA, or anywhere, as companies for some reason get really defensive about their mail being classified as ‘junk’ or ‘unsolicited’. Also in the USA the junk mailers get around ‘no junk’ signs by personally addressing much all of their materials – those are the catalogs, direct letters and so forth in the graphic above. Moreover it is often difficult to distinguish junk (‘get a pre-approved credit card’) from bills (‘Here’s your credit card bill – with a pre approved offer!’) – and sometimes that is deliberate, so you will open the junk.

Sadly, no matter what you call it, it is all just so much wasted paper (the occasional beautifully crafted wedding invitation aside.) What is particularly strange are the 15 Billion catalogs sent out each year. That’s a whole lot of paper in the internet age.

We all belong to the internet age – paying bills online (usually automatically), sending and reading thousands of emails, twitters, blog posts and so forth each year and reading our news online. We only use snail mail (the name says it all) when we deliberately want a slower and more classy process, such as for those elegant wedding invites.

I last sent a personal letter when I was in Pakistan. In 1998. Or was it Europe in 1996? Either way – it’s long past the time when the mail was something I cared about.

Yet we still have the Pavlovian instinct, much like when a phone rings, of checking the mail when it arrives. I often do as well, but what could be in my mail box of any importance?

Well – the only things that matter to me at the moment in that box are The Independent and The Economist, which as newspapers have a time element to them. (I should also get the NBR but they make it a bit hard.)

Everything else can wait. I’d prefer to do bills in batches (I usually wait until the 3rd letter then overpay for a few months) as it is more efficient, and junk gets binned. (Powershop wins awards here – no paper is involved in the purchase of electricity)

So why do we as a society insist on a service to deliver our mail every day? Can’t we reduce it to once every 2 or 3 days, or even once a week?

Businesses can perhaps have more frequent deliveries, but they can pay for it, and besides – this will prod them into going fully online.

How about we offer a dual service – one service that will get me The Economist yeserday (e.g. by print on demand and hand delivery) instead of Monday/Tuesday and that will  deliver the Independent to me before I wake up on Thursday and another service that delivers letters once a week?

We can take the savings, and use them to contribute somehow to the roll out and maintenance of decent broadband infrastucture. We could even give the ownership of that broadband infrastructure to the NZ Post, just like it used to be.

Posted in Business, NZ Business, Politics | Tagged ,

It’s a long way down

If you have not already subscribed or started following Boston Globes‘s Big Picture – then go ahead and do so. They are a newspaper that has carved out a photographic niche that reaches worldwide.

Here’s a recent stunner:

Posted in NZ Business | 1 Comment

A friend has chickens


Posted in NZ Business | 1 Comment

Why are Harcourts not yet on Trade Me?

There’s a fun discussion happening over on the Unconditional Blog – which if you have not found it yet is well worth following. I commend Alister Helm for not only his writing, but also for balancing the real estate industry (and their archaic ways) and the dot com approach to things.

However Alistair write a post on Harcourts that was just a wee bit too fluffy for my sensibilities – so I asked the question “.. are these change leaders <Harcourts> even on Trade Me yet?” (I knew that they are not – and they are missing out on 600,000 browsers each month)

If you go to that post now then stop reading – I’ve just copied and pasted. Indeed join the conversation over on Alistairs blog raher than starting s new one here.

To his credit Alistair gave a comprehensive reply, but it does not fly with me.

1. Realestate.co.nz – the most comprehensive single property portal in NZ – 95% of all listings by real estate agents are featured, the site receives 370,000 unique browsers per month with over 120,000 of these from overseas. This single portal provides the most comprehensive source of real estate – test it on Google which is were the majority of real estate searches start – type in “property in …” on Google NZ.

2. Harcourts.co.nz – the number one company website with over 160,000 unique browsers per month, close to double the web traffic of any other company website.

3. Google adwords – the opportunity to promote property online with pinpoint accuracy and cost effective visitor traffic.

Harcourts have never used Trade me property for all of their listings, they are not alone. At this time realestate.co.nz would have over 20,000 more listings than trade me property. As well there are over 200,000 unique browsers a month who go to realestate.co.nz who do not visit trade me property. (these are all Nielsen Stats)

Harcourts judge that their clients properties would not be presented in the best manner on a website that focuses on second hand goods auctions after all do real estate agents in Australia or US use eBay? – certainly not. Harcourts have adopted this strategy and it has not effected their market share – their share is growing.

I would judge that Trade me is not the sole answer to advertising anything in NZ – just look at jobs, Seek is still the number 1 jobs website – some high value items like jobs and houses may not long term fit the image and profile of trade me – cars, beds, shoes, CD’s and mobile phone – certainly core for Trade me.

My reply was as follows:

Realestate.co.nz had 354,357 UB’s in April, of which 145,000 odd also went to Trade Me. Another 621,080 went to Trade Me and not to Realestate.co.nz.

Harcourts.co.nz had 161,891 UB’s in April, of which 83,500 also went to Trade Me. Another 679,945 went to Trade Me and not to Harcourts.

These are total traffic figures- I should have used domestic, but actually from memory the total numbers make realestate.co.nz look better. I would say though that the impact of those overseas browsers is pretty minimal – after all how many houses are sold each month to overseas buyers?

While UB’s are over-counted (e.g. I have multiple browsers and computers so count many times) this is still a pretty compelling market that Harcourts misses out on. There must be more to it.

And there is – Realestate.co.nz is partially owned by Harcourts, and the Harcourts CEO is the chairman of Realestate.co.nz. Isn’t this a more likely reason for them not to list on Trade Me?

Almost every other real estate agency on Realestate.co.nz is on Trade Me. The last hold outs were/are the shareholders in Realestate.co.nz.

I have no problem with Harcourts holding out, but the reasons are clear, and they are not based on statistics but on ownership.

There are 365 Harcourts listings on Trade Me right now – placed, I understand, by individual agents. If I were a Harcourts agent I’d be pretty annoyed that 600,000 Kiwis were not able to view my listings, and I can understand why they would do an end-run behind the corporate policy.

Meanwhile Barfoot’s have over 2000 listings on Trade Me. Do we think that Harcourts are looking at Barfoot’s recent success in Auckland and wondering just how much of that relates to their presence on Trade Me? Remember that Trade Me attracts sellers, not just buyers.

Actually I’d love to see a chart of sales by agency versus number of listings that month on each of the sites. It would make interesting reading for the entire industry. I suspect you’d better be on both main sites to maximise your chances of a sale.

I do believe there is a place for both Trade Me and realestate.co.nz, but if Harcourts are really scathingly positioning Trade Me as a 2nd hand goods market then they show a very poor awareness of what exactly Trade Me is to Kiwis.

eBay is a poor cousin to Trade Me – they never figured out how to do Motors or Property, and certainly not Jobs. In Australia the market for cars is pretty fragmented, but is mainly on independent listing sites. Similarly the market for property is all over the place, without one dominant player (it varies by region and realestate.com.au is pretty good).

Not only are 40% odd of Trade Me’s items on sale new, but Trade Me is the marketplace for cars and bikes (due to poor online competition back in the day), getting close to the same for property (where realestate.co.nz is good competition), and still in progress for Jobs (where Seek was a very strong incumbent).

As an aside (and red herring) – what happens to the other 5% of real estate agent listings that are not on realestate.co.nz? Are they listed anywhere?

Disclosures: none – I have not worked for Trade Me for quite a while, and I know both Alistair from Realestate and Brendon from Trade Me Property, and they are both good guys.

Posted in Business, Internet Business, Trade Me | 5 Comments