VRM: Market Maker

VRM: Five participant groups

Wednesday 5H

Convener: Nitin B.

Notes-taker(s): Lionel W.

Tags for the session - technology discussed/ideas considered:

Discussion notes, key understandings, outstanding questions, observations, and, if appropriate to this discussion: action items, next steps:

VRM Working Session, 9 April 2015

Market Maker

Examples:

¥ ● Etsy

¥ ● eBay

¥ ● Malls

¥ ● Bride Magazine

¥ ● Airbnb

¥ ● LendingTree

¥ ● Priceline

Market Makers need:

¥ ● Ability to scale

¥ ● Authority

¥ ● Trust

¥ ● Enforcement Regime

¥ ● Rules of Engagement

¥ ● Networks

¥ ● Guaranteed Privacy

¥ ● Scale

¥ ● Verified/Visible

¥ ● COI: Community of interest

Market Makers Want:

¥ ● Provide Entry

¥ ●

NB: examples of Market makers: ebay, etsi, even uber is a market maker, they bring efficient connection of buyer and seller. A “mall” is also a market maker

DL: A mall takes a piece and enables the market

NB: A key differentiator, the market maker does not really care what is in the transaction

SB: Mozilla wants to see the web itself as a market. I look to “EDI”. Mr. X wants 100 tons of cement, Cedex has it, they can transact. To get the internet to be a market we have a thousand steps to go.

NB: What would a VRM version of the Westfield Mall look like? Or a VRM-type Etsy?

Enforcement Regime -- picture bankers with the marig call

Rules of Engagement - builds on the terms of service and lawyer contracts being deployed by Customer Commons

Networks

Guaranteed Privacy - the mall doesn’t know what I bought at the store last week, but the mall did make the purchase possible

DL: I bought a pretzel at Andy’s pretzel, the mall benefits, without any awareness of the transaction itself

SB: I am certifying that #CDS54544 is a human. You are taking risk, but I validate that this is a potential customer

NB: For example, on Ebay, I sold an old Mac. 20 seconds before closing someone came in with a $700 bid, but then ebay rejected that bid because it was a bot. Ebay was acting as a market maker there: the rules were broken, the rules were violated, and the bid was removed.

SB: Authority and governance: I am certifying that you are a human being, or that you are a bad actor

DS: Fuzzy concepts. Qualified buyer is not the same as authority.

LW: What are the concrete tools or infrastructure that the market makers provides?

JS: e.g. AirBnB provides payment handling

LW: Branding? How do we define the boundary, when you are in a VRM-protected system and when you are not?

NB: EDI has ability to form a market without physical markers.

Ann: Each item is on a spectrum

LW: Let’s add, recognizable visible signals that you are in the market that the market makers has enabled

DL: users need access, opportunity. At a mall you walk in, you achieve access to the space… Provide access, entry, a portal

JS: aggregation of people who want to participate in VRM. Buyers & Sellers

Ann: Everything comes from the ability to scale

MH: How does this function when everything on line is a winner take all economy? Every market that is made has a dominant player, Pareto’s law on steroids.

NB: That’s a policy maker conversation

MH: If the customer is in the middle, what does the customer want?

JS: A place where they can go, where people are providing what customers want

NB: ebay dominates used sales, amazon dominates new sales.

SB: There will be market makers that dominate. Bring in all the #2’s, 3’s, 4’s, 5’s 6’s, and then they can collaborate

NB: Poshmark, where tweens sell to other tweens

BW: what would real estate look like if the MLS did not exist? The MLS is a flawed market maker. It has the monopoly, but is full of trap doors, conflicts of interest and artificial pricing. What would real estate look like with real VRM?

NB: Its a great place where we need a VRM market. MLS is for the Realty Agencies. It serves me, as a place where I can sell all things that I cannot afford.

BW: It’s not even complete, as private listings are not there. The new ecosystem, growing without MLS, is intent casts and data flows.

DS: Support aggregate and use intent casts in a way that we can see it.

LW: need a visible sign that you are in the market, like a brand, signal, seal or protocol

BP: isn’t that obvious?

LW: It is shocking, how much we have to always state the obvious

SB: There is non-VRM and VRM. Until we get to the point where the web is smart enough where both people can signal that they wish to transact, we need a routing. In ancient times the market was the town square, we both showed up at the fair and said what we needed; if a vendor did not have it he showed up next week with the goods.

NB: This “MM” is confusing, but I think we need it

DS: Is an analyst a market maker?

NB: No, they are influencers, and their role is left off

DL: Inventory, the one who makes stuff. People need the things that are manufactured.

NB: They need suppliers, they need buyers. That constructs the market. Let’s step away from ebay and the mall, over to the farmer’s market. I have seen those markets fall apart, since there were not enough buyers and suppliers. You need a certain critical mass.

MH: 9K people show up at a market here every Sunday. The Hospital tried to start a market 2 days earlier. But they could not get sellers to come. It failed. I personally stopped coming, as there were not enough goods.

LW: Bride magazine, bicycle magazine… Markets are sometimes temporary, or once a year, when they lack the maturity to stay open every day.

LH: Castalls books on networks, all the powers that brought about the markets that today we take for granted… no natural order of being… disentangle tings, be creative.

DS: Google became the Bride’s Magazine for everything.

SB: If VRM enables adding 10% to a major store’s bottom line, even by the major bastards of the economy, they will jump on it. This could be an epic win across the board.

NB: The other market maker sample we had was Priceline; they support a (proprietary) intentcast, you ask for maui in june, they respond with

RS: Let’s enable protocols.

MH: All the market makers took decentralized structures, and made them easier. Etsy was classifieds and Craigs list. They refactored it, and centralized it, and all of these MM’s refactor needs & wants.

DS: Bride magazine, and even Harper’s magazine. These magazines competed for many years. Bride magazine was challenged early on by the Knot. They tried to compete online, but the magazine is still there: somehow, bride sales are better enabled by the print experience. Look at the list of needs: what is VRM selling to them?

NB: We are selling suppliers and buyers. We have the buyer (customer) and the supplier (vendor) who will conform with the TOS (policy maker)

DS: I am rare: a size 14 with one leg shorter than another; the generic ads in bride magazine do not meet my needs…

NB: