Simon joined Greylock in 2011 as an executive-in-residence and was promoted to partner in 2013. His area of focus includes network effect businesses and transaction-based startups with a specialty around marketplaces. He has served as an advisor to many marketplaces and networks including Lyft, Tango, Taskrabbit, Poshmark, and others. Simon also leads Greylock’s $100 million commitment to marketplace investments.
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The 1099/W-2 framework is broken. It existed in a world that had monolithic, centralized corporations, not in a world that had distributed companies. So there needs to be a third class of worker, and we need to decouple the benefits and things that used to be attached to corporations and make them independent so people have flexibility. I call them the un-collared workers….We need a third class of workers. I think that’s inevitable.
Marketplaces leverage the power of people; that is the fundamental source of power for all marketplaces. They aggregate large groups of people who are buyers, as well as large groups of people who sell products or offer a service. The reason this system is disruptive is because most businesses, most industries and most supply chains have a lot of things between people who buy and people who originally create products or provide the service. The disruption occurs by putting the power in people’s hands to provide the products and services directly. Technology platforms enable this process, but, ultimately, marketplaces are people-powered, and that is what is so beautiful about them and what makes them powerful and disruptive.
Almost every industry is susceptible to the power of people and the ripping out of physical infrastructure. Assets and brokers; all that stuff in the supply chain that we used to look at one or two generations ago as driving efficiency, that was to drive physical efficiency, to move goods around the world; warehousing and the many steps in that whole chain—that was a world where physical efficiency was defined by physical assets: lots of people, lots of money, lots of infrastructure. The world today is very different. As a matter of fact, those things that were viewed as assets and strengths are now viewed as liabilities. In this new world, all the major industries that have all this built-up infrastructure are susceptible to being disrupted by people.
As you decentralize the workforce, you empower the workforce. Workers no longer work for an entity that tells them when to work or what to do. They essentially have the ability to provide the product or service on as many platforms as they want, control their schedule and control their lives. An average service worker today has very little control, gets paid very little, and I think you will start seeing marketplaces shift that.
The second thing is that these marketplaces decentralize the asset. When you look at companies like Uber, Lyft or Airbnb, the assets are not centralized by the business. The companies themselves don’t own the assets, which means they can process more transactions and share those economies with customers through lower prices, with workers through higher wages and with shareholders. It unlocks efficiency and a lot of economics that can be shared.
The third thing that is unique about the structure of marketplaces is transparency, which leads to something much closer to meritocracy. Customers will rate and evaluate the quality of the service or products they consume, and the platforms themselves are very good at objectively measuring every aspect of a transaction. By collecting subjective feedback from customers and objective feedback from the technology, companies achieve information transparency, which means the best workers will be in the highest demand and will make the most money. The entire system is set up for quality and efficiency.
The last thing that is unique about marketplaces is that they are platforms, not employers. Providing services in a marketplace is not a job in any traditional sense. This means the entrepreneurial spirit will thrive in those settings. People will build companies on top of those platforms.
Simon Rothman is an early pioneer of online marketplaces and network effect businesses. He joined eBay when it was a small, U.S. collectibles auction business, and helped scale the company to nearly 200 million users generating over $40 billion in merchandise sales. While at eBay, Simon was founder and global vice president of eBay Motors, a division that nationalized the used car market. Within six-and-a-half years Simon built eBay Motors into a $14 billion-a-year global business, becoming the number one automotive marketplace in the world and a top 10 e-commerce property. In addition to founding and running eBay Motors, Simon was responsible for eBay’s U.S. operations. The $10 billion business unit covered the P&Ls for all US categories except media.
Before founding eBay Motors, Simon worked for several years as a strategy consultant at McKinsey & Company. He has also founded a marketplace, been issued four United States patents, and served as an early Tesla Motors board member.
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