Let's say you have a great idea for how a company can vastly improve its services or product. What do you do with it? File it away in your "ideas box" or approach the people involved and offer to help out of the kindness of your heart? The most proactive course of action would be the latter, with the understanding you'll be able to reap rewards later, be they karmic or financial.
Chicago-based startup Etsy On Sale is an example of what can happen if you opt for the latter. To be fair, it isn't like they cold called Etsy -- the e-commerce site that lets folks sell their homemade crafts to anyone interested -- and said, "Hey, we know how to improve your selling tolls." The trio behind the company entered a contest Etsy was having in 2010 and won with their tool, the sales event manager. I gave Co-Founders Cameron Henneke, Mitsu Beck and Jason Beck a call to talk about how others can follow in the path they've forged.
How can entrepreneurs expand on existing brands?
Jason Beck: That's exactly how we started. Etsy had an API and they did an API overhaul in the fall of 2010, and along with that they did a contest. They asked users what they would want out of third party apps, and then they let developers create apps using the new version of the API. One of the things that was consistently mentioned among the users in their forum was for a need to put your items on sale temporarily. We created our first tool, which was the Etsy On Sale sales event manager to fulfill that need. We happened to win that contest, which we were very excited about. There was a need there, and we got a lot of users right away. Slowly, we decided that we couldn't sustain that as a hobby, so we created the business to be able to cover our resources.
We found out early on that we needed to have really good communication and a really good relationship with the engineers at Etsy who run the API. Cameron has sustained a very good relationship with the engineers at Etsy. The great thing about it was that Etsy had a built in market for us. They have something like 500,000 shop owners. It's a niche market but it's a big one. Being able to build on the success of Etsy was definitely key for us.
Not only is it a niche market, but it's a contained one. You know exactly who you're going after and have an audience instantly.
Jason Beck: Exactly. And an audience that we knew really well because Mitsu has been on Etsy for a couple years already.
What were you selling?
Mitsu Beck: I make handmade, knitted scarves and hats and different accessories like that.
Cameron Henneke: That was a real key for us, Mitsu's experience already with Etsy. We were already familiar with their brand, their community, and their types of users that they had. She was actually the one who came up with the idea, because running sales events in Etsy was a feature they didn't have. She knew already there was a need for this. So, we were fairly confident when we started developing the service that we would be fulfilling a need and would have a market right away.
Do you think entrepreneurs need to wait for a contest like this to leverage improving upon an existing brand? It could potentially be awkward to cold call someone and be like, "Hey, I made your product better. You're welcome."
Jason Beck: [Laughs.] Our advice would be to look for a need that needs to be filled. Etsy certainly was aware that they weren't themselves providing all the usability that their users wanted. I think that's why they were expanding upon their API. For us it was to look at -- what is a need that needs to be filled, but also what's something that we can sustain? What's something that's not just a need for the next couple of months, but something that Etsy isn't going to build out on their own. That's how we've also expanded our tools. The next thing we offered, which is pretty Etsy-specific, but a tool for owners to change their shop tags for items. All of these things were things that had to be done manually, and there wasn't a way to do them as a batch or even to add a time limit. The key is to look for things users wanted.
Cameron Henneke: If you're looking at other businesses who have holes to fill -- if they have an API for providing users a way to interact their business, they're already the type of business that's interested in having others participate and work with them. If you have an idea, and a business isn't really interacting with others, that might not be the company or the area you want to go after. But Etsy was open to it.
Mitsu Beck: Just this week Etsy has reiterated that by talking about how they're going to continue this developer relationship and building further on that.
Jason Beck: We're not alone. There are some pretty cool other Etsy apps out there.
That contest was in 2010. What is your relationship with Etsy now and where do you see it going from here?
Cameron Henneke: I maintain a pretty consistent relationship and communication lines with the lead engineer on the API side on their site. We've gone back and forth about some things, like this past Black Friday, it's a huge load for us. There were 280,000 items that were put on sale. We're pounding at the API. The week coming up that, I'm checking in with their API lead to make sure everything's going to be fine on their end and that there wouldn't be any glitches. We've also approached them and have been talking about other ways to have tighter collaborations beyond what they just offer with the public API.
Jason Beck: Communication is key because the last thing we don't want to spend a lot of time developing an app that they're just about to release.
Cameron Henneke: If you try to do things sneakily there could potentially be problems down the road and you could get a cease and desist letters and all those sorts of things. We didn't want to run into any of all that, so we worked with them from the beginning.
David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.