May
07
2020
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VC’s largest funds make big bets on vertical B2B marketplaces

During the waning days of the first dot-com boom, some of the biggest names in venture capital invested in marketplaces and directories whose sole function was to consolidate information and foster transparency in industries that had remained opaque for decades.

The thesis was that thousands of small businesses were making specialized products consumed by larger businesses in huge industries, but the reach of smaller players was limited by their dependence on a sales structure built on conferences and personal interactions.

Companies making pharmaceuticals, chemicals, construction materials and medical supplies represented trillions in sales, but those huge aggregate numbers hide how fragmented these supply chains are — and how difficult it is for buyers to see the breadth of sellers available.

Now, similar to the way business models popularized by Kozmo.com and Webvan in decades past have since been reincarnated as Postmates and DoorDash, the B2B directory and marketplace rises from the investment graveyard.

The first sign of life for the directory model came with the success of GoodRX back in 2011. The company proved that when information about pricing in a previously opaque industry becomes available, it can unleash a torrent of new demand.

Mar
05
2020
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Etsy’s 2-year migration to the cloud brought flexibility to the online marketplace

Founded in 2005, Etsy was born before cloud infrastructure was even a thing.

As the company expanded, it managed all of its operations in the same way startups did in those days — using private data centers. But a couple of years ago, the online marketplace for crafts and vintage items decided to modernize and began its journey to the cloud.

That decision coincided with the arrival of CTO Mike Fisher in July 2017. He was originally brought in as a consultant to look at the impact of running data centers on Etsy’s ability to innovate. As you might expect, he concluded that it was having an adverse impact and began a process that would lead to him being hired to lead a long-term migration to the cloud.

That process concluded last month. This is the story of how a company born in data centers made the switch to the cloud, and the lessons it offers.

Stuck in a hardware refresh loop

When Fisher walked through the door, Etsy operated out of private data centers. It was not even taking advantage of a virtualization layer to maximize the capacity of each machine. The approach meant IT spent an inordinate amount of time on resource planning.

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