Month: July 2020

Walmart’s recent partnership with Shopify to expand its online marketplace appears to already be paying off. The retailer in June announced it was opening its marketplace to Shopify’s small business sellers with the goal of onboarding 1,200 new sellers by the end of 2020. Following the Shopify announcement, the marketplace added 3,000 more sellers in June and is expected to exceed 3,600 in July, according to a new report from research firm Marketplace Pulse. That’s triple how many sellers it was adding at the beginning of 2020, the firm’s numbers indicate.

The e-commerce intelligence firm, which works directly with retailers and marketplaces and produces industry analysis, looked into Walmart Marketplace’s accelerated growth following the Shopify deal. It found that within the first six weeks after the June 15th partnership announcement, Walmart’s Marketplace added more than 5,000 new sellers.

In comparison, Walmart’s Marketplace added only 1,296 new sellers in January 2020. That figure grew to 2,290 in April, then 3,296 by June. With July’s estimates included, the marketplace will have topped 15,000 new sellers in 2020 by this month’s end. To date, the marketplace has surpassed 50,000 sellers — which is double in size from June 2019.

Walmart’s marketplace growth is much slower than Amazon’s, the firm notes. But this is, in part, due to its process around adding sellers. Its marketplace requires sellers go through an approval process, which is something it does in an attempt to avoid counterfeiters and other issues. Amazon, meanwhile, adds thousands of sellers daily.

Of course, not all this recent growth can be attributable to Shopify. The pandemic has sent a surge of customers to shop online and sellers are arriving to meet that demand. But Marketplace Pulse believes Walmart has already surpassed its goal of 1,200 new Shopify sellers by year-end.

These newly added Shopify stores aren’t distinguished from other sellers on the website, so there’s not an automated way to count their numbers. But the firm says it manually checked dozens of new additions to confirm their Shopify affiliation and believes the accelerated marketplace growth is closely tied to the new e-commerce deal.

Of course, seller growth is not the only metric used to judge a marketplace’s success. Walmart’s catalog size has actually decreased despite all the new additions, the report noted. Since the start of 2020, the total number of products has shrunk by nearly 15 million, from around 50 million down to 36 million, the firm said. This was related to a few large sellers delisting their catalogs of mostly products in the Home and Books categories, though. Walmart disputes this figure, saying it still has 75 million, not ~35 million, which is stable year-over-year.

The report also added that what matters most is not the size or the number of sellers, but rather the sellers’ performance. On that front, the firm recently found that Walmart’s marketplace, though smaller, was outperforming both Amazon and eBay, driven by the significant increase in Walmart.com shoppers during the pandemic. That increased traffic was also aided by Walmart’s merging of its Grocery app into its main app, a transition that is still underway. Around a month after the merge began, the Walmart app on May 13th became the No. 1 shopping app on iPhone.

When we talk about patents, we’re usually talking about “utility” patents. Utility patents protect inventions that claim to have some practical application or use. (A lot of them still claim things that are actually useless, but they’re supposed to be potentially useful.)

“Design” patents, by contrast, protect only the ornamental or decorative aspects of a design. They don’t protect any kind of functionality. If there’s a functional work to protect, only a utility patent will do.

Because design patents can only protect non-functional works, they’re kind of like copyrights for visual works. And the bar for creativity and originality in a patented design is low—so low that even a standard-issue graphical user interface can get patent protection, as our latest Stupid Patent of the Month shows.

Shown below is a patented design owned by Siemens Healthcare GmbH, a company that’s part of Siemens, the most prolific patent-filer in Europe:

This patent, U.S. Patent No. D872,112, is a relatively standard GUI, with rows of circular icons displayed beneath a header bar. But the patent doesn’t protect everything in that picture—importantly, the portions circled by broken lines are not part of the patented design. The design also includes features that are not in the picture—namely, the colors used in the display. To understand what’s actually been patented here, a member of the public must do more: they can request and pay for a hard copy of the patent from the U.S. Patent Office or navigate through the PTO’s (extremely clunky) PAIR database in the hopes of finding a downloadable version of the originally-filed image.

Between the image’s poor quality and the broken lines denoting unprotected features, it’s practically to impossible to identify what the patented design even is. Is it the specific arrangement of circular icons in the three rows? If so, then why are certain circular icons excluded? Is it the icons that a Siemens designer created to represent things like “users” and “receivers?” If it’s this hard to say what the patented design actually is, it will be even harder to determine whether other designs are infringing. Infringement turns on the comparison between the patented design, the accused design, and the prior art. But that analysis can’t even happen until it is clear exactly what a design patent protects.

The low examination standards, lack of clarity, and resulting low quality of design patents already pose a big problem. But it could be about to get worse. Pro-patent lobbyists are pushing to give design patent owners more power over tech developers and users. They’ve introduced a bill that gives Customs and Border Protection the power to seize products at the border just by sizing them up and comparing them to design patents, whose owners are demanding this new type of special treatment.

Giving CBP so much power will pose a real danger to ordinary technology users. Imagine CBP trying to determine infringement for a patented design like the one above, which is a GUI for medical software. To assess infringement, CBP officers could examine a device, including software applications, to see if they match patented designs in the registry. When those applications pertain to health services, the medical privacy of users may be at risk.

Design patents owners don’t need more power than they have today. Instead, we should be asking whether design patents should exist at all. We already have copyright. It’s not clear that granting extra patent rights to works with no practical application provides any benefit to the public at all.

How does crowdfunding work?

Crowdfunding sites offer you a place to host your campaign, usually in exchange for a percentage of the money raised. Backers are given various “rewards” based on the level of funding they provide. These rewards can include an exclusive promotional item, advance access to the product being supported, or some form of public recognition—the more funding offered, the better the reward. (Some campaigns offer equity in place of rewards, but in this guide, we’ll focus on the latter model.)

Most crowdfunding websites require you to set a financial goal for your campaign, as well as a timeframe in which to reach that goal, usually between 30 and 90 days. Some platforms let you keep all of the money raised during a campaign, whether you meet your goal or not. Others, like Kickstarter, use an all-or-nothing model that returns funds to backers if your campaign falls short.

If your campaign is successful, you’ll be in an excellent position to transition into a sustainable business by leveraging the audience built through your efforts crowdfunding.

Other types of crowdfunding

Projects that rely on crowdfunding or online fundraising generally fall into one of three main buckets:

• Equity: Equity crowdfunding gives contributors partial ownership of a business in exchange for the capital they provide.
• Donation: Donation-based crowdfunding provides no financial rewards or incentives for backers, so it’s most often used for charitable purposes.
• Rewards: As covered above, any type of crowdfunding campaign that incentivizes contributors with rewards (but not a stake in the resulting business) upon completion can be considered rewards-based. We’ll mostly focus on this approach throughout the rest of our guide.

The benefits of crowdfunding

Crowdfunding offers several valuable perks on top of being a great way to raise startup capital.

Validating your ideas

The more you know about the target market for the product or business you plan to launch, the more you’ll reduce your financial risk, and crowdfunding can be an excellent tool for conducting market research.

Pre-selling your product via a crowdfunding campaign helps validate your creative projects by giving you a solid answer to the question, “Will anyone buy this?” Manufacturing your product without any indication of how it will sell could cost you a significant amount of time and money if it turns out the demand for your idea isn’t strong.

Knowing people want what you’re selling allows you to plan and scale your business with confidence.

Building a following

Having a solid following before you ship your first product is a rare and significant advantage. When done properly, crowdfunding, especially when combined with social media and press coverage, can help you build a dedicated audience that will ideally stay with you as your business grows.

Creating an accessible source of funding

Securing financing can be both time-consuming and difficult for many new business owners. Untested ideas or new business models may not appeal to conservative lenders, like banks, and while finding private investors to help raise funds is an option, you’ll usually need to give up a portion of ownership in exchange.

Running a successful crowdfunding campaign can be a big undertaking, but for many founders, it also can be easier and more rewarding than traditional methods.

What can I crowdfund?

There aren’t many restrictions on what types of products or businesses can be crowdfunded, but the most successful projects tend to have a few key things in common:

• A specific product. If you look at the biggest crowdfunding success stories, you’ll find most of them focused on funding individual products, not stores. There’s a reason for that: backers tend to want to support tangible items, not broad ideas. For the best chance of success, seek backing for your best product. You can build a store later, after your initial idea has taken off.
• A targeted, niche audience. Create a product that fills a need or a gap, then find the market that craves it. Often, founders create products that solve a problem that exists in their own lives, like MindJournal did when they couldn’t find a journaling tool designed for what they needed. Develop a prototype that taps into those needs.
• Strong differentiation. To generate buzz and attract backers, your product has to be something that can’t be found elsewhere. Do your research to ensure your product is one of a kind.