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Interview with Caroline Drucker

Interview with Caroline Drucker

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Abschlussberichte > Abschlussbericht 6. Initiative > Interview with Caroline Drucker
Caroline Drucker ist Country Manager für Etsy in Deutschland. Zuvor war sie Partner Marketing Manager bei SoundCloud, das kürzlich vom World Economic Forum zum Technology Pioneer 2013 gekürt wurde. Sie war außerdem maßgeblich beteiligt an der Markteinführung des Magazins VICE in Deutschland, arbeitete für das Literaturmagazin DUMMY und begleitete die digitale Strategie beim Neustart der Wochenzeitung Der Freitag. Caroline Drucker ist Kanadierin und lebt seit 10 Jahren in Berlin.

Das Interview mit Caroline Drucker führte Jiannis Koudounas.

Innovation im digitalen Ökosystem
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How do you define "innovation"?

Innovation is about finding new solutions to problems. That said, „new“ might mean realizing that we knew how to solve a particular problem in 1540, but we have forgotten it in the meanwhile. Innovation means finding a way to solve a problem that is not currently, generally used.

Is innovation good per se?

I think innovation is great. If we look at the world right now - environmental disasters, globalization (and I think we are just starting to realize what globalization really means), the economic crisis, the massive demographic shifts that we face in the West - we have a lot of problems to solve. There are not necessarily more problems or less problems than in the past, but the scale and the magnitude of the world in which we live in has grown at such an exponential rate that the urgency to solve those problems is dramatically increasing.

What is the role of technology in this context and what problems does it help to solve?

I had this big turning point for me about one and a half year ago, when I had to speak at Campus Party in Mexico. I was filling in for someone else very last minute and had no idea what it was except that it is a big tech conference. They said to me „You are giving the main talk and there is going to be 7.000 people“ - but people often say „there is going to be 7.000 people at the conference“ and you are still just speaking to 300 guys in terrible suits in a small room... So I show up and there is literally 7.000 people in one room hacking together. It was an unforgettable experience! The energy and the feeling of excitement about what technology can bring were unbelievable. I spoke with young developers from Mexico. They were telling heartbreaking stories about how their local communities are ravished by drug trade and cartels and how normal it is there that people are getting murdered every day. For these young developers technology isn‘t about being the next Steve Jobs. It‘s about creating their own future, it‘s about making sure they have enough money so that their siblings can still go to school. It‘s that simple. For them, technology is a way to make both their own and their communities‘ lives better. And technology is also about finding a new way to express themselves. That‘s the thing: innovation doesn‘t just have to be about solving complex or actual logistical problems, it can also be about self-fulfillment and having more control about who you are. That‘s when I realized that here we often think about technology as a way to become rich, but not as how it can help people in very very small ways. This can be a program to help senior citizens stay in the community once they retire, or it can be about finding a way for children to get to school safely. Innovation can be anything - and technology is what is going to help us get there.

Tell us a little about Etsy and the web-based peer-to-peer economy...

Tim O‘Reilly often speaks about how businesses should create more value than they capture. At Etsy, that‘s exactly what our founder did. He found a way for people to make money out of things that they made, in a much more efficient way than beforehand. It is a decentralized, bottom-up regulated efficiency. Etsy is a network platform for handmade goods, vintage items and supplies. Right now we have over 800.000 sellers (micro-producers) in 150 countries. Over 75% of them are women, many are running home-based businesses. We don‘t set the prices, we don‘t decide what is going to get sold online - it‘s completely decided by every single person who is selling something on our website. Τhis year Etsy has had over $ 500.000.000 in sales. We only take a 3,5% cut of that, so this means that $ 482.500.000 went directly back to all those small entrepreneurs. I say here „entrepreneurs“, because the people who are selling things on Etsy are entrepreneurs. Entrepreneurship means also people taking control of their own destiny and deciding „this is what success is to me, this is how much money I want to make, this is how I want to make it and this is how I want to be fulfilled doing my job“. What Etsy essentially has done is to create new livelihoods and give people the flexibility to define how they want to live.

In his keynote on sharing economies Tim O‘Reilly also uses a quote form Nick Hanauer and Eric Liu’s book The Gardens of Democracy: „We all do better, when we all do better“...

Something we also do on Etsy are ‘Teams’. We are working hard to support a cooperative notion of business. Small businesses are more powerful and successful when they work together. ‘Teams’ are groups of sellers who sell a similar product or are in a similar area. As a group, for instance, they can buy products at wholesale prices, they can go to marketplaces and share the expenses for a stall or they can help each other translating items. Importantly, they are teaching each other how to be better business people.

Etsy lowers the barrier to market entry for its sellers...

Yes. Whatever you are trying to sell - whether this is a product or skills - you must be able to offer that to the people who you think want to buy it. Traditionally, getting access to your market was very hard. In the peer-to-peer economy, companies like Etsy, Airbnb or Taskrabbit have lowered the barrier to entry. You have so many opportunities nowadays! The danger is making sure that everyone has the tools to enter that market. Because if you are not as web savvy, you won‘t find it as easy to enter it.

So, do the sellers on Etsy have to be „web savvy“?

We have some people who rely on others to help them get into the marketplace. A great use case here is a mother-and-daughter team in the North of Turkey: the mother makes these very elaborate, quite expensive necklaces. She doesn‘t use the web, but her daughter runs the shop and helps her make it.

Digital innovation and entrepreneurship require a specific mindset. They do not only open new opportunities, they are also associated with risks.

Starting a business is really scary, especially when your whole life there have been systems that do everything. Tech startups are great at solving problems, because they follow the ,agile approach‘. ,Agile‘ is saying „We have this really big problem, we are going to break it into its smallest components and we are going to try to solve it in chunks“. On the other side there is the ,waterfall approach‘, which is saying „ok, we have this particular problem, we are going to solve it, it will take us a year to do, we are going to lay out the plan and then everything is going to follow that plan“. ,Agile‘ is always reprioritizing, always changing the basic truths upon which you make judgements. That means you need to be flexible, you have to be ok with the fact that the ground that you are standing on is constantly changing. This is terrifying. Germany is a somewhat rational country. It‘s not a culture that is necessarily comfortable with rapidly changing situations - which is funny, because at the same time Germany has been able to deal with massive changes in the past, such as the Wirtschaftswunder in the 1960s or the reunification. But all of those had a massive infrastructure behind them. If you want to set up your own company, however, you don‘t have that infrastructure.

...And you can fail. It seems that in the U.S. there is a different notion of failure. Failure is not a stigma for tech entrepreneurs there...

And it is very much here in Germany. I am excited that in November I will be speaking at FailCon in Berlin - it‘s all about embracing failure! I will be talking about „No Blame Post Mortems“ and also a lot about what I learned from being at SoundCloud. SoundCloud has been founded by two Swedes and is a company that nurtures a very collaborative environment. Failure is a very scary thing. In contrast to here, in North America the term ,serial entrepreneur‘ is almost the badge of honor. The fear of failure is a huge block. The problem is that it‘s not only an emotional thing. The problem is the larger infrastructure around it. And it is also a regulatory issue: if you have had a company that has gone bankrupt, here it‘s very hard for you to get capital again and start a new company. The German legal system doesn‘t make it easy for people to become serial entrepreneurs or to bounce back after a monetary failure.

How has German politics embraced the opportunities of the Internet economy so far? How have they dealt with the challenges of web technology and entrepreneurship?

I think every German party right now is trying to pander to the taxing, because it is a great PR story. I am not convinced though that the people in government currently understand the challenges facing technology. We see a lot of regulations which, at their heart, come from a very good place and are extremely well intentioned. It‘s good that there are people thinking about these issues. However, the way in which they are then written into law demonstrates a complete ignorance of the way E-commerce and entrepreneurship works. It also indicates a stubbornness to understand the diversity of solutions. I see this as a serious problem. One of the regulatory problems are tax issues around equity. It is very hard for entrepreneurs in Germany to give equity to their early employees. Another one may sound silly, but it is also a basic issue: it is hard for German companies to offer their employees perks, because they have to tax them on it. This makes competition with companies from other countries difficult, for instance when you want to hire the best engineers from Silicon Valley.

Linda Walter
Gordon Süß
Sebastian Haselbeck
Linda Walter
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