Weigh in: Auctionwire's most valuable strategic partner is also its source of greatest concern. The company benefits enormously from eBay, but also lives in its shadow. What should it do? Work to make itself invaluable to its dominant partner, or carve out its own independent course. Check out the video and story below and give us your take.
Joshua Gold, 33, Founder and CEO of Auctionwire
Home base: Toronto
Staff: 13 employees
Videos
To eBay or not to eBay, panel discusses Josh's relationship with the corporate giant
Internet Links
Founded in 2003
Auctionwire is a Canadian company that runs on-line auctions around the world to raise money for charities. It works with corporations, foundations, ad agencies and non-profit organizations to create successful on-line auctions that raise money, increase brand awareness and generate positive publicity.
With over 822,000 registered bidders and the potential to tap into eBay's 233 million users, Auctionwire has helped charities and corporations qualify over $62 million in bidding activity and has run some of the largest and most successful auctions on eBay.
But eBay, the hand that feeds them, is also Auctionwire's biggest problem. Gold says it's easy to get lost in something so big. Because of eBay's incredibly fast growth, it no longer meets Auctionwire's customized needs. Also, eBay has changed. At first, there were a lot of buyers. Now there are millions of buyers and sellers so it's hard to differentiate yourself. That's why Auctionwire is launching a new portal, givingroom.com, in the next two weeks. The site will still be auction based and charity focused, but will be a social networking site for individuals to give. Gold says that because of the protective policies of some charities, such as The Canadian Cancer Society, it's often difficult for individuals to support causes and connect with other fundraisers. The new portal is expected to build up charity-driven social networking and drive traffic to the company's auctions. However, he has not yet projected the revenue from this yet.
Gold also has global dreams for Auctionwire. He definitely wants to grow his business with expansion into Europe, Asia and the Middle East as well as the United States. In September, 2007, Auctionwire opened an office in Los Angeles to expand its reach, address the needs of existing global clients, develop relationships with new partners and establish Auctionwire's presence in key markets. Gold says that, so far, the market has been great for him in the U.S. He attributes his success to finding the right person who picked up business immediately.
With a staff of only 13 people, Gold says he's smart in terms of outsourcing and uses a lot of freelancers. When he hires staff, he looks for people with the right combination of passion and responsibility. It doesn't matter to him if they're young or old. He says it's all about the effort.
The Challenges
Breaking away from eBay
Gold says he wants Auctionwire to be Switzerland in the marketplace. He's concerned about repercussions if they break away from eBay, but he's tired of living in their shadow. But how do you make an omelette without breaking eggs? He says the company needs to make investments in connecting up more buyers and sellers.
Choosing new partners
Gold has been approached by six of eBay's competitors about becoming a new partner.
Requested advice from the panel
Gold would like advice from the team on:
How do you break away from the hand that feeds you (eBay) without alienating anyone?
How do you choose new partners?
Ideas on using the new portal, givingroom.com
Expansion outside Canada
The high loonie
Gold wants to expand to more markets outside of Canada but says the company is taking huge hits out there. Their margins have eroded because of the strong Canadian dollar.
Timing
He believes that there are great opportunities but it's a time bomb about who will get be first.
Resources and people
He needs resources and the right team of people — not easy to find on foreign territory. As a Canadian company, Gold has worked with government programs, but finds that they don't want to take risks with financing.
Marketing
Gold recognizes that Europe, Asia and the Middle East as well as the United States are all challenging and difficult markets. Adapting to individual markets is important. Auctionwire's marketing plan in the U.S. is more numbers focused than in Canada. He also finds that people are more open to ideas and that it's easier to get a meeting or to get people to take your calls than in Canada. He criticizes Canadians for not thinking big, for being too pessimistic and for not being loyal.
Requested advice from the panel
Gold would like advice from the team on:
What are the areas of opportunities for expansion?
Where do I find new resources?
What the panel sees as Auctionwire's strengths and weaknesses?
What should Auctionwire focus on in e-commerce and globalization?
Business Overview
Four years ago, Josh Gold identified a need in the marketplace to use the Internet and the online community as a new fundraising tool. He recognized that corporations and individuals loved hooking up with celebrity items or unique celebrity experiences. Also recognizing that there was an opportunity to partner these celebrity experiences with fundraising opportunities, he founded Auctionwire.
With a personal background in social work and an interest in business and entrepreneurship, Gold says it was a natural progression to pair them together.
Mission Statement
"My mission is to run the world's largest online auction business in a socially responsible manner. "Josh Gold
Value Proposition
Auctionwire transforms traditional charity events such as silent auctions, gala dinners and golf tournaments, generally geared towards local attendees, into worldwide events. Through their vast network of media contacts, experience and partnerships, Auctionwire can offer the client the highest level of exposure as opposed to going it alone.
Auctionwire can accommodate all online auction needs, whether the client is interested in organizing an extensive themed auction event or attracting international attention to an existing event. It raises both the value of online auction campaigns and the global status of the organization. It offers thorough, comprehensive and hassle-free service that eliminates all logistical problems surrounding an international auction
Market and Product Description
Clients Auctionwire works with: PR and Advertising Agencies — Creation of high profile branded eBay auctions to accompany an existing campaign, or assisting the client in the development of something new. Top Brand Companies - Running a high profile eBay auction is a great new way to reach a vast 200 million plus receptive audience. Charitable Organizations - Extend awareness of the client's cause or mission to a vast new audience. Raise awareness, Find new donors and drive additional traffic to the client's existing web site. New: For those planning a golf event or a gala - To make a silent auction more profitable or learn how to integrate auctions to make a fundraiser an even bigger success.
Services
Auctionwire provides complete auction management solutions including:
strategy & consulting
a public relations plan that generates interest for auctions and causes, allowing exposure to the media, audiences, viewers and bidders. on-line and event driven auction campaigns
unparalleled customer service
logistics handling and warehousing
payment facilitation and processing
bidder qualification and bid authentication
warehousing
on-site management
24/7 auction support
professional copy writing and photography
integrated 'event-to-online' auction service
Awards
In September, 2007, Auctionwire was awarded the prestigious title of Profit Magazine's Top 50 Corporations, ranking as the 7th fastest growing company in Canada. The company also recently won the Dell Entrepreneur of the Year Award.
Advice from CEO Michael Dell to Josh Gold
Make your mistakes now when you're a small company. It's okay because there's more leeway — it's not a turning point. Once you're a large company, mistakes cost big buck and upset millions of people. Also, know your business and who your customers are.
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