Ted Roden, CEO, Fancy Hands, a service-oriented e-commerce play, amplified Caplan's comment, saying, "We can’t succeed by having Amazon fail. We have to do what we do well and that means having a way better product."
The question then turned to the meaning of "innovation" in the space and how to create that distinct identity. Michael Dubin, CEO of the literal-minded Dollar Shave Club, said that he considers content to be a major part of how the company acquires consumers and presents a certain irreverent attitude aimed at the young male demographic it caters to.
"To make it in e-commerce right now, you have to think about the way you’re asking the customer to shop," Dubin said. "For us, the idea of a selling a razor for a dollar a day online was based on the idea that shopping for a razor is an incovenience. It's not fun, you have to ask the guy at the pharmacy to get a key and open up the display. I think that's an idea that can be applied universally when it comes to getting people to shop with you online on a regular basis. You're going to have to make it very easy and even fun. Online retail is going to be more about the how, less about the what -- though you can’t sell crap, of course."
Asked about becoming profitable, large companies, Roden and Dubin both said it's too soon to tell what will happen in terms of being able to build scalable businesses in e-commerce.
Still, Ryan pressed the group, noting that Amazon still has pretty thin margins, and the same is true for the other veteran public e-commerce player, Overstock. "So does e-commerce suck as a business model?"
"I put my fortune into OpenSky, so I don’t think e-commerce sucks," Caplan said. "Amazon could have higher margins, but they put so much back into the business. As you scale, you can get more leverage in dealing with expenses. The other way to drive margin is to have specialty goods, but that has inventory risk. Trying to sell market goods in an Amazon world is difficult, because then you’re just competing on price. You have to find a way to create unique value for a consumer."