Interview with John Jacobs, ArtFire President and Founder

We are grateful to John A.Jacobs, MBA - President and Founder of ArtFire, for sharing with us the history of the business, and how we as artisans can benefit from joining ArtFire.

What is ArtFire?

ArtFire is a Handmade marketplace and interactive on-line community where artisans can sell their wares with no listing fees, and no final value fees.  

ArtFire prides itself on a position of service and focus on time saving, user friendly tools to help expand each members online and social footprint.  Members of ArtFire are allowed to link out to their other social sites like Facebook, Twitter, and Flickr, as well as Etsy, personal offsite blogs, and even member's own websites, and this can be done from every listing on the site. 

ArtFire also offers innovative features to support  their members like Shop Windows and their brand new Rapid Cart which allows buyers to securely purchase from ArtFire Artists from any blog, or social site on the web without ever leaving the page of the blog or social site.

How did ArtFire get started?

I grew up in a poor, crafty and creative family.  My mother was always improvising or making something unique to fill a need, or to fix or make something work.  It was a challenge keeping the four kids in my family busy with some type of music or craft, but she did it well.  My mother and father have been in business for themselves for many years.  All of their businesses were craft or handmade jewelry related and forged with my mother's creativity.  I accompanied my parents for many years on the road, traveling across the United States selling at craft and gem shows, and learned firsthand what struggling to sell handmade items was all about.  My parents never got rich on the road, in fact for most of their years on the road, they showed a loss or barely broke even.

In 1999, my parents heard about eBay and started selling their handmade jewelry and supplies there.  In fact after about a year, my father stopped doing road shows all together and devoted his full attention to building their business on eBay and the internet.  Over the years however the venue changed, the artist were forced to lower their prices to gain exposure, and the fees, well, they just kept going up, while the service disappeared almost entirely. 

ArtFire was built to support artists and in response to the challenges that artisans faced on the internet and with other online venues.   We set out to build a community that could better support the needs of handmade artisans, respond to specific challenges in a more tailored fashion, and offer a community built around support for one another.  We don't believe in huge returns for venture capitalists or in taxing the creativity of artist.  Our goal is to support your business and your brand with features and functionality that save time like automatic submissions of every item listed on ArtFire to Google Shopping (Google Base), statistics, and simple one page listings. 

How did you become President of ArtFire?

I believe that if you don't like the ladder that you are climbing, you should build your own ladder.  I went to night school while I was in the military and graduated with a Bachelor's degree while on active duty.  This was one of the toughest accomplishments of my life as my mission, and duty to the Air Force always came first.  We worked 6 days on and one day off, 12 hours each day, and to make my classes meant that I had to volunteer for extra duty.  In my family this type of workload was normal, and I excelled very easily in the military, earning early promotion and an offer to stay in as a commissioned officer.  The problem was, no matter how hard you try, you could only get so far, so fast in the military.  So I opted to build my own ladder, went into business for myself and never stopped working.

I have built brick and mortar, and online companies, have succeeded and failed in business, and learned all that I could along the way.  In March of 2008 I noticed that the customers of our craft supply company were having a tough time selling their items.  I talked with hundreds of our customer and listened to their frustrations.  I decided that we could wait around no longer for large auction or craft venues to listen to our needs as sellers, and so ArtFire was born.  I assembled the best team I could find, to include a friend that I respected greatly from my MBA program, Tony Ford, and our Lead Developer Kyle Melik, and we released ArtFire in open Beta October of 2008.

I understand that ArtFire doesn't charge any listing fees or end value fees like most other handmade art/craft sale sites.
How does ArtFire make money?

ArtFire offers two membership levels, a basic a Verified account.  There is never a listing or final value fee for either account, however verified accounts are charged a monthly subscription fee.  Basic accounts can list up to 10 items at a time and Verified accounts have full access to all site features and can list unlimited items on the site. 

ArtFire has very low overhead, we work hard and smart with our resources to keep our costs under control.  Our servers are optimized to handle load very well, and we employ both our own server farm and a CDN to manage site growth.  When analyzing internal bandwidth, server, and system loads, we have concluded that to service a single listing on ArtFire for 90 days cost us less than 2/10ths of a cent.  There of course are other associated cost, however to charge .15 - 55 cents per listing plus a final value fee for each listing, is in our opinion a lack of optimization of systems, resources, and personnel.

ArtFire has taken no Angel or Venture Capital and has no loans to service.  We are fiscally fit and reinvest every dime collected into infrastructure, marketing, and service to the community.  We run extensive viral and creative internet advertising campaigns, and work within the crafting community to promote our members.  Many of the promotional methods we use are evolving or require considerable human investment, so our teams work quickly and tirelessly to maximize our time.

Will ArtFire eventually charge fees when it's out of the Beta phase?

ArtFire will never charge a membership or subscription fee for Basic accounts.  In fact we believe that sites like eBay will soon be lowering their prices to come back in line with sites like CraigsList and eCrater.  Bandwidth, processing, and storage space has become increasingly less expensive.  Our site utilizes some of the newest technology available, and optimization remains our focus moving forward.  We look at our "costs" at the penny level, and we adapt our systems and our code at a moment's notice to take advantage of changing market conditions, and demand.  This level of agility and frugality is necessary as internet and e-commerce life cycles evolve, and allows us to employ a system we call CDD. 

Community Directed Development (CDD) puts our members in control of the development of functions and features of the site, and puts senior managers and developers on the front line of service.  CDD is a system that ArtFire designed in an effort to best serve the individual and collective needs of the ArtFire community.  Implementation of this revolutionary development style, in which members direct resources and social architecture, require that the sites stays in what traditionally would be considered "Beta" for a longer period of time.  Our site will shortly change from the traditionally recognized "Beta" designation to a "CDD" designation, which will not have any impact to users or fees structures. 

What items are selling the best on ArtFire currently?

We offer categories for almost every genre of handmade art from handmade soap, and Handmade accessories, to candles and handmade clothes.  Our largest category is handmade jewelry, in which we consistently rank number one for organic search results on Google.  We also have categories for Design/Media and Supplies/Vintage.  These additional categories allow us to aggregate a more diverse community and increase our ability to reach more buyers.  Currently soap, patterns, jewelry, and out of the ordinary items are selling well on ArtFire.

Have you seen any interesting trends in what's been selling over the past year?

We have noticed a general trend towards handmade and indie centric business in recent years.  We think that many more people are beginning to see the value in non-mass produced products and perhaps reassessing value structures, and we think this is great!

What makes ArtFire different from other handmade art sites?

As the internet becomes increasingly more competitive, businesses that want to be successful will need to diversify and increase their online footprint.  We for example have seen many of our suppliers become our competitors over the last several years, as barriers to selling on the internet have come down.  We encourage every artist and small business to think of the threats that venues pose to your business.  If you say the wrong thing in a forum or to Admin, or unintentionally violate the 700 page TOS, is your company expelled or booted?  This is a very real threat to online business and makes a very strong argument for diversification. 

We don't believe that any artisan or seller should ever put all their eggs in one basket.  We in fact have learned this very lesson the hard way and bring a unique perspective of fairness with us to ArtFire.  This being said, ArtFire can be part of a diversification strategy in addition to Etsy and personal websites.  In fact with ArtFire members can link out to their Etsy shops and personal web stores from every listing using our Market Hub feature.  The main difference between ArtFire and Etsy is our mission; both sites allow you to sell handmade item, but ArtFire does not care where you sell these items.  We want artists to succeed in all venues, not just ours. 

How many people does ArtFire employ?

There are about 15 of us all together, some of our team works off site and several subcontractors assist with varies projects as well.  It's funny, I built companies in the past with 85+ employees that ran far less efficiently and can honestly tell you that the ArtFire team is simply amazing.  These guys/gals never stop caring, they never stop innovating, and they are always pushing to make us better!

What does the "Verified" emblem in an ArFire seller's profile mean? How are sellers verified and is there buyer and seller feedback?

Verified is our premium member designation, and tells buyers that these members are a bit more involved in the ArtFire community.  Verified members can participate in our Artifacts program, and use all features and functions on the site.  There are no long term commitments and members can upgrade to Verified status at any time or move to a basic account whenever necessary.

Can you walk us through what an average day is like for you?

My alarm is set for 5:00 am, I am in the office before 6:00 am 6 days a week.  I catch up on emails & Twitter, and prepare for daily meetings which typically start by 7:00 am around here.  We begin every day with a quick recap of what each department is working on and share challenges that might be relevant.  I review daily reports, metric, and accounts with admin staff, and begin the first shift.

I almost always skip breakfast and do lunch in the office, which Danielle, my wife brings in (she works in our offices).  I frequently manage by roaming and interface with our teams on IM, via email, and face to face.  I have a baseball on my desk that I bounce as I pace and brainstorm and a large dry erase board that in my office which usually contains about 100 projects or ideas.  I make a list each day of items that must be finished before I leave, and usually make it about half way through the list by 8-9 pm

Our offices are much quieter after about 5:00 pm at which time I pick up speed and usually get closer to finishing daily tasks.  We affectionately refer to 5:00 pm as second shift, and it lasts until we run out of coffee.  Our developers and senior staff work from home when they/we are not in the office and most of our staff work six days a week in support of ArtFire. 

I have a two year old son and three year little girl, that stop by the office each day before they go to school.  Balance is very important in my life and we work hard to find as many moments each day as possible to stop and focus on family.  We put aside Sundays for the kids, and always plan a new activity or trip for them.  Of course the BlackBerry is always on and our staff is on standby 24 hours a day in support of ArtFire.

If you suddenly had magical ability and you were able to snap your fingers and have one thing change instantly about ArtFire, what would it be?

If I tell you out loud, will it still come true?  ::  Traffic, traffic, traffic.  ArtFire has been in open Beta for a little over four months now and  is doubling in traffic each month.  February 2009 unique visitors should exceed 400,000 which is up from 192,000 in January and 74,000 in December of 2008.  We have invested substantial resources into promotion of the community, but there is still no substitute for time in market.  Our members are amazing and have really rallied behind the site.  We can spend all the money in the world but without the support of the community we will go nowhere.  So many times we have seen great sites, or good businesses forget that service to customers is key to growth and sustainability, and we recognize that traffic will come as long as we continue to put members first.