#StartupsEverywhere Profile: Christian Braun, CEO, hobbyDB
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
A Online Database Built by Collectors for Collectors
Based in Superior, Colo., hobbyDB is an online collectibles database that aims to catalogue every collectible in existence. Founder and CEO, Christian Braun, spoke to us about the origins behind the company, how platforms like hobbyDB have responded to market facilitator laws, and the barriers imposed by the U.S. immigration system to the entry of new entrepreneurs.
Tell us about your background. What led you to hobbyDB?
When I was six years old, my brother suggested we specialize with him collecting model cars and me getting the toy soldiers. An interest in collecting stayed with me most of my life and I even managed to finance my MBA as a seller of vintage toys. I went on to work throughout various countries such as Poland, Russia, Ukraine, and the United Kingdom. In the UK, I created a business with shops on the high-street that was selling items on eBay and other marketplaces for people that did not have the time or patience to do this themselves. We transacted more than $50 million and in the process I realized how big the collectible market really is—with a market size of about $500 billion, three times the size of Etsy’s market. And no real owner. With two-thirds of the collectible market in the U.S., it made sense to move to the States and I decided on Boulder, Colo. as it seemed a good compromise between running a high-tech business and raising my two young kids.
What is the work you all are doing at hobbyDB?
We are an online platform for the collectibles market with about 530,000 users. It is a complicated undertaking where we are trying to create a database of every collectible ever made. The difficulty comes from the small fact that there are over a hundred billion collectibles in existence and that every type of collectible has its own language and rules. We use a Wikipedia type approach to cataloging all the different collectibles out there as database items are added by a volunteer force which we call “the Squad.” On the pages, you can find various data points displayed related to the collectible such as how many people own it, how many want to own it, when it was made, if it is a limited edition, its current estimated value, and more. You can find a manual for your vintage car, every item that has Coca Cola logo, has a World War II theme or is related to your favorite TV show or fictional character or movie star. It's all there.
You mentioned listing of information such as estimated values. Do you facilitate sales of collectibles on your platform?
We used to have a multi-vendor checkout where a buyer would pay us the same way you pay Amazon. We would then tell the vendor to ship and once the buyer confirmed receipt in good order we would pay the seller. This allowed us to sit in the middle of the transaction to protect both the buyer and seller.
We had to abandon that model because of marketplace facilitator laws, which created new tax obligations that buyers and sellers did not want to pay. There are around 10,000 different tax jurisdictions in the US, all with different tax rates and requirements—we might now have to charge something like a 13.6 percent tax if the buyer lived in Arab, Ga. or 9.5% percent tax if they live in Los Angeles, Calif., for example.
As a result of these laws, we saw a big transition to social media sites that act as classified businesses—which are exempt from Marketplace facilitator laws—where people can post listings for items, but there’s no intermediary that can serve as a verifier of the seller or that a product is shipped. Instead, the buyer and seller talk directly to each other and work out the details. We moved to a similar model. It is less safe for all participants in a transaction, but it's what the customer wants based on the incentives created by the law.
As you laid out, hobbyDB’s platform has the ability for users to share posts about their collectibles with friends. Have you given thought to what this user-generated content means for hobbyDB from a legal and policy perspective, and what might it mean for your company if the law changed?
For copyright issues we follow the rules laid out by the Digital Millennium Copyright Act (DMCA), and the structure of that system has worked well for us. We’ve only had one party make a couple of complaints. These complaints were valid and were properly dealt with on our platform. We wish that there was a similar straight forward process for trademark issues. Ideally the DMCA would just be extended to cover alleged trademark infringements as well. It would make it much easier to run a user generated content business. In fact most online businesses treat the two the same but that can backfire, for the trademark owner as well as the user-generated hosting site.
I understand that your company has some experience with crowdfunding. What was that process like for you all and were there any issues that you faced that policymakers should be aware of?
I like the crowdfunding process. We asked our volunteers to become owners of the company, and through our crowdfunding efforts, we have 1,100 people who now own part of our company (in fact, we are just raising our 3rd Crowdfunding round on Wefunder now). It's been a great tool to have—but not without issue. For example, it is unclear when you need a transfer agent, and there are thresholds with new legal requirements that apply, such as when you reach 2,000 investors. We're likely going to get there next year, so I have had to dedicate some time and resources toward trying to understand all the requirements involved. We use an excellent local firm called KO and while they do a lot of corporate and M&A work, even they were struggling with understanding some of the number thresholds, when trying to figure out if we are compliant with all the rules. We are compliant, but the complexity that still surrounds crowdfunding as you scale and the different thresholds that exist creates unnecessary burdens that policymakers should work to address.
Are there any local, state, or federal startup issues that you think should receive more attention from policymakers?
I'm here on an E-2 investor visa. The initial process of getting the visa through the Embassy in London wasn’t too challenging. But the renewal process was unnecessarily cumbersome and wasteful. I had to leave the country because you can only get this visa renewed outside the country. So I travelled to Germany and stayed there for two weeks and during most of that time didn't know when I would be able to come back. My wife chose to go to Canada instead with my kids and stayed there for three weeks. It was totally nonsensical. When I finally had my interview at the embassy in Frankfort it was all over in less than 30 seconds. They asked me to verify a couple of trivial details about my business, like how many employees I have, and then gave me the visa. The process cost me around $14,000 for the visa and legal fees. On top of that, the E-2 investor visa does not allow access to any of the fast-track methods such as CLEAR or TSA pre-check to get in and out of the country, costing extra hours when coming in and out of the U.S.. The whole system is expensive and just doesn't seem to be set up well for promoting the immigration of those involved in starting up high-growth businesses.
What are your goals for hobbyDB moving forward?
hobbyDB aims to catalog every collectible ever made, making it the ultimate reference for collectors of all kinds. There are a number of websites that are the go-to for certain needs such as IMDb or Wikipedia. For us, we aim to be the website everybody frequents for all things collectible.
All of the information in this profile was accurate at the date and time of publication.
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