Summary of Guy Kawasaki's chat with eBay Founder Pierre Omidyer

Here is a detailed summary of Guy Kawasaki's interview with eBay founder Pierre Omidyer.  Although it occurred in September of 2000, it provides a fascinating set of fundamental key take-aways that any entrepreneur should not forget.  With eBay Live happening right now, it's a great time to "rediscover" the essence of the concept.  Because the video is quite long, I felt a quick reference guide may be in order.

Rules to build your business buy:

• Build it around the community and the users, not for the product to be sold
• Force yourself to spend time in all parts of the business (from Care to IT to Sales)
• Talk / listen to your customers / users everyday

How to staff the right way:

• Be leery of "founderitis" and be able to let go and trust others
• Hire folks who know more than you do in key areas or disciplines
• Empower others to be experts in what they do and then step back

Find the source for growth / buzz:

• Seek out and understand the communities that drive opinions in your space
• For eBay, it was initially the newsgroups
• (implied point) Today it is blogs and social networking sites

Have a core set of values:

• For eBay, it was to provide users with a more efficient way to manage a transaction
• The key was to provide a way for users to aggregate their communication & sales facilitation
• This translated into consumers becoming producers

It's tougher to launch a business now than ever before:

• It's a crowded space
• Raw hype and buzz without a solid product is not a good thing
• Early on, your brand image is built upon the experience you do or don't create
• If expectations are higher than the delivered experience - your brand will suffer

Acquire the right venture capital partners:

• They can bring huge value beyond money - regardless of your business platform
• For eBay, VC's allowed for growth versus just keeping the lights on (eBay was cash flow positive from the start)
• The value of a good VC goes beyond funding - to strategic partnerships and hiring talent
• Be careful in how you allocate equity - base it on the financial status of your business

Mistakes will be made:

• While key strategic blunders were minimal, operational mistakes did (and will) happen
• Too little investment into core areas, such as customer support and technology, caused issues

Key hiring (Meg Whitman as CEO) is tough but can be done:

• Benchmark Capital (VC) assisted with recruiting, along with a retained search firm
• Pierre and Jeff agreed up front that neither could be the long-term CEO to take eBay to next level
• They went through 70 names and feared they could not get Meg
• Key face-to-face meetings allowed eBay to show the human side of the business to Meg
• Meg could quickly focus in and translate their stories into real business and marketing concepts
• Transitioning to Meg required her communication skills and respect of eBay's existing "history"

Staying motivated after the IPO (attracting and retaining talent):

• Focus discussions on the difference between good and bad quality businesses
• Emphasize the "human side" of eBay, such as users who went from nothing to everything
• Speak of true stories of your customers' / users' successes to develop a moral high ground
• Drive home the value proposition you provide to your end users

There are downsides of going public:

• You must balance strategic decisions between impacts on "the street" and "the company"
• Performance becomes a quarterly focus and can antagonize the longer term decision
• Decisions you make as a public company may not be those you would have made while private

Managing growth:

• You want to maintain a world where your users / customers drive your community / innovation
• Achieving a mass market stage may require you to focus on less than 100% of your users

How to stay motivated during maturity:

• Pierre stays motivated because eBay is a fundamentally "good thing" for the users
• eBay allows folks to go from customers to producers (issue / value equation)
• The "product" is tied to a larger social benefit for the global marketplace

Giving back to the community:

• When you achieve a certain level of personal wealth, then give back to the community
• It's a concept that is easier to say than do
• There is a complex set of decisions and processes to make it happen
• Ensure that you do your research (and get help) on each idea that you could invest in
• Take your time and screen the business cases with care
• Focus on making a lasting impact on society
• Pierre and his wife would like to ensure that we all rediscover the concept of community

Again - to see the full video go to Guy Kawasaki's posting.

Comments

[Guy Kawasaki]

Thanks for doing this. i just linked to this from my blog.

Guy

[Auri Biswas]

Besides being a great summary, your piece carries an important lesson as well! Let me elaborate.

Your summary is living proof that often a simple and useful idea will be overlooked by the hordes chasing trends and technologies - and losing sight of providing a "good thing" for users!

The fact that after the brief duration of 6 years (what is that in internet time again?!) someone thought of doing a textual summary (and doing it well, I would add, as Guy's immediate endorsement also indicates) - should provide inspiration and encouragement to aspiring entrepreneurs who may be worrying about the fifth point - "launching a business is tougher than ever".

Thanks again.
Regards,
Auri -at- Art-of-Innovation.com