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.