eBay is home to sellers across the globe. It is especially popular amongst smaller businesses and individual sellers, with its easy set up and instant auction capabilities. The founder, Pierre Omidyar, started eBay while employed at a software company, and eBay’s success story started there. The very first sale on the site was a broken laser pointer. Now, it has an average of 167 million users and 25 million sellers. Omidyar is one of the richest people in the world and is ranked 106th on the Forbes Billionaire list; with this on his record, we look at how he achieved his success, and some takeaways for businesses today.
Setting up eBay
In 1995, Omidyar created a page on his website called Auction Web, which allowed people to list items for auction. This grew in popularity quickly, and eventually he gave it its own separate site, which became the now-familiar home of eBay.com. His interest in people is what drove eBay; “When I started eBay, it was a hobby, an experiment to see if people could use the Internet to be empowered through access to an efficient market.” Within three years, the site boasted 2.1 million members and generated $750 million in revenue. This was enough to catch the attention of Amazon, who started their own auction site as competition.
By charging a small amount for people to list their products for auction, eBay were able to take a percentage of it to put back into the business, and eBay’s growth began. As users started flocking to eBay, one thing remained pertinent in Omidyar’s mind: that people are inherently good. The massive growth of eBay is in part due to his belief in sellers, and his understanding that empowering sellers will make eBay a more powerful platform; “eBay’s business is based on enabling someone to do business with another person, and to do that, they first have to develop some measure of trust, either in the other person or the system.”
Takeaways for businesses today
- Focus on your customers – One of the reasons eBay as a marketplace works so well is because of the millions of person to person transactions that happen every year, and the trust that people put in sellers to deliver the goods they ordered, as promised. This has worked wonders for eBay, and is likely to work wonders for other businesses if they start working to empower their customers. This could be something as simple as setting up a customer group on Facebook, so customers can share their experiences with your product or service, and build positive relationships with each other as a result.
- Try new things – eBay was started as a hobby whilst Omidyar worked full-time, and has grown into a multi-million dollar auction site. Omidyar himself said; “a lot of people don’t just go ahead and try things.”. When operating a business, test out new ideas and take calculated risks. Your ideas could materialise into something bigger than you imagined, and if they don’t, know when to cut your losses, reflect on what didn’t work, and apply that to the next idea you have.
- Don’t delegate, inspire – After Omidyar launched eBay, he started getting hounded with complaints from customers, about other customers. He created a feedback forum as a tool to help users log complaints (as well as praise). This ended up very positive, and comments flooded in with people praising others for the good things they were doing. This shaped Omidyar’s leadership style, which he exercises at eBay today; “instead of telling my executives what to do, I try to inspire them with a vision of where we’re going and let them translate that in their own terms, based on their own experience, their own expertise.”