Lynn Reedy, senior vice president of product, development and architecture at eBay, sets the stage for the talk about eBay, its history, leadership and how to be successful at a high growth company.
Reedy shares a commercial that is going to air later in the week. She talks about eBay's vision - providing a global online trading platform - and the value proposition - making inefficient markets efficient by bring back the fun and the passion.
Reedy talks about eBay's site statistics - on an average day a vehicle is sold every 2 minutes, a car part or accessory sold every 3 seconds, diamond jewelry sold every 83 seconds, and timberland shoes sold every 10 minutes. eBay brings buyers and sellers together, she says. The company has 83 million registered users with net revenue pf $531M in Q3 2003.
Reedy talks about eBay's global presence in over 27 countries. eBay has partial ownership in some companies, she says. Eighteen countries were running an eBay platform in 1998, for example, when eBay was only operating in the US.
Reedy explains that eBay has 670 million page views a day, 120 million searches, and 4 billion database calls. She talks about how eBay uses a special platform to handle this large volume.
Reedy talks about the three key factors in eBay's success: 1) A great idea 2) A great business model without sales force or inventory 3) A management team that ensured eBay was at the right place at the right time.
Reedy talks about a key principle that the CEO instilled in the management of the company: the right people at the right job at the right time with the right behavior. A company should have the flexibility to change people as it grows and needs people with different skills, she says. Managers should mentor their employees and focus on career development, she adds.
Reedy explains that another principle instilled in the people at eBay is to develop and execute the right strategy at the right time. If you execute the wrong strategy at the wrong time, you will not have success, she adds.
Reedy talks about the importance of rapid execution with integrity and confidence: executing with a vengeance. Another important principle, she says, is to keep the community front and center in the decision making. The founder understood the power of the community and till this day the community is at the center of everything that eBay does, she adds.
Reedy talks about how eBay uses the community and their feedback for every new feature they develop. eBay is not a product but a platform, she says.
Reedy talks about the importance of being flexible. In a high growth company, like eBay, opportunities arise everyday and if a company is not flexible it will miss these opportunities, she says. Similarly, as issues arise, eBay is flexible and willing to tackle these issues, she adds.
Reedy talks about what the success in the engineering organization of a high growth company is. The business has two levers: the website, which is the product, and the product enhancements that eBay does as well as the marketing. The engineering group is pragmatic and focuses on value. Time to market is very important. The technology is made for the business and for the future, she says,and is flexible and continuously improves.
Reedy talks about how the eBay team came to the rescue in September 2001. The team was given only three days to launch The Auction for America, which required 20 hours alone for coding and additional time for testing. One hundred people worked on this over the weekend and they had the product one hour before the deadline. No one said we can't do this, she says. The teams had to collaborate and work together to get this done.
Reedy talks about how eBay continuously improves. She gives examples from within eBay to illustrate how they execute improvement.
Reedy talks about the leadership characteristics at eBay - understanding the eBay DNA, always creating a compelling sense of purpose, setting clear objectives, building a strong team, knowing how to prioritize, how to multi task and understand when you need to have a sense of urgency, diving deep and solving problems quickly, making and meeting commitments, leading and not being a victim. As a leader, she says, you have to have the right strategy and then execute.
Stephanie Tilenius, vice president and general manager for merchant services at PayPal, an eBay company, shares in detail the story of the acquisition of Auction Co, a successful company in Korea. This brings to life management characteristics and values and execution, she says. Tilenius defines the situation, the process within eBay, and eBay's response to a different market place.
Tilenius continues with the story of the acquisition and Project Golden Bell. A SWAT team was formed to find the right answer,she says. There were 3 platforms and 3 pricing strategies, which the SWAT team reduced to one platform and one pricing strategy. She talks about how they moved to an eBay auction model and restructured Auction Co. while understanding the new community.
Tilenius talks about the lessons learned as eBay has grown. These include: 1) How to execute and maintain focus 2) Setting the bar very high 3) Doing things fast to maintain momentum 4) Listening to the community 5) Acting with integrity and confidence.
Pierre Omidyar, the founder of eBay, had a sense of community, says Tilenius. He constructed a process of feedback to make it easier for two strangers to buy and sell. Having been an entrepreneur before eBay, Omidyar was thinking creatively about how to get profitability. The feedback system was his way of getting out of the middle. At every stage he found ways of letting the community run itself so that the company could become profitable from the beginning.
Tilenius talks about eBay's late launch into Japan when Yahoo! was already Number One in Japan with 500,000 listings. This made it difficult for eBay and they made the decision to exit. We believe that you have to be number one in the market or it isn't worth investing in, she says.
Reedy talks about how eBay views PayPal. PayPal is a payment platform while eBay is the auction platform and hence the two coexist very well. Tilenius talks about the integration of PayPal into eBay. They plan to keep it as a separate platform because the vision is to have PayPal the payment platform for the entire web. In the long term they will try to integrate what they have at eBay and PayPal to create an end to end e-commerce solution.
eBay is in 28 countries and the company is looking into cost effective ways to enter new markets, says Reedy. PayPal will attack Europe next year. Typically, eBay, being global, can enter new countries easily; in the case of PayPal it will take more effort. When making an acquisition eBay lets the business strategy define the process or platform. Over time they look for ways to move the country onto the platform as long as it does not put the country or the business model at risk.
Reedy tells the story of the brand name eBay. The founder,Pierre Omidyar, wanted to call the website "echobay" but it was taken, so he went with eBay.
Reedy explains how a company goes from 3 billion to 30 billion. eBay has less that 1% of the retail market in most cases. Management believes that eBay should do more of the stuff that they are already doing. eBay will expand to new countries and work at categories like business and industrial. The company plans to achieve this goals of 30 billion using its platform and by learning from the buyers and sellers, she adds.
Tilenius talks about how eBay has the technology for wireless integration but the demand for wireless notices is not high enough. In Germany they have a wireless provider who sends users messages if they have been outbid, she says. Besides Korea and Germany, other countries do not have high penetration for wireless trading, she adds.
An important area for improvement is cross-border trade, which includes shipping, customs and language translation, says Tilenius. Creating businesses around eBay to continue to grow the trading community (e.g. Auction Drop) is also important. Some of the key questions the company attempts to answer are: How do we convince people of the safety of the site, and how do we make it easier to use?
Tilenius talks about the long term plan of eBay, which is to have a language translator so that there is one platform and one user ID to trade across borders. eBay has not found the technology to do this yet, she says.
eBay has about 5000 pages that must be localized, says Tilenius. Hence, eBay plans to reduce pages, keeping the important functionality and making it easier to go from country to country. However, the countries where eBay is present have more similarities than differences. Thus, eBay only has to be customized in a few areas, including language and message boards, she adds.