The Perfect Store: Inside eBay

reviewed by: D. Manggala (May 15, 2005)

I was an active buyer in eBay, trying to find some cheap stuffs like gadget (PDA, wi-fi card, or else) and sometimes cheap books (but for books, Amazon's market place is much better). I am not a heavy user of eBay, but I know some friends who buy more things from this online company, including cars (!). They are not buying a car once, but several cars in different occasion...:) One thing that amazed me about its business model is eBay could connect people from almost anywhere in the world to make a huge market for supply-demand on almost anything, anytime (anyone read a story about a ghost or a fighter jet sold on eBay?).
Adam Cohen wrote a nice read book about this successful dotcom titled "The Perfect Store: Inside eBay". This book is a fun read; I like the writing style and also the amount of research and facts backing up the whole writing. In addition, Cohen provides us a multidimensional outlook of eBay (maybe a little bit skewed in favor of eBay); from the start up until its heydey post IPO (inital public offering), from the positive side to the bad side of this online auction company. I think he's quite balance on each side.
One thing that especially good to know is the story about the transitional of a start up company from a place of all geeks to the incoming of MBAs from ivy league universities. The author put some interesting story about this transition including the effects (both positive and negative) of Meg Whitman's coming as the CEO.
According to this book, the first three full time employees of eBay are a perfect mix: Pierre Omidyar (an Iranian-French whose parents migrate to US when he was a child), Jeff Skoll ( a Canadian Jewish), and Mary Lou Song (a Korean-American). In the era of the buzzwords such as "globalization" and "diversity", I think these three people are perfect examples of those words. The common ground for them, I think, are that they were young (mid twenties or so), and believe in that internet could give something good for the societies. Or in Omidyar's words " it's about empowering people.."
If you are just joined as an eBay user recently, this book provides some historical information about many things in the system; for instance, the feedback forum, bulletin board, etc. For me, it helps me a lot to understand more about its business. And also it gives us a story about the Half.com, Paypal and others companies related to online auction which bought out by eBay.
We know that, eBay was having profit from its first day when it was called AuctionWeb. In the early days, they even had to hire a part time employee to open the envelopes from users who send their transactions' fees to their office (whic is Omidyar's apartment) and many envelopes were still unopened. Until years later they have been pretty self sufficient in funding till the time of the IPO came.
One thing that disturbed me a little bit is the timeline in this book. Because Cohen wrote this book by subject, I sometimes confused about the period because it goes back and forth from chapter to chapter (it does not in chronological order); which is ok, but I think it needs time reference somewhere in the writing in each chapter.
My key takeaway from this book is Pierre Omidyar's and his idealism on using internet to empower people. There are a lot of stories and anecdotes about it such as his repetitive words "use the money wisely just it as yours" or his belief to treat all eBay user as a "community". In the early days, almost all eBay employees share the same belief with Pierre (for sure, we don't know about now). Omidyar believes that "people is generally good" and that is the basis of his ethical groundrule for eBay community: "treat others as you want them to treat you" (and yes, that is the golden rule).
So, it is a really interesting book and also a good one, if you do like eBay. There are some interesting real characters also mentioned in detail in this book, such as Jim Griffith, who was known as Uncle Griff, the most helpful person in the bulletin board in the early days, Patty Ruby or Aunt Patty, Skippy, Mary Lou Song and other characters (well you should read the book from here...)
Lesson learned from eBay: Omidyar took a humble start as a start up company, maintain low-key play and almost never spend too much on anything that is not productive. Keep it low profile, high profit...:)