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    • Part 9: Road shows for public offerings are two weeks of Hell, where you make 45 pitches to hardened investors in New York and Boston. eBay and Fatbrain were the only two companies going public at the time, so we saw each other several times a day as Pierre & Meg Whitman, eBay’s CEO, exited a room and we entered. Investors constantly asked me what I thought of eBay. I suppressed my few bad experiences with buyers & sellers, and raved about their model, Pierre, Meg and Bob. 

      But in the middle of eBay’s roadshow Yahoo announced that it had teamed up with Onsale to offer free person-to-person auctions on Yahoo’s home page. Oh my God. Investors were already skeptical of eBay, Yahoo was perhaps the Internet’s most admired company, and unlike eBay they didn’t charge a fee.

      I asked Pierre what to say when investors asked. I felt sorry for him. He kept his famous cool and said that first, Yahoo would learn that if a seller isn’t willing to pay a modest listing fee, they have junk to list which would tarnish the site. Second, the buyers wanted to go where the sellers are and the sellers wanted to go where the buyers are. eBay had amassed both.

      Many investors I spoke to were skeptical and said they would sell the stock on the first day of trading. What no one saw coming was that eBay’s huge community loved the company and bought stock as soon as the company started trading, pushing the stock price to $53.50 on its first day. Pierre’s hours on Usenet and eBay’s Bulletin Board had just made him very rich. And those buyers were likely to hang on to the stock.

      Hardly anyone knew that Jeff Bezos was coming for them.

    • Part 10: Amazon is famous for not focusing on competitors, but according to The Everything Store, they worried about eBay. “…it was well on its way of intercepting Bezos’s dream of unlimited selection and stealing the mantle of the everything store.”

      Jeff Bezos kept his plans for auctions so confidential that even Scott Cook, on Amazon’s board of directors, didn’t know about them until shortly before launch. Scott was on eBay’s board as well. Scott called me to ask what I thought, as a customer, of the relative strengths of each company’s auctions.

      I was predisposed to being intimidated by Amazon because I knew them as a fierce competitor, and to underestimate eBay because I knew their weaknesses. I sent Scott an email that hung in Meg’s office for months. I had 7 points. Here are 3:

      1. Amazon’s search is sub-second and eBay’s currently takes as long as 2 minutes.
      2. When you search for Porsche on eBay, you also get listings for sex workers named Porsche.
      3. There is too much talk of fraud on eBay’s auctions and Amazon is offering a $250 guarantee.

      Amazon had a huge marketing budget for Auctions. I seem to remember $35 million. I saw entire sides of buildings in New York painted with Amazon Auction ads.

      And yet, after the crash of 2000, eBay was worth more than than Yahoo + Amazon combined.

    • Last part (11): In July of 2002, eBay bought PayPal, the company that had made receiving and sending money so easy to do. An enormous percentage of PayPal's business was with eBay.

      Elon Musk was a large shareholder of PayPal and earned more than $150 million from the sale. He used most of that to start SpaceX and Tesla.

      I have often wondered, would those companies exist without Pierre's eBay? Would we know who Elon Musk is?

    • Thanks for sharing, what an exciting time that must have been, and to be part of it.
      From 1992 -1997 I was living on an island in the South China sea running a dive resort for 10 months a year and partying for the other 2 months during the North East monsoon.
      The first time I used a computer was in 1998,😳 completely missed all of the early years you talk about, so I find it particularly fascinating.

    • Great stories.
      I worked with Chris and Pierre at General Magic. I knew Chris much better, but we were all in the same group. As General Magic faded, I left to join Interactive Imaginations, an early Internet ad network pioneer. Having heard of the growth of AuctionWeb, I talked with Pierre about putting some ads on it. He experimented with it a bit, rotating some on the pages, but the revenues weren't substantial. When I struck out on my own, Pierre talked with me about joining AuctionWeb to do business development. I was intrigued, but Pierre explained that the VCs had told him that the real money is in software, not marketplaces. I couldn't imagine taking a job trying to license the software to a system in which the search function was down about 25% of the time. It seemed the value was completely in the marketplace, despite the weaknesses of the software. I was also put off by the fact that Pierre already had a business guy on board, Jeff Skoll. I thought a guy from the newspaper industry (my dad's business) would be too slow, and I selfishly would have preferred to be the business guy myself. I hinted at merging the shopping directory site I was developing with a friend into AuctionWeb. Pierre said that he didn't want to get in the way of my entrepreneurial dreams. (To bring the story up to date, it turns out that Jeff was a superstar. He became well-known for the volume of messages he could handle, and was incredibly responsive to me, much more than my friends with far fewer excuses to be busy. It was one of my many errors underestimating someone.)
      Shortly thereafter, I parted ways with my friend who was doing the shopping directory, and thought that there was an opportunity to do auctions. If Pierre and Jeff thought it was mostly a software business, then I could license their software and take the web site off their hands. I discussed this with Pierre, and he thought it sounded like an interesting idea. He and Jeff wanted time to think about it, so I went onto Craigslist and found a programmer to help me get something built in parallel while I waited for an answer. About 2-3 weeks later, Pierre told me they wanted to keep their options open, so they'd keep the marketplace. Since Pierre had shared so much detail with me, with no NDA, I thought I should ask his permission to move forward on auctions, with a focus on local markets. He said to go for it, which I thought was incredibly gracious of him. So I started CityAuction.
      Raising money was tough (impossible), partly because VCs said there was already a winner in the auction space. They were referring to OnSale. Most had never heard of eBay (AuctionWeb). About a year later, as we were growing quickly, I got a call from a rowing community friend who had become an investment banker. She wanted to see how I was doing with CityAuction. I had lunch with her and enthusiastically told her all sorts of details about how we were doing. Fast forward about 2 months, and eBay announced its IPO, with this friend as one of the bankers on the deal.
      The eBay IPO was a boon to us. Suddenly, auctions weren't flea markets for Beanie Babies, they were real. I got a call from Amazon business development. They had quietly been using our site for a month, testing its usability, before contacting us. We had a meeting in SF, and I suggested meeting at a local coffee shop, which was our habit, since our office (formerly the server room for our ISP) wasn't presentable, had no windows, had no room for visitors, and had no table. We just had a plywood sheet we could put on our knees. The Amazon guys insisted on meeting at our office, and said Jeff would love it. They wanted us to go to Seattle to meet with them and talk about them getting into the auction business.
      We went there, and had the most extraordinary meeting with all of Amazon's top brass. They openly discussed the pros and cons of getting into the auction business and competing with eBay. It was an early version of the rigorous process for which Amazon has become famous. They were debating whether to enter full-bore, or to list things in-line with Amazon's product catalog, or not to enter at all. There in that room, the debate about whether Amazon would take on eBay took place.

    • ...our office (formerly the server room for our ISP) wasn't presentable, had no windows, had no room for visitors, and had no table. We just had a plywood sheet we could put on our knees.

      I love it! 😂

    • [Steve Schramm] I was VP Engineering and General Manager at Magic, so Pierre was on my team for much of the time. In 1995, Pierre told me he was off to look for VC funding, as things at Magic weren't going anywhere and as Chris mentioned, eBay was taking off. I said that made sense and wished him good luck. Afterward, when I asked Pierre how it went and whether he was leaving, he said that he was staying because no one was interested in investing. So he continued working, and eBay continued thriving, so much so that it became profitable with no VC funding. Back in 1995, Pierre had previously been willing to sell a significant amount of ownership, possibly in excess of 50%, to obtain $5M in funding. Now that eBay was paying for itself, Pierre told me he didn't "need" the money and would only take it to accelerate growth, and only if he gave up a small amount (5%-10%) of ownership. He also told me he wasn't going to ask any of the VCs who told him "no" in 1995. Benchmark was lucky, because they didn't exist when Pierre went looking for VC backing! They jumped at the opportunity to invest in what seemed to be a sure winner, even though they only got a small piece of the action (but it was soon worth over $1B). Much later, in 2001, Benchmark recruited me to help turn around another company they had invested in but whose business model no longer made sense after the dot com crash. Andy Rachleff (Benchmark) and Marc Andreessen were my Board, and I asked Andy, "If Benchmark had existed when Pierre was looking the first time, do you think Benchmark would have invested?" Andy replied, "Probably not".

    • I did what Andy and Marc wanted; slashed burn by shutting down all the remote development and sales offices, getting out of the leases, consolidating R&D in Mountain View, building a team, rearchitecting the product for delivery to the Enterprise, and making our first sales. The company is still running successfully though there was no liquidity event. I went on to found another [unrelated] company that we sold to Cisco in 2006.