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.