eBay Set the standard for e-Commerce for two decades

by Angela Hausman, PhD December 10, 2015 observe @MarketingLetter

December 10, 2015

It’s hard to believe, but eBay is twenty years old this yr. How did a humble firm start as a aspect business for Pierre Omidyar emerge as the gold same old for e-Commerce?

a good idea – solved a problem shared by a large # of people

good leadership

constant innovation – businesses succeed or fail via innovation

shoppers buy options; no longer merchandise

a hit companies by no means lose sight of why consumers purchase their merchandise — as a result of they resolve a problem.

discovering a problem is step one in success.

Then, determine how large an issue it’s — can existing merchandise resolve the issue? Is the issue trivial or debilitating? the larger the hole between problem and answer; the extra critical the issue, the larger the opportunity.

at last, assess the scale of the issue — do a few folks to find the issue actually stressful or is it ubiquitous? The extra individuals who undergo the problem, the larger your possibility.

leadership

What constitutes management varies according to context and orientation. for a few years, effective management supposed managing people and tactics more than giving orders and knowing everything. efficient leaders encourage staff and remove roadblocks to their success.

deciding upon a foul chief is far more straightforward than a excellent leader. dangerous leaders:

lack empathy
concern trade
are too bossy
are wishy-washy
a negative decide of character
lack humility
express bad efficiency
have bad verbal exchange
are rigid

No business succeeds without good management.

To his credit score, Omidyar didn’t attempt to run the corporate himself. He hired ability (like Meg Whitman – its first CEO and Jeffrey Skoll, its first president) and stayed out of find out how to let these skills people force the company — supervising an IPO that skyrocketed on its first day of buying and selling and increasing the choice of auctions 10 fold.

steady innovation

Innovation is the lifeblood of industry and any trade that isn’t actively innovating is failing.

somewhat than focus on its key income adaptation — collectable moves — the corporate accelerated into associated and ancillary companies. Internally, eBay accelerated its auction portfolio to all kinds of objects (even supposing some categories are banned), most significantly trip products through an agreement with a trip firm.

When Whitman joined eBay as CEO in 1998, she received innovation via new, revolutionary firms related to e-commerce, comparable to PayPal and Skype. speedy enlargement included Europe and, quickly, different international locations. Their only failure was once in China, where the strength of rivals like Taobao and, later, Alibaba forced the company to retreat.

classes from ebay

obviously, mimicking Ebay by means of using the three characteristics above underpins any effort to garner the returns the company enjoys.

different classes are extra specific to the e-commerce house in which they compete.

Eschew ownership
include data
keep on with your knitting

Eschew possession

As a part of the sharing economy — in fact, an early leader — eBay identified that consumers have things they don’t need or that they’re prepared to share both after they’ve used it or once they’re not the use of it. Uber and Airbnb later followed the identical mantra in creating their own products the place shoppers share possession of property.

As Ebay moved faraway from their early roots in shopper sharing toward a normal e-commerce site involving sale of latest items somewhat than auctions for used ones, new entrants crammed the void. corporations like letgo and Craigslist, which is 25% owned by means of eBay, function as used e-commerce web sites without the public sale choice.

Amazon took a somewhat different spin on the entire possession factor through promoting custom revealed books via Kindle or as printed books. Authors now needn’t use a writer, however can submit on Amazon via a profit-sharing settlement.

through no longer proudly owning merchandise, firms scale back industry risk significantly. If an merchandise doesn’t sell, the owner loses, now not the etailer. Plus, there’s no pricey overhead for storage, theft, harm, or obsolescence.

knowledge and metrics

running a trade through the seat of your pants was once by no means a good idea, but the importance of knowledge for the up to date agency raises the stakes significantly. Google and fb both make a significant amount of cash via get entry to to huge amounts of data and their means to make use of that knowledge in growing their companies.

eBay also is aware of the worth of the metrics they possess — estimated at 50 petabytes a day.

to position that into point of view, 50 petabytes represents all of the written works of mankind in all languages. Or, rather a lot.

to regulate this knowledge river, eBay employs 5000 knowledge analysts.

stick with your knitting

while eBay ventured out from its e-commerce origins, it didn’t stray too some distance — as a minimum originally. And, that’s important.

A trade wants center of attention — increasing into related areas is okay, however going manner outdoor their information zone is unhealthy. growth must build on current knowledge of the product market, goal market, or each. knowing the expertise additionally helps, however is less important than product and market information.