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Pierre Omidyar was born in Paris in 1967 to a
French-Iranian family that placed a premium on intellectual pursuits.
Omidyar's parents had been sent to France by their families as young
adults to get a better education than was available in Iran in the early
1960s. Omidyar's father attended medical school; his mother studied
linguistics at the Sorbonne. They met for the first time in their
adopted land-an encounter that was all but inevitable, given the size of
the city's Iranian community—and eventually married. When Pierre, their
only child, was six, they emigrated to the United States so that his
father could begin a urology residency at Johns Hopkins University in
Baltimore.
Growing up in and around Washington, D.C., Omidyar was a
typical American child, except for his early fascination with computers.
In seventh grade, Omidyar used to sneak out of gym class and make his
way to the unlocked closet where his science teacher stored a cheap
Radio Shack TRS-80. While his classmates played dodgeball and practiced
layups, he used the "trash 80," as it was known, to teach himself to
program in BASIC. Omidyar lived in Hawaii during eighth and ninth
grades, while his mother did linguistics fieldwork. When he returned to
Washington, he graduated to an Apple II, and he was programming in
PASCAL, a step up from BASIC. Omidyar used his skills to get his first
paying job, computerizing his school library's card catalog for six
dollars an hour. "I was your typical nerd or geek in high school," he
says. "I forget which is the good one now."
Omidyar arrived at Tufts University, a few miles from Boston, in the
mid-1980s, just as the tech world was about to explode. His major was
computer science, and his passion was Apple programming. At the time,
identifying with Apple was a statement of personal values as much as a
choice of technology—the computer-lab version of participating in a
1960s march on Washington. Under the charismatic leadership of Steve
Jobs, Apple had styled itself as a hip, iconoclastic alternative to IBM
and the other computer behemoths. Apple's view of itself was captured in
a now-legendary 1984 Super Bowl commercial in which a lone woman,
pursued by storm troopers, hurled a hammer at a Big Brother figure on an
enormous television, shattering the screen. Omidyar did his own small
part to rebel against mainstream computing by staying out of the Tufts
computer lab, which was stocked with PCs, and working from his dorm room
on a Macintosh. He eventually wrote his first Mac programmer's utility,
a tool for use by other programmers.
In his junior year, Omidyar decided he wanted to spend the summer as
a Macintosh programmer. He searched ads in Macworld and sent out letters
to companies that used the Mac platform, enclosing a copy of his
programmer's utility as a work sample. Omidyar got an interview, and a
summer internship in Silicon Valley with Innovative Data Design, one of
the first companies to write programs that allowed Mac users to draw
images with their computer. The internship led to a full-time job, and
he took off the fall semester to keep at it. Omidyar fit in easily in
Silicon Valley's programmer subculture. With his ponytail, beard, and
aviator-style glasses, he had the look. He also had the worldview.
Omidyar was politically libertarian, and he liked talking about
philosophy, UFOs, and space aliens. After one more seamester at Tufts,
Omidyar moved out West for good, finishing up his undergraduate degree
at the University of California-Berkeley.
After he left Innovative Data Design, Omidyar took a job at Claris,
an Apple subsidiary that developed consumer-applications software.
Claris was supposed to be headed to an IPO, but while Omidyar was there
it ended up being reabsorbed by Apple. The change in plans led to a mass
exodus of talent, and Omidyar was among those who headed out the door.
For his next venture, Omidyar teamed up with friends, including a former
Claris colleague, in 1991 to found a startup called Ink Development
Corporation. Ink Development was producing software for what looked like
the next big thing in technology: pen-based computers. The thinking was
that users would abandon their keyboards and use a stylus for writing,
an approach Palm would popularize years later. "It was going to be
great; it was going to bring computers down to the rest of us," says
Omidyar. "Of course, the market didn't think so."
A year and a half into their great experiment, Omidyar and his
partners realized that pen-based computing was not about to take off
anytime soon. As it happened, Ink Development had also put together some
software tools for online commerce, and this marginal project now seemed
to be the most promising part of the business. The company relaunched as
eShop, an electronic retailing company. EShop was moving in the general
direction of the Internet, but not fast enough for Omidyar. It was still
stuck on the idea of conducting e-commerce on proprietary networks-close
to, but still distinct from, the actual Internet. In 1994, Omidyar left
eShop. He wanted a job that would let him "do Internet things," he says,
as well as put him in more direct contact with people than he had been
in his string of programming jobs. Omidyar retained a sizable equity
stake in the company he helped found. Two years later, Microsoft bought
out eShop, and the stock Omidyar received from the software giant made
him a millionaire before he turned thirty.
Omidyar's next job gave him the greater exposure to the Internet that
he had been seeking. He joined the developer-relations department at
General Magic, a hot mobile-communications start-up. General Magic,
which had been started in 1990 by a group of Apple veterans, was trying
to take Apple in a post-Macintosh direction by building a new generation
of small, communication-oriented Apple computers that would work with
telephones and fax machines. In his new position, Omidyar also had
contact with people: his job was to help third-party software
developers-programmers outside the company—write software that worked
with General Magic's Magic Cap platform. It was while Omidyar was at
General Magic, working with both the Internet and with people, that he
created AuctionWeb.
It started, legend has it, with PEZ.
In the summer of 1995, Pierre Omidyar was having dinner at home in
Campbell with his fiancée, Pam Wesley. Wesley collected PEZ dispensers,
and she mentioned that since they had moved from Boston to Silicon
Valley, she was having trouble finding fellow collectors to trade with.
It occurred to Omidyar that the still-fledgling Internet could provide
the answer. He came to Wesley's rescue by writing the code for what
would one day become eBay.
The PEZ dispenser story has been told and retold in countless popular
accounts of eBay's history. But it is, Omidyar concedes, the "romantic"
version of eBay's founding. The truth is, in the summer of 1995 Omidyar
was doing what every other smart tech person within a hundred-mile
radius of San Jose was doing: obsessing about the Internet and the uses
to which it could be put.
Omidyar had not come west with Internet dreams. He had intended to
program for the Macintosh, the computer platform he had fallen in love
with in high school. But Silicon Valley in 1995 was, like Boston in 1775
or Sutter's Mill in 1849, a place caught up in an intoxicating shared
vision of what the future would look like. The Internet was fast gaining
critical mass. Dial-up service providers like AOL, CompuServe, and
Prodigy were bringing millions of Americans online. Stanford engineering
graduate students Jerry Yang and David Filo were attracting more than
one million page views a day with a search engine they had named Yet
Another Hierarchical Officious Oracle, abbreviated as Yahoo! If there
had been any doubt about the commercial viability of the new medium, it
was dispelled —for several years, anyway—when Netscape went public in
August with a red-hot IPO that was widely regarded as the opening salvo
of the Internet revolution.
Omidyar was ready to enlist. He was no stranger to cyberspace: he had
been online for years, going back to his undergraduate days at Tufts.
Back then, the Internet was a geeky backwater, the online equivalent of
a high school audiovisual lab, where engineering students hung out in
Usenet newsgroups trading jokes with punch lines like "3.14159," and
Star Trek aficionados whiled away the early morning hours debating
Klingon history. In college, Omidyar himself had been a regular in one
of the geekiest newsgroups of all, a Usenet newsgroup for Macintosh
programmers.
By the mid-1990s, however, a new Internet was emerging. Lowkey
newsgroups were being pushed aside by something far glitzier- the World
Wide Web, which suddenly gave anyone with a PC and a modem the power to
call up documents stored on computers anywhere in the world. This new
Internet, which was making the letters www a fixture of everyday
conversation, had the power to connect everyone on earth—not through
static postings left on a message board, but interactively and in real
time. It was clear to anyone who was paying attention that this new
Internet was about to change the world.
And all of Silicon Valley was paying attention. It seemed, that
summer, as if people talked of nothing else. Programmers and
entrepreneurs brainstormed about what the killer application was for
this new technology, and plotted how to get in first with a business
plan. Selling books or drugs or furniture. Delivering news or groceries
or pet supplies. Mixing in celebrities or gambling or pornography. The
millions—the billions—would pour in. Compared to the hot ideas bouncing
around the Valley that summer, the application Omidyar was wrestling
with had all the sex appeal of a college term paper.
In most times and places, creating a perfect market would have seemed
like an arcane exercise. But in Silicon Valley in the midt 1990s,
financial markets were as much a part of the culture as routers and
microchips. New companies seemed to be going public daily, and freshly
minted millionaires were everywhere. Omidyar kept hearing about company
insiders, often friends and family of the founders, getting rich through
stock purchases that were not available to average investors. This was
standard practice for IPOs, but it struck him as unfair.
Omidyar had experienced the process firsthand. A few years earlier,
he had been closely following a hot new video-game company called 3DO.
Like many techies, Omidyar had been intrigued by its bold vision of
creating a universal standard for the video-game industry. When 3DO
announced plans to go public in May 1993, Omidyar placed an order for
stock through his Charles Schwab brokerage account. What he had not
counted on was that 3DO-whose high-flying CEO, Trip Hawkins, would later
be named one of People magazine's "50 Most Beautiful People"—was about
to become one of the most hyped IPOs of the tech boom. 3DO went public
at $15 a share, but when Omidyar checked his account, he learned that
the stock had soared 50 percent before his order had been filled. It all
worked out in the end; Omidyar later sold his shares at a profit. But it
struck him that this was not how a free market was supposed to operate
—favored buyers paying one price, and ordinary people getting the same
stock moments later at a sizeable markup.
Omidyar's solution was an online auction. He had never attended an
auction himself, and did not know much about how auctions worked. He
just thought of them as "interesting market mechanisms" that would
naturally produce a fair and correct price for stocks, or for anything
anyone wanted to sell. "Instead of posting a classified ad saying I have
this object for sale, give me a hundred dollars, you post it and say
here's a minimum price," he says. "If there's more than one person
interested, let them fight it out." When the fighting was done, Omidyar
says, "the seller would by definition get the market price for the item,
whatever that might be on a particular day."
Since he was still working at General Magic, Omidyar had to do the
programming for his perfect marketplace in his spare time. He was used
to tinkering with Internet applications in his evenings and on weekends.
He had already written a chess-by-mail program, which he was offering
for free over the Internet. He had also completed the coding for a
program he was calling WebMail Service, which allowed owners of
small-screen computer devices like the Newton to get access to Internet
pages through standard e-mail. More recently, he had created WebMail
Watch Service, which monitored web pages users were interested in, and
notified them when the pages had changed.
With Labor Day approaching, Omidyar made the program for a perfect
marketplace his project for the long weekend. On Friday afternoon he
holed up in his home office, a converted extra bedroom on the second
floor of his modest town house, and began writing code. By Labor Day, he
had created an auction website. The site was not much to look at. Its
blocky blue-black text against a dingy gray background gave it all the
graphic charm of a Usenet newsgroup. Omidyar had no real idea what
people would want to sell, so he just created categories as they
occurred to him—computer hardware and software, consumer electronics,
antiques and collectibles, books and comics, automotive, and
miscellaneous. The computer code Omidyar wrote let users do only three
things: list items, view items, and place bids. The name he chose was as
utilitarian as the site itself: AuctionWeb.
Since AuctionWeb was only a hobby, and he intended to offer its
services for free, Omidyar tried to keep costs low. He wrote the program
by patching together freeware he found on the Internet, and he ran the
site from his home, off of a $30-a-month account he already had with
Best, his Internet service provider. Rather than create a new website,
he added AuctionWeb to one he was already operating. That spring,
Omidyar had formed a sole proprietorship for his web consulting and
freelance technology work, which he had named Echo Bay Technology Group.
The name was not a reference to Echo Bay, Nevada, the wilderness area
near Lake Mead, or to any other real-world Echo Bay. "It just sounded
cool," he says. When he tried to register EchoBay.com, however, he found
he was a few months too late. Echo Bay Mines, a Canadian company that
mined for gold in Nevada, had gotten to it first, and was using
echobay.com for its corporate home page. Omidyar registered what he
considered to be the next best thing: eBay.com.
At the time AuctionWeb launched, Omidyar already had three other home
pages running on eBay.com. One was for a small biotech start-up for
which his fianc?e, Pam Wesley, a management consultant, had been
working. Another belonged to the San Francisco Tufts Alliance, an alumni
group of which Pam was president. The third was Omidyar's own: Ebola
Information, his offbeat tribute to the Ebola virus. The site had a
photograph of the virus that he had found on the Centers for Disease
Control website, and it linked to news stories and data about Ebola and
Ebola outbreaks. If users typed eBay.com/aw into their browser, they
would be taken directly to AuctionWeb, which the home page called
"eBay's AuctionWeb." But if they typed in only eBay.com, they would have
to wade through three home pages, including Omidyar's homage to a
loathsome disease.
On Labor Day, when AuctionWeb was up and running, Omidyar got to work
trying to publicize it. He posted an announcement on a Usenet newsgroup
that tracked new sites, and another on the National Center for
Supercomputing Applications' "What's New" page, where it ran alongside
Battery World, "a one-stop source for all battery needs," and CARveat
Emptor, a site that provided consumer advice about automobile sales and
services. "The most fun buying and selling on the Web," Omidyar wrote in
the "What's New" listing. "Run an auction or join the fun of an existing
auction." But both listings were delayed. The moderator of the new-site
newsgroup had taken Labor Day off; the AuctionWeb listing did not appear
on it until the following day. And because the "What's New" page had a
heavy backlog, the announcement did not go up until October. That meant
that on AuctionWeb's first day, there was no publicity at all. Of
course, even if there had been, many of the site's potential users were
spending the last holiday of the summer outdoors. Given these obstacles,
Omidyar was not discouraged when, at the end of AuctionWeb's first day
of operation, it occurred to him that it had not attracted a single
visitor.
After its traffic-free Labor Day launch, AuctionWeb started to
attract a slow trickle of visitors. Omidyar had none of the slick
marketing devices other websites were starting to employ-no advertising
budget, no public-relations advisers, no deals with other sites to drive
traffic. But he was continuing to post announcements in Usenet
newsgroups for what he was calling his "free web auction." In these
early posts, Omidyar described the items on the site, lists that remain
one of the earliest records of what was for sale on AuctionWeb.
The items that showed up for auction in the first few weeks were a
strange mix of computer-related and noncomputer-related goods. In a
September 12 post on misc.forsale.noncomputer, Omidyar listed the
noncomputer items on the site, along with the current bids for each. It
was a small, eclectic assortment:
Antiques, Collectibles
Superman metal lunchbox, 1967, used good condition Current bid: $22.00
Autographed Marky Mark Underwear
Current bid: $400
Autographed Elizabeth Taylor Photo
Current bid: $200
Autographed Michael Jackson Poster
Current bid: $400
Toy Power Boat, late 50's-early 60's
Current bid: $60.00
Hubley #520 Cast Iron Hook and Ladder Truck
Current bid: $300.00
Collectors Multicolor Reflection Hologram
Current bid: $5000
Czech Vase
Current bid: $25.00
Cobalt Clear Cut Glass Rose Bowl
Current bid: $25.00
The list was not a representative sample—it was every noncomputer-related
item on the site. A week later, Omidyar updated the list, which had
grown from eighteen to thirty items, a 66 percent increase, in just
seven days. Among the new listings: a 35,000-squarefoot warehouse in
Caldwell, Idaho, for which the bidding started at $325,000. In early
October, Omidyar posted a notice on misc.forsale. pc-specific.misc that
listed the computer-related items. It was a larger, but less colorful,
lineup, which included hard drives, antivirus software, and a used Sun-1
workstation.
Throughout the fall, both listings and traffic on AuctionWeb
increased steadily. While Omidyar was putting up his newsgroup posts,
AuctionWeb was also starting to benefit from the marketing force that
would drive its growth for years to come: word-of-mouth publicity.
Computer geeks and tech-savvy bargain hunters were e-mailing one another
the AuctionWeb URL, and inserting hyperlinks on their websites that took
web surfers directly to the AuctionWeb home page. By the end of 1995,
AuctionWeb had hosted thousands of auctions, and attracted more than ten
thousand individual bids.
Omidyar was still offering AuctionWeb for free. He could do it
because his expenses were next to nothing-he was still running the site
off of Best, his home Internet service. Toward the end of 1995, however,
Best administrators were complaining that AuctionWeb was attracting so
much traffic that it was slowing down their system. In February 1996,
Best began charging him $250 a month, the rate for a commercial account,
ignoring his protests that AuctionWeb was not a business.
Best's fee hike changed everything. "That's when I said, 'You know,
this is kind of a fun hobby, but two hundred fifty dollars a month is a
lot of money,'" Omidyar says. To pay the bills, he started to charge
AuctionWeb users—"basically out of necessity," he says. Based on no
market research, Omidyar decided he would not charge buyers at all, and
that he would not charge sellers to list items. The only fees would be
what he called final-value fees, which would be a percentage of the
final sales price. The fees, he decided arbitrarily, would be 5 percent
of the sale price for items below $25, and 2.5 percent for items above
$25.
Omidyar had no way of knowing if users would be willing to pay to use
the site. In fact, it occurred to him that fees could bring his little
Internet experiment to an end. But Omidyar got his answer soon enough,
when piles of envelopes filled with cash and checks started arriving at
his front door. The amounts were not large, and the trappings were not
fancy. Some of the envelopes contained dimes and nickels Scotch-taped to
index cards. Still, when he added up the checks, the coins, and the
crumpled bills at the end of February, he found that AuctionWeb had
taken in more than $250-more, in other words, than Best was charging
him. That put his fledgling little website in a category almost by
itself: it was one of the very few Internet companies to be profitable
from its first month of operation.
In 1995, it was not clear that commerce would ever take hold on the
Internet. A study by the Pew Research Center that year found that just 8
percent of Americans felt comfortable using a credit card online. The
Pew study had no statistics on the percentage of Americans who would be
willing to participate in auctions with strangers on a website that
crashed almost daily, but it figured to be a lot smaller. If AuctionWeb
was to have any chance of taking hold, establishing trust and confidence
was essential.
Early on, Omidyar set out ethical guidelines for the AuctionWeb
community to follow. In his experience, he said, people are generally
good. He advised users to treat other people on the site the way they
themselves wanted to be treated, and when disputes arose, to give the
other person the benefit of the doubt. Omidyar's injunction was
essentially the golden rule transported into cyberspace. It was the
value system his mother had instilled in him, and one he tried to follow
in his own life. "Some people say, 'Isn't that trite, it's like a
Hallmark card,'" he says. "But I think those are just good basic values
to have in a crowded world."
To a remarkable extent, AuctionWeb operated according to Omidyar's
idealistic prescription. Trust on the site was so high in the early
days, and the feeling of community so strong, that it was common for
sellers to ship items even before they had received bidders' payments.
Still, the harmony Omidyar hoped for did not always preavail. When
buyers and sellers disagreed, they usually contacted Omidyar
directly—easily enough done, since his e-mail address, Pierre@eBay.com,
was prominently featured on the site. Omidyar got about a dozen e-mails
a day from users complaining about each other. It almost always turned
out, Omidyar says, that the dispute arose from a simple
misunderstanding. "On the Internet, people forget that when they're
dealing with an e-mail address there's an actual human being on the
other side," he says. "Often their fears are manifested, or they jump to
conclusions and think the most negative interpretations of that e-mail."
One thing Omidyar knew was that he did not want to arbitrate all
these disputes. He was busy enough just keeping AuctionWeb up and
running in addition to working at his day job. Moreover, true to his
libertarian leanings, he believed people should be able to resolve their
differences on their own. Omidyar's routine when he received an e-mail
with a complaint about another user was to respond to the author, send a
copy of the e-mail to the other person in the dispute, and tell them
both, "You guys work it out." The parties usually resolved the matter on
their own, but Omidyar realized he had to come up with a mechanism for
enforcing good behavior. Unlike most companies, AuctionWeb was not able
to control the quality of its service. "The brand experience" on
AuctionWeb, Omidyar observed, was "defined by how one customer treats
the other customer." If Omidyar wanted his customers to have a positive
experience on AuctionWeb, he had to convince them to treat each other
well.
In February 1996, Omidyar announced his proposal for how to do just
that: the Feedback Forum. "Most people are honest," he wrote in a
Founder's Letter posted on the site. However,
some people are dishonest. Or deceptive. This is true here, in
the newsgroups, in the classifieds, and right next door. It's a fact of
life. But here, those people can't hide. We'll drive them away. Protect
others from them. This grand hope depends on your active participation.
Become a registered user. Use our Feedback Forum. Give praise where it
is due; make complaints where appropriate. . . . Deal with others the
way you would have them deal with you.
Remember that you are usually dealing with individuals, just like
yourself. Subject to making mistakes. Well-meaning, but wrong on
occasion. That's just human.
Through the Feedback Forum, the complaints that landed in Omidyar's
e-mail in box would be brought out into the open. The entire community
would know about them and have an opportunity to deal with them
appropriately. Omidyar made clear from the outset that he wanted
positive comments as well as negative ones, both to encourage people to
say favorable things about one another, and because positive comments
could be just as revealing as negative ones. "I was afraid it might just
turn into a gripe forum," he says. "But as I watched it develop over the
weeks, I was amazed to realize that people actually enjoy giving praise,
too."
The rules of the Feedback Forum were straightforward. Users were
allowed to give each other a rating of plus one, minus one, or neutral,
and to include a written explanation if they wished. EBay's software
then tabulated each user's score and put the total in parentheses after
his or her name. The Feedback Forum played the same role on AuctionWeb
that reputation plays in a small town. Through the numbers that appeared
after users' names, the AuctionWeb community's opinion of them would
follow them wherever they went. The new system did not entirely remove
Omidyar from the role of enforcer. He decided that when users' Feedback
Forum ratings got too low-negative four or less-they would be banned
from the site. Omidyar arrived at the cutoff point of negative four
without much deliberation-it just struck him as the point at which his
assumption of goodness was sufficiently rebutted-and he did not reveal
it to users. But even years later it would remain the number that caused
eBay to "NARU" someone-to make him or her Not a Registered User.
Around the same time, Omidyar added another feature to the site: a
message board called, simply, the Bulletin Board. Like the Feedback
Forum, the Bulletin Board was designed to limit his role and place more
of AuctionWeb's administration in the hands of the community. Omidyar
did not have time to explain to each individual user how to write a
listing in HTML, or to give advice on bidding strategy. The Bulletin
Board was in the tradition of the Usenet newsgroups Omidyar had long
used, a place for people to gather, share information, and ask for help.
As soon as the Bulletin Board went up, the questions poured in. What
was the best way to ship? What should a seller do when a high bidder
disappeared? The answers came just as quickly. "If someone came on and
said, 'Please help me,' there were twenty-five people who would rush to
help," recalls Steven Phillips, a retired naval petty officer from
Dallas who sold chintz and pottery in the early days. A core group of
regulars emerged who functioned as a de facto customer-service
department. The site even had-in those innocent, spamless days—a
directory of e-mail addresses, making it easy for users to communicate
with message board regulars. Phillips alone got 100 to 150 e-mails a day
from his fellow AuctionWeb users, and he answered all of them.
With every day that passed, more cash- and check-filled envelopes
arrived at Omidyar's town house. In March, revenues hit $1,000, once
again more than the site's expenses. In April, revenues rose to $2,500,
and in May AuctionWeb took in $5,000. The envelopes were piling up so
fast that Omidyar literally did not have time to open them. He used some
of the funds to make his first part-time hire. Chris Agarpao, the
brother-in-law of a close friend, started coming to Omidyar's home twice
a week to open the envelopes and deposit the money. In June, when
revenues doubled for the fourth consecutive month, topping $10,000,
Omidyar decided it had become a real business. "I had a hobby that was
making me more money than my day job," he says. "So I decided it was
time to quit my day job."
Omidyar thought when he left General Magic he would be able to
reclaim his nights and weekends. But he found that all of his waking
hours were now being taken up by AuctionWeb—keeping it running, writing
code for new features, and answering user e-mail.
Having worked in start-ups, Omidyar knew that if AuctionWeb was going
to keep growing, he would need a strategy that went beyond bringing in
Agarpao to open envelopes and deposit checks. "I had a vague idea of
what I needed to do as an entrepreneur," Omidyar says. "But I knew I
wasn't going to be able to put together a business plan." He started
looking for someone who could.
Omidyar thought immediately of Jeff Skoll, a Stanford MBA he had met
through friends two years earlier. Skoll, a slightly built, hyperkinetic
Jewish Canadian, was a born entrepreneur. His father sold industrial
chemicals, and by age twelve Skoll himself was going door-to- door
selling Amway products in Montreal. Skoll's youth coincided with a
rising tide of separatism in Quebec, and he experienced the depth of
French-Canadian nationalist sentiment firsthand when he was making the
rounds selling electronic keyboards. He was often asked to demonstrate
them, but the only song he could play was "O Canada," the national
anthem. It went over well among the English-speakers, but not in
French-speaking areas. One woman, on hearing Skoll's musical
performance, sicced her dog on him. Not much later, Skoll's family
joined the growing English-speaking exodus from the province and settled
in Toronto, where he attended high school.
Skoll graduated from the University of Toronto in 1987 with an
electrical engineering degree and a 4.0 GPA. He then founded two
high-tech companies: Skoll Engineering, a consulting firm that helped
corporate and government clients set up inventory management and
accounting systems, and Micros on the Move Ltd., a computer rental
company. Skoll's ambitions, however, extended beyond the comfortable
life he was starting to carve out in Toronto. Six years after graduating
from college, he headed to Palo Alto, California, to enroll in the
Stanford Graduate School of Business. Skoll finished up his degree in
1995, at the same time Omidyar was wrestling with the idea for
AuctionWeb, and found himself just as drawn to the Internet as his
future partner. Skoll took his freshly minted MBA to Knight-Ridder
Information, Inc., a unit of the large newspaper chain, which hired him
to help direct its Internet strategy.
Skoll struck Omidyar as an "analytic powerhouse" whose skills would
complement his own. But the attraction, at least initially, was not
mutual. The previous Thanksgiving, when AuctionWeb was just a few months
old, Omidyar had tried to interest Skoll in joining the company, but it
had not gone well. "I told Jeff there were people buying and selling on
the Internet who never see each other but actually send money and stuff
back and forth," recalls Omidyar. "He said, 'That's ridiculous.' " Skoll
had just come back from the first meeting of CommerceNet, a nonprofit
symposium promoting commerce on the Internet. At the symposium, the
moderator had asked the crowd of three hundred how many of them had
bought or sold anything online, and only three people raised their
hands. It seemed to Skoll that if e-commerce had made so few inroads in
that tech-savvy audience, AuctionWeb was fighting a losing battle.
Since that Thanksgiving, however, Skoll had reconsidered. He could
see, from his vantage point at Knight-Ridder, that the Internet had the
potential to completely transform how goods were sold. One reason
Knight-Ridder had established Skoll's unit was that the newspaper giant
realized the Internet posed a significant threat to classi- fied ads,
one of its major sources of revenue. On the Internet, sellers could have
considerably more space to describe their items and post photographs
than they would in a print ad. The audience would not be limited to
readers of a single newspaper, or of any newspapers at all. Online ads
could be interactive, allowing buyers and sellers to contact each other
by e-mail. Not least, the Internet allowed for dynamic pricing, which
meant sellers did not need to choose a price in advance—they could
charge whatever the market would bear. These advantages were, of course,
all built into Omidyar's online auction model. Skoll eventually realized
that "what Pierre was doing was a lot bigger than just a simple
website." In February 1996, Skoll had agreed to do consulting work for
AuctionWeb. By August, the site was so successful that Skoll quit his
job and signed on full-time.
In Skoll, Omidyar found a yang to his yin. "It was the perfect
balance," says Omidyar. "I tended to think more intuitively, and he
could say, 'Okay, let's see how we can actually get that done.'" Skoll
was the hard-driving one, the one focused on business development and
fending off the competition. The more easygoing Omidyar tended the
website and nurtured the AuctionWeb community.
When Skoll reported for work, AuctionWeb was still operating out of
Omidyar's home. Skoll wanted to move the company to Palo Alto, which he
considered to be the "epicenter" of the Internet boom, or at least to
nearby Santa Clara. But the Silicon Valley real-estate market was so
tight AuctionWeb could not find office space in either city. While they
looked for offices, Omidyar and Skoll moved AuctionWeb's headquarters
from Omidyar's home to Skoll's, a group house in Los Altos Hills that he
shared with a few of his former business-school classmates. Skoll's home
had more room than Omidyar's, but it was still nothing like a real
office. One of Skoll's housemates worked at the NASA Ames Technology
Center, a NASAfunded high-tech incubator in Sunnyvale. He helped
AuctionWeb get temporary offices there, a one-room space that could
barely fit Omidyar, Skoll, and Agarpao. It was clearly not a long-term
solution.
Omidyar suggested expanding the search for permanent quarters to the
city of Campbell. A sprawl of suburban homes and office parks, Campbell
paid tribute to its long-lost agricultural heritage every May, when it
played host to California's largest prune festival. Campbell was not as
fashionable as Palo Alto, and it was certainly not the epicenter of the
boom. But what Campbell lacked in hipness and frenetic activity, it made
up for with more practical attributes. Rents were lower and, more
important, there might actually be some offices to be had. From
Omidyar's perspective, Campbell had another advantage: he lived there.
The real-estate agent that Omidyar and Skoll pointed toward Campbell
came back with a dentist's-office-sized suite on the second floor of
2005 Hamilton Avenue. The suite was located in the The Chinese book I
Ching teaches that the yin embodies elements of the yang, and vice
versa, and so it was with Omidyar and Skoll. Omidyar, the
antimaterialist, was already a millionaire, and would become the
wealthier of the two from his stake in eBay. Skoll, the corporate-minded
MBA, would later assume a very different role at eBay, that of in-house
champion of the community.
Greylands Business Park, a clump of low-rise brick buildings that
cried out "business" far more than "park." Greylands was directly across
the street from one sprawling shopping center, and diagonally across
from an even larger one. The prospective headquarters were as blandly
utilitarian as AuctionWeb's website, but they were a clear improvement
over the room in the NASA incubator. Omidyar and Skoll told the agent
they would take it.
There was just one problem. To evaluate AuctionWeb's financial
situation, the landlord wanted Omidyar and Skoll to fax over a balance
sheet. AuctionWeb did not have one, and it seemed unlikely the landlord
would be satisfied with what the company did have: Agarpao's extensive
list of cash deposits. Determined not to let the office space get away,
Skoll sat down and began taking inventory. "What are the servers worth?"
he asked Omidyar. They guessed about $5,000. Liabilities? They listed
that month's phone bill, which had not yet been paid. When he was done,
Skoll had a rudimentary balance sheet, which he faxed off. The landlord
was unpersuaded. Before AuctionWeb could move in, Omidyar, the only
partner who actually had some assets, had to personally guarantee the
lease.
Skoll's other priority, after office space, was professionalizing the
AuctionWeb site. Skoll argued that the San Francisco Tufts Alliance, the
biotech start-up, and Ebola Information-which were all still on eBay.com-were
distracting and, in the case of the Ebola page, more than a little
creepy. Omidyar, perhaps partly to tweak Skoll, put up a defense of the
Ebola page. McKinley's, an Internet search engine that rated websites,
had awarded Ebola Information four stars, he reminded Skoll, while it
gave AuctionWeb only three. It simply made no sense, Omidyar argued, to
remove the one page that could be driving the most traffic to eBay.com.
Skoll was not convinced. In the end, Omidyar gave in and reluctantly
removed everything but AuctionWeb from the eBay site.
In May 1996, Jim Griffith was sitting at a computer in an art studio
in West Rutland, Vermont, shopping for computer parts.
Griffith, who has the bushy white beard, rounded physique, and biting
wit of a mischievous St. Nicholas, had come to Vermont in a last-ditch
effort to pull his life back together. He was coming off two hard
decades of living in New York, where he had started out pounding the
sidewalks of the casting-call circuit, struggling to make it as an
actor. When his matinee dreams died, he threw his creative energy into a
career as a decorative artist, doing ornate painting in the homes of the
city's moneyed classes. His friend, Broadway director John Tillinger,
introduced Griffith around, and in time his paintbrush was rubbing up
against some of the toniest walls in Manhattan, including those of
Lauren Bacall's home in the Dakota apartment building.
After ten years of painting upscale apartments, Griffith burned out.
The combination of an especially disastrous work project and a head-on
collision with middle age pushed him over the edge. He and his partner
decided to get out of the city and start over in West Rutland. Griffith
had planned to paint murals there and send them to clients back in New
York, but he found it was too difficult to line up assignments from out
of state. He ended up working as an administrative assistant for the
Carving Studio, a nonprofit arts organization dedicated to teaching
stone carving.
Working on a clunky old computer, a gift to the studio from a local
bank, Griffith joined the information age. As his passion for art
redirected itself to computers, he found himself spending countless
hours on Usenet newsgroups. Griffith had been on an extended hunt for an
obscure type of memory chip when one of his newsgroup contacts e-mailed
him that the chip was up for auction at that moment on an online auction
site called AuctionWeb. Griffith went to the site and placed a bid. He
won it for $10, and he was hooked. Living in one of the most picturesque
towns in one of the most beautiful states in the union, Griffith spent
much of the summer of 1996 on AuctionWeb bidding on computer parts.
When he was not scrolling through computer listings, Griffith was
spending time on the Bulletin Board. He was by now fairly proficient at
using AuctionWeb and was happy to answer the technical questions that
were being posted. Griffith soon became a fixture on the boards: Uncle
Griff, a friendly source of advice for new users. One day, another board
poster asked him what he looked like. "I don't know what came over me,
but I said, 'I'm wearing a lovely flower print dress and I just got
through milking the cows,'" he says. "That's how it started about Uncle
Griff actually being a crossdressing bachelor dairy farmer who liked to
answer questions."
The legend of Uncle Griff grew quickly. On the Bulletin Board,
Griffith referred to his AuctionWeb persona in the third-person: Uncle
suggests you do this; Uncle would never do that. He also began to fill
in ever more elaborate pieces of Uncle Griff 's biography. Uncle Griff
lived with his mother, but she was not available to post. He had
duct-taped her mouth shut and stuffed her in a closet.
AuctionWeb lifted Griffith's spirits for a while, but by the fall he
was spiraling downward again. In mid-October he stayed in bed for two
weeks and thought about ending his life. Griffith forced himself to
begin therapy and started taking Prozac, a drug that he says "should be
in the water supply." Just as he was snapping out of his depression, he
got a phone call.
It was Jeff Skoll. He wanted to know why Uncle Griff had stopped
posting on the boards. Griffith was stunned that his absence had been
noticed at AuctionWeb headquarters. Skoll had an assignment for
Griffith. AuctionWeb was receiving fifty to one hundred e-mails a day
from users, and it had no customer-support staff. Skoll was prepared to
pay Griffith to answer the e-mails on a regular basis, and to keep up
his presence on the Bulletin Board. Griffith was up for it, but he
wanted to make sure Skoll knew what he was getting into. Uncle Griff
was, Griffith pointed out, an unusual persona. "Yeah, we love it," Skoll
responded.
Griffith became AuctionWeb's second part-time employee, at a salary
of $100 a month, and its first official customer-support person. Skoll
asked Griffith to select an alias to use as his AuctionWeb identity.
That way, he could keep being Uncle Griff on the Bulletin Board without
having his postings carry over to his official duties. When Skoll
called, Griffith was looking through a book about one of his favorite
movies, Greed, an eight-hour-long silent film directed by Erich von
Stroheim. He came across a photograph of the actress Dale Fuller, who
played the mad Mexican housekeeper. For his official AuctionWeb work,
Griffith told Skoll, he wanted to be known as Dale.
Griffith returned to AuctionWeb with his two identities, Uncle Griff
on the boards, and Dale@eBay.com to answer customersupport e-mail.
Bulletin Board posters who knew both personas did not make the
connection, and Griffith never let on. To help with the e-mail, Skoll
sent Dale a Word document, much of it prepared by Omidyar, with
suggested responses to frequently asked questions. In addition to
handing out advice, Griffith spent a lot of time doing what Omidyar
hated: stepping in and trying to resolve disputes. Griffith was amazed
by how heated the controversies could get, and how seriously the
participants took their online lives. He often got email from posters
saying that because of disputes on the Bulletin Board they had cried all
night, sometimes all week.
To the noncombatants, the disagreements generally seemed wildly
overblown. At one point, Uncle Griff had to step in to defuse an
argument between a buyer and a seller of baseball cards that had started
in private e-mail and moved onto the Bulletin Board. The fighting
escalated until both men were on the boards every night, "screaming" at
each other in capital letters. Griffith tried to persuade posters that
hostility was counterproductive. "If you've got a bidder who is not
honoring their bid, the last thing you should do is send them a nasty
e-mail telling them they're a terrible person," he advised. "It may make
you feel better for the moment, but in the end it doesn't serve any
purpose at all."
When all else failed, Uncle Griff used his offbeat personality to
defuse tension. Once, when a flame war was raging between two users, he
cut in and announced that he had just been in his attic and had found a
trunk that had not been opened for years. It contained a lot of his
mother's old clothing, and he asked everyone to try an item on. Uncle
Griff offered one board poster a feather boa, another an elaborate hat,
and he declared that he himself was putting on a pair of high heels. He
made a point of handing off virtual clothing to both of the posters
involved in the fight. "Some people would respond, 'Oh, Griff, you're so
silly,' " he says. "But what it did was break up the dispute without
referring directly to the dispute."
Not long after Griffith got his call from Skoll in Vermont, Patti
Ruby got one of her own in Indiana. Ruby owned an Indianapolis antique
store with her husband and worked on the side as a computer programmer.
Like Griffith, she had come to AuctionWeb early, and had become a
personality on the Bulletin Board. Aunt Patti, as Ruby called herself,
was knowledgeable about computers and antiques, and willing to take the
time to answer users' questions about either. Ruby became eBay's second
"remote," as its employees outside of Silicon Valley came to be known.
She started out part-time, but within two weeks of Skoll's call she quit
her programming job and began working for AuctionWeb full-time. Skoll
asked Ruby, as he had asked Griffith, to choose an AuctionWeb identity.
She became Louise@eBay.com and remained Aunt Patti on the boards, both
personas that would become famous in AuctionWeb's early days.
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