In the mid 90's, Pierre Omidyar decided that he wanted a job that would let him do "Internet things". Many people at that time were making the same decision, because they knew that the Internet was going to be important. What makes Omidyar exceptional, though, is that his "Internet thing" ended up being the greatest success story yet of the Internet, eBay.
Adam Cohen's book, "The Perfect Store", tells the story of how Omidyar took eBay from its humble beginnings as Auctionweb and turned it into a multi-billion dollar corporation. It's part business guide and part insider history.
What makes it an enjoyable read, though, is the way that it tells the story of eBay through the individual stories of people that built eBay, along with a cast of colorful early users. Cohen had complete cooperation from eBay for his book, allowing him inside access to the people and history of eBay. This access allowed him to paint a vivid picture of the people and events that shaped the company.
Omidyar built Auctionweb because he wanted to create a site that would be like the perfect economies that are discussed in beginning economics classes. He thought that the Internet would be a useful tool for building a community where items could be bought and sold. The Internet made it possible to have a world of buyers, so sellers could get the best price possible. It also made it possible to have a world of sellers, reducing the likelihood of artificial scarcity because of things like geography.
The details of this story are improbable and fascinating. The first item put up for sale on Auctionweb was a broken laser pointer. Stranger still, the broken pointer sold for 14 dollars!
One man's trash is another man's treasure
"The Perfect Store" tells many quirky stories of early users. One user, John Freyer, gained fame for selling all his worldly belongings on eBay. Freyer was a student at the University of Iowa, and he decided to use eBay to create a type of performance art project. He did this to downsize his life, but also to explore the way we own things and how they also, in a way, own us.
Freyer catalogued and sold nearly everything he owned, including old tennis shoes, kitchen canisters, old National Geographics, old records, and much more. He created a web site to document his project, AllMyLifeForSale. Here he documented the items sold and published dozens of letters that he received from people that bought his items. These are fascinating, because they make apparent the axiom that "one person's trash is another person's treasure."
The book also talks about unusual listings that pushed the boundaries of what was acceptable on eBay. This included listings for body parts, used clothing that appealed to prurient interests, firearms and items related to controversial news stories. The decisions eBay made on these listings, and the way the decisions were made, played a large part in shaping the success of the company.
More than a light read
"The Perfect Store" is more than just a collection of interesting stories. It's also a great book on electronic commerce. Unlike many books about ecommerce, though, it's interesting, well-written, and actually delivers some important business lessons.
One of the reasons for eBay's success was Omidyar's approach to finances. Instead of spending money freely, like so many dot-com executives, Omidyar was frugal. eBay went out of its way to spend money cautiously. The company's offices were modest. Employees even had to assemble their own desks on their first day.
Another reason for eBay's success was the way Omidyar has used online communities to handle many tasks that most companies handle with customer service centers. eBay encouraged users to help answer each other's questions through forums. This proved to be quicker and less expensive than traditional customer support. The company's feedback system allowed users to police the site themselves. Dishonest sellers quickly got poor feedback, allowing buyers to know if they were dealing with legitimate sellers or not.
Finally, the book shows how important the idea of community can be for web companies. Most of these major decisions eBay faced were made with an unusual amount of input from eBay users. eBay's online nature made it easy to solicit feedback on an ongoing basis, even about issues that might seem trivial. On the other hand, many of eBay's missteps have been at times when the company made decisions without user input, or counter to users' interests.
The perfect book?
While Cohen's book is a fun read, it's not without flaws. Cohen worked very closely with eBay in writing the book, and sometimes his exclusive access colors his viewpoint. Almost everyone in the book is portrayed favorably, though it's clear that eBay succeeded in spite of many of its leaders limitations. Also, Cohen occasionally uses many stories to drive home his point, when only a few are necessary.
Overall, though, "The Perfect Store" is a perfect read. It tells the story of one of the most innovative ebusinesses, teaches some valuable lessons about online commerce, and is a fascinating book.