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TOP 500 REZENSENTam 8. September 2007
"To lead the people, walk behind them." -- Sun Tzu

This quote ends the book, and nicely summarizes the important lessons about eBay's business and leadership model.

The strength of this book is in pointing out the qualities of eBay's initial business model that have led to the company's success. The weaknesses lie in giving you lots of details about the company's operations that users of eBay's services already know very well. You can skip these details unless you have never used eBay. eBay executives did not make themselves available for interviews, so don't look for any startling insider stories here either.

At a time when dot coms are crashing like avalanches during a spring thaw in the Alps, it is worthwhile beginning to separate out what differentiates the winners from the losers. In 9 cases out of 10, the key differences will be in business models rather than in execution. The internet is primarily a way to exchange information. Those who organized around doing that function supremely well will prosper. Those who tried to provide a lot of other services often will not, both because there is no money in it and because it makes the contact point less valuable.

Basically, eBay "eliminated many of the inefficiencies of traditional person-to-person commerce." You could only deal with people you could easily find. You did not know if you could trust them or not. Exchanging information was time consuming and frustrating. With eBay, the situation is much improved. As a result, collectors can scratch their itch for unusual goods more easily. People with overstuffed attics can profitably empty them out with an eBay yard sale. Small retailers can move rare items by expanding the geographic market they can serve. That's simply good for everyone. Since everyone wants to be in the biggest auction, eBay was right to let anyone auction almost anything to attract the bulk of the market.

Although the book does not discuss complexity science, its conclusions are in line with that subject. As the authors point out, key earlier decisions were "(1) to let everybody sell anything, and (2) to take a hands-off approach to user transactions." There is a great temptation to try to regulate something, but that is the royal road to ruin.

The authors point out that community is eBay's main asset, and that this community is "fun" for its participants. If you are like me, you have found that so many internet communities quickly become a pain, instead! Can you think of any you would rather not belong to? I certainly can. But it's hard to get rid of them in many cases.

I liked the comparison the authors made that eBay has the scaling opportunity of Amazon with margins like Yahoo. The discussion of how outsourcing made and makes this possible was a good one. You will enjoy the discussion of the decision to insource customer service as a way to better understand customer needs. That was clearly the right choice.

The book is basically also quite honest. It is a major pain to put images up on eBay, and the book points that out. It also suggests some vendors who can make that chore easier for you.

Since eBay is still quite a young company, the authors leave you with many scenarios for what might come next for eBay. I thought that was a useful approach to take, as well as quite interesting.

The key lessons for any company planning to be in the people-to-people contact business are:

Have as your mission to be the largest in the world.

Emphasize as your strategy to (1) expand your user base, (2) strengthen your brand, (3) broaden your content platform to match user's needs, (4) foster the most community affinity, and (5) enhance site features and functionality ahead of competitors.

Although this book is about eBay, you can get a lot of benefit from thinking about it as a lesson for your company's business model, as well.

Where else can you be a better leader by applying this model?
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