February 5, 2013
rosemary published this at 2:24 pm
By Robert Cordray
From a Living Room to Fortune 500: What We Can Learn From the Creation of eBay
When Pierre Omidyar first created eBay, it was nothing more than an idea. An idea soon turned into a code worked out in the living room of his house. It soon became one of the most successful businesses in the world, and today Omidyar is worth an estimated $8.2 billion (via forbes.com). It takes something special to turn nothing into that kind of money. And most people will never generate a business of that global magnitude. However, every online business has to start somewhere, and we can learn a lot from the development of eBay from a small website to a massive worldwide company.
Just an Idea, a Code, and a Broken Laser Pointer
In 1995, Omidyar decided to sell a broken laser pointer online. He wrote the code in his living room, and placed it on the same server as his page about the ebola virus. When he received a bid for it, the buyer told him that he was a collector of laser pointers. This was enough to get the wheels turning in Omidyar’s head, as he realized he might be onto something. He soon devoted an entire domain to his new site, and titled it AuctionWeb (via about.com).
Key Point 1: You Need A (Good) Idea. Test the Waters First.
More Than an Idea
Next, Omidyar needed to help this site take off. To do so he offered the service for free, allowing anyone to buy and sell whatever they wanted without a service charge. By this point it had become eBay, and was on its way to becoming the site that we know today. One thing that helped market eBay was an imagined story of its origins. The word spread that Omidyar created the site to find a Pez dispenser for his wife. The media picked up this story and no one seemed to care that it was revealed to be nothing but a clever marketing technique.
Key Point 2: Do Whatever You Can to Get it Going
Turning a Website into a Business
After a short amount of time, Pierre Omidyar decided to start charging a small percentage of each sale. It was a risky move, but one that paid off, and the profit allowed him to grow his site even more. He quit his job and focused on eBay full time. Eventually he was able to hire his first employee. A website that started as a hobby was now a promising startup.
Key Point 3: Once You Are Established, it is Time to Start Making Some Money
Eventually the site began to attract investors, and the money they gave was just what eBay needed to grow into a force in the business world. The company went public in 1998, taking the stock exchange by storm. eBay was able to expand and sell all items, and eventually go global. Since then they have never looked back.
Key Point 4: When the Timing is Right, Don’t Be Afraid to Grow
Are you the next Pierre Omidyar?