We love to argue about who's the best. Mickey Mantle or Willie Mays? Bach or Mozart? In today's dot-com world the question is: "Who's best, eBay or Amazon?"
Today both companies are among the successful dot-coms to survive the bursting of the Great Net Bubble. Over the past decade venture capitalists suspended their own rules of engagement and a great deal of their common sense and dumped over $100 billion into Net and high tech start-ups. A third have disappeared without a trace. Others are limping along.
Both eBay and Amazon are getting pretty good press these days. No less a media powerhouse than Fortune has said that Amazon CEO Jeff Bezos "is steadily proving himself to be one of the great CEOs of his generation." And eBay has been called "The Perfect Store".
It's been a long, hard road for both companies. But it's been a different road for each of them and a journey that they each started in a very different way.
What is today eBay started out in 1995 when Pierre Omidyar created something he called AuctionWeb. He didn't start out with a fancy business plan. Instead, AuctionWeb was the result of two things.
Omidyar wanted to explore the Web a bit to see how it might be used for business. Probably more important, his girlfriend, Pam, wanted to find a way to trade Pez dispensers beyond the local area. What later became a successful business started out as a hobby. That's very different from how Amazon got started.
Amazon's founder, Jeff Bezos was a senior vice president at the D. E. Shaw Hedge Fund. In 1994 he read a study that predicted the Internet would explode in popularity. He figured there was money to be made there. So he set about doing some research.
He started by searching for the ideal product to sell online. Books turned out to be the choice. Bezos figured that books were essentially a commodity; they were the same no matter where you bought them. He also noticed that while books were already cataloged electronically, there was no bookstore on the planet big enough to hold even one copy of every book in print.
Where eBay started by accident, Amazon was planned from the start. Bezos chose Seattle as a headquarters location because there was a huge pool of programming talent available and because it was also close to Roseburg, Oregon, home to the largest book distribution warehouse in the country.
At eBay, Omidyar was inspired by the initial success he had. He set out to create eBay as a giant, efficient market for just about everything. He wasn't sure how that would all happen. He took things one step at a time. Or maybe we should say, "one suggestion at a time".
During the day Pierre would answer emails from the folks who used eBay. At night he'd spend his time programming, changing the way eBay worked according to the ideas and suggestions he'd picked up from users during the day. One of the best of those was the Feedback Forum, the way eBay users trade information about buyers and sellers.
Amazon and eBay's different beginnings illustrate different ways that a business can achieve success. eBay started out based on a passion and curiosity and was infused with the philosophy of the founder.
Amazon started out as nothing but a search for the best possible Net business. If Jeff Bezos' research had discovered that peanut butter sandwiches were the perfect online product, that's what his business would have sold.
Both companies paid attention to costs. Omidyar did the programming for eBay while he developed the business. Bezos helped ship the books that his first customers ordered.
The two companies have pretty much grown and developed the way they began. At eBay they're obsessed with listening to their customers and responding.
Some of that happens through the process of observation. Just about every new category of merchandise got started because buyers and sellers were starting to do things that eBay hadn't thought of yet. That's how a thriving business in used cars got started.
Back in 1999 one of eBay's business development people was searching the site for toy models of Ferraris. He found those, but he also found two real Ferraris for sale.
That led to a check of the whole site. Guess what? There were over two hundred vehicles for sale. Cars looked promising as a category. So eBay created a category for them and acquired Kruse International, a company that ran car shows. Growth came from the practice of observing buyer and seller behavior and then acting on possible growth ideas.
At Amazon, the business is pretty much data-driven. Bezos loves analysis. He says "With most decisions, you can do the math and figure out the right answer, and math-based decisions always trump opinion and judgment."
Whatever the decision, Jeff Bezos has the final say. Many of the good ideas at Amazon result from his initiative. One-Click ordering is a good example.
It was an idea the Bezos thought had merit so he gave it to the programmers. Normally when the boss does this, the boss gets what he or she wants. Not this time.
The first time Bezos tried a one-click order he got one of those "Are you sure?" confirmation boxes on his screen. But he rode herd on the programmers and the project until he got what he wanted.
As the two companies continue to grow and develop, they each remain true to their roots. Each has developed a set of behaviors and practices that works for them.
Pierre Omidyar isn't involved in the day-to-day operations of eBay anymore. He and Pam are married now and they have enough money from eBay to corner the market in Pez dispensers. But they devote their time to philanthropy and their private foundation.
They can do that because in 1998 Omidyar brought in Meg Whitman to run eBay. She's done a great job, mostly by maintaining the basic values that Omidyar had back at the beginning and mating them to solid business practice with an emphasis on execution.
Listening to customers is at the core. In 1999, Whitman started the Voice of the Customer groups that bring small groups of sellers and buyers into San Jose to tell the company about the issues that matter most to them. She sees her key challenge as maintaining the feel of eBay as it gets larger and larger and deals with more and more big companies.
Over at Amazon, the company seems less like a normal corporation than like a publicly traded proprietorship owned by Jeff Bezos. He's involved with just about everything and he shows no signs of leaving any time soon. That's dangerous for Amazon in the long term because it's very hard to keep good people in the top positions when they know that the CEO is probably going to be there for many, many more years.
At eBay the challenge of the future will be to continue to grow while maintaining the company's core values. At Amazon it will probably be surviving the first time that Jeff Bezos has a lousy idea that he won't let go of.
So which of these companies is best? I really don't think it matters much. That's great for an evening of friendly discussion, but figuring out which company is the best isn't as important as learning from both of these excellent companies.
You can learn from eBay about how to listen to your customer community and let them lead you into profitable areas. You can learn from Bezos and Amazon about how to plan and research and base decisions on data.
You can learn from both about successful business in the Digital Age. You can learn that technology and the Net create great new opportunities that you can seize.
And you can learn timeless lessons about successful businesses. You can learn that successful businesses have clear visions, core values, cost control and plenty of attention to the details of execution. You can learn from both Amazon and eBay that successful businesses are realistic and results-oriented.
Perhaps more than anything, that's the message here. Great businesses in any age are a combination of all these ...and a little bit of luck.
