Speaker 1: Get in touch with technology with tech Stuff from how
Speaker 1: Stuff Works dot com. Hey there, and welcome to tech Stuff.
Speaker 1: I'm your host, Jonathan Strickland. I'm an executive producer at
Speaker 1: how Stuff Works and I love all things tech and
Speaker 1: today's episode comes to us the courtesy of a request
Speaker 1: from a listener. Neil asked me to cover this, and
Speaker 1: to start off, I want to just talk about a
Speaker 1: certain myth. There's a legend in Silicon Valley that eBay,
Speaker 1: the auction website that was one of the notable survivors
Speaker 1: after the dot com crash, was founded because of Pez dispensers.
Speaker 1: The legend is a pretty charming one, and it tells
Speaker 1: the story about Pierre A Midier. He's the son of
Speaker 1: Iranians who had moved to France to pursue higher education,
Speaker 1: and Pierre's fiance, Pamela, was a fan of Pez dispensers,
Speaker 1: those little plastic candy dispensing toys that frequently take the
Speaker 1: form of licensed characters like Mickey Mouse or Batman or
Speaker 1: hundreds of others. Pam was having trouble finding fellow enthusiasts
Speaker 1: in the San Francisco area. She had previously lived in
Speaker 1: the Boston area, and she knew a lot of other
Speaker 1: collectors over on the East coast, and so Pierre designed
Speaker 1: a website meant to allow people to post items they
Speaker 1: wished to sell and auction them off to the highest bidder.
Speaker 1: Which is a cute story, but it's not true. It
Speaker 1: was actually all a pr thing that was made up
Speaker 1: to kind of give eBay this sort of charming history.
Speaker 1: So today we are going to explore the full story
Speaker 1: behind eBay, how it came to be, and how it
Speaker 1: survived when so many other websites failed. Our story does
Speaker 1: begin with Pierre omidi Are, the man who would build
Speaker 1: the first incarnation of eBay. He was born in Paris, France,
Speaker 1: in nineteen sixty seven, and when he was six years old,
Speaker 1: his family immigrated to the United States. They moved to
Speaker 1: the Baltimore area, and Pierre's father took up a urology
Speaker 1: residency at Johns Hopkins University. In school, Pierre was known
Speaker 1: to kind of sneak off during gym class in order
Speaker 1: to use the teacher's TRS e D home computer. This
Speaker 1: was an old Tandy radio shack computer, thus the TRS name,
Speaker 1: though it had a rather unfortunate nickname, not just at
Speaker 1: Pierre's school, but worldwide it was sometimes kind of affectionately
Speaker 1: referred to as the Trash eight. Pierre told himself how
Speaker 1: to program in Basic as the basic programming language. He
Speaker 1: was fascinated with computers and with programming in general in
Speaker 1: middle school. He lived for a short while in Hawaii
Speaker 1: and then returned back to the East Coast. When he
Speaker 1: returned to Washington, d c. For high school, he began
Speaker 1: working on Apple two computers and he learned to program
Speaker 1: in Pascal, which was a big step up from Basic.
Speaker 1: He even lay ended a gig at his high school
Speaker 1: computerizing the card catalog for the library. And he graduated
Speaker 1: high school and enrolled in Tufts University, which is outside
Speaker 1: of Boston, and he majored in computer science and that's
Speaker 1: where he met his future wife, Pamela, who was studying biology.
Speaker 1: Pierre was a devotee of Apple, and he eschewed the
Speaker 1: IBM compatible PCs that were beginning to dominate computer labs,
Speaker 1: so he didn't really have any desire to go into
Speaker 1: the computer lab, even though his major was computer science. Instead,
Speaker 1: he preferred to work on a Macintosh computer and he
Speaker 1: created a programming utility as an exercise in his junior year,
Speaker 1: he began looking for a potential job as a Mac programmer,
Speaker 1: and he applied to a company called Innovative Data Design,
Speaker 1: which offered him an internship based off his application and
Speaker 1: the Mac utility he had created. That led to a
Speaker 1: full time position, and Pierre took a semester off to
Speaker 1: get more experience in the programing world. So he leaves
Speaker 1: school for a short while and works for a semester
Speaker 1: in the private sector. He returned to Tufts for another semester,
Speaker 1: but then transferred to the University of California, Berkeley to
Speaker 1: finish out his undergraduate degree, and he moved out West Pamela.
Speaker 1: His girlfriend, slash fiance, continued her studies at the University
Speaker 1: of California, Santa Cruz. She had already earned a bachelor's
Speaker 1: degree in biology and now was studying plant molecular genetics.
Speaker 1: Smart Lady Pierre then went to work for a company
Speaker 1: called Clariss. Interesting little side note, Claris was a subsidiary
Speaker 1: of Apple, so I covered this a little bit in
Speaker 1: the Apple story about how the company was trying to
Speaker 1: deal with software for its Macintosh line. It had formed
Speaker 1: Claris in nineteen seven when Apple needed to devote resources
Speaker 1: to creating updates to aging software packages like Mac draw
Speaker 1: and Mac Project. Pierre was a Mac programmer working for
Speaker 1: Apple sort of by way of a subsidiary, and there
Speaker 1: was a sweet deal that was on the horizon. Claris
Speaker 1: was poised to spin off from Apple and hold its
Speaker 1: own initial public offering or i p O. Employees who
Speaker 1: had a stake in the company would end up making
Speaker 1: a lot of money if the i p O went well.
Speaker 1: So things were looking up, and this is generally how
Speaker 1: initial public offerings go. You normally have employees who have
Speaker 1: some sort of ownership in the company, and when it
Speaker 1: goes public, they end up getting a reward of stock
Speaker 1: in the company. And if the i p O goes
Speaker 1: really well, then the stock's value increases, and thus you
Speaker 1: can end up becoming wealthy overnight. But then in Apple
Speaker 1: decided it was not going to spin off Claris after all,
Speaker 1: and the company would remain a subsidiary under Apple. That
Speaker 1: decision prompted the company president, that is, Clariss's company president,
Speaker 1: to leave Claris, and that initiated something of an exodus
Speaker 1: of employees throughout ninety ninety one, including Pierre. He decided
Speaker 1: he was going to leave the company and try something new.
Speaker 1: So the year was nine and Pierre was partnered with
Speaker 1: some friends to launch their own business. They decided they
Speaker 1: were going to try and create their own company, and
Speaker 1: this one was called Ink Development Corporation. This company specialized
Speaker 1: in programming software for pen based computers, that is, light
Speaker 1: pens as an input device, and specifically they were developing
Speaker 1: for the PenPoint operating system from a company called Go Corporation. Now,
Speaker 1: at the time, Pierre was banking on the pen input
Speaker 1: system to become the next big thing in computing. For
Speaker 1: one thing, using a pen is at least seen as
Speaker 1: being far more intuitive than using a keyboard, same sort
Speaker 1: of thing as touch interfaces with screen based designs like
Speaker 1: like tablets and smartphones. That was the reasoning anyway, But
Speaker 1: it turned out the team was way ahead of their
Speaker 1: time on this bet and it just never really took off.
Speaker 1: But fortunately they had not put all of their eggs
Speaker 1: in the pen computer basket. They had also started to
Speaker 1: develop software for the burgeoning online market in ninety three,
Speaker 1: when it became pretty clear the pen based computing thing
Speaker 1: wasn't going anywhere. The Internet was starting to get a
Speaker 1: lot of buzz and the team rebranded their company and
Speaker 1: called it E Shop lower case E big S. One
Speaker 1: thing that was interesting about the shop was that it
Speaker 1: was not directly connected to the Internet. You would not
Speaker 1: log onto the Internet and then use something like Google
Speaker 1: or some other web search program to go over to
Speaker 1: the shop and then peruse the virtual aisles. It was
Speaker 1: a network, but one that you would have to access
Speaker 1: directly through a Windows application that dialed out through CompuServe
Speaker 1: and Sprint network links. So in other words, instead of
Speaker 1: going to the Internet, you were essentially dialing directly into
Speaker 1: this service. That made it closer to something like a
Speaker 1: bulletin board system from back in the day. Multiple users
Speaker 1: could be on at a single time, but only through
Speaker 1: that direct connection, so it was not yet an Internet shop.
Speaker 1: Pierre figured that the Internet was really the future. He figured,
Speaker 1: this is really where things are gonna go, and he
Speaker 1: was a little frustrated with how reluctant his partners were
Speaker 1: to bring a shop fully online, and so he left
Speaker 1: the company in nineteen but he still held on to
Speaker 1: a stake in the company. He still had some ownership,
Speaker 1: which ended up being a really good decision for him
Speaker 1: because in nineteen ninety six, which was a year after
Speaker 1: eBay would launch. I'm just skipping ahead for a second here,
Speaker 1: Microsoft would acquire e Shop, and that acquisition was done
Speaker 1: in part through stocks, meaning Microsoft would grant stocks to
Speaker 1: people who shared ownership in the shop and they would
Speaker 1: get a certain number of Microsoft shares. That turned Pierre
Speaker 1: into a millionaire overnight. He had the free him to
Speaker 1: work on whatever he liked at that point, and of
Speaker 1: course by then eBay was already a thing. I thought
Speaker 1: it wasn't called that yet anyway. The other thing he
Speaker 1: ended up working on after he left the shop was
Speaker 1: a company called General Magic that was founded by Bill Atkinson,
Speaker 1: Andy Hurtzfeld, and Mark Poor at Now, Hurtzfeld and Atkinson
Speaker 1: were two of the members of the original Macintosh team.
Speaker 1: They actually designed the original Macintosh, and Pierre was gonna
Speaker 1: get to go work for the men who designed the
Speaker 1: computer he had grown to love so much and the
Speaker 1: one that he had cut his teeth on when he
Speaker 1: was really getting serious about programming, so he was pretty
Speaker 1: excited about it. General Magic was developing small handheld computing devices.
Speaker 1: There were sort of a predecessor to personal digital assistants
Speaker 1: or p d a s. If you remember those and
Speaker 1: PDAs in turn were sort of the predecessors for smartphones.
Speaker 1: Pierre's job was to kind of act as a liaison
Speaker 1: between General Magic and third party programmers, so he was
Speaker 1: kind of helping third party programmers who wanted to build
Speaker 1: software for this platform. The platform was called Magic Cap
Speaker 1: and the company had created this in an effort to
Speaker 1: get more software developed for the technology in general. So
Speaker 1: in other words, you had Pierre standing there as kind
Speaker 1: of an aid, someone who could give expertise to people
Speaker 1: who wanted to develop software for this brand new platform,
Speaker 1: and uh, he was deriving a lot of pleasure out
Speaker 1: of that. In his spare time, he was brainstorming ways
Speaker 1: to leverage the Internet. And by the mid nineties, everyone
Speaker 1: was pretty sure the Internet was going to change everything,
Speaker 1: but no one had really cracked how that was going
Speaker 1: to happen yet. It was still an early adoption period
Speaker 1: for the Internet and e commerce hadn't quite taken off yet.
Speaker 1: And this is when the story of Pamela and the
Speaker 1: Pez dispensers would come into play. When it was when
Speaker 1: it was presented as eBay's actual past. But while that
Speaker 1: could have potentially played a part in Pierre's brainstorming if
Speaker 1: it had been true, the actual truth of the matter
Speaker 1: was way more complicated and messy, and I'll explain how
Speaker 1: in just a second, but first let's take a quick
Speaker 1: break to thank our sponsor. So Pierre O Mindiar, who
Speaker 1: had recently left the shop and now was working for
Speaker 1: General Magic, would occasionally take on consulting or freelance work.
Speaker 1: So he created a sole proprietorship business and he called
Speaker 1: it Echo Bay Technology Group because he thought the name
Speaker 1: sounded cool. He didn't actually live anywhere near any place
Speaker 1: called echo Bay. He tried to register the domain echo
Speaker 1: bay dot com but discovered that it was already taken
Speaker 1: so he couldn't have it. So he decided to register
Speaker 1: eBay dot com instead, as that was readily available. And
Speaker 1: this was an early nine there was no market place
Speaker 1: on the site just yet. There was no eBay auction site,
Speaker 1: so the name actually came before the business. At the time,
Speaker 1: eBay dot com was sort of a catch all site
Speaker 1: containing a midier's interests. He had information about his consulting
Speaker 1: gigs on there, so you could hire him based off
Speaker 1: that site, but he also had a section about the
Speaker 1: Ebola virus. It was an information page about Ebola that
Speaker 1: had links to news items. The website contained pages dedicated
Speaker 1: to a biotech company that employed his fiancee, Pamela, and
Speaker 1: he also had a page dedicated to the Alumni Association
Speaker 1: of Tufts University because Pamela was president of that association. So,
Speaker 1: in other words, eBay dot com was sort of a
Speaker 1: hodgepodge of web pages, and really only Pierre and his
Speaker 1: fiance were the common connectors among all the different pages.
Speaker 1: It was actually really reminiscent of a lot of early websites.
Speaker 1: If you were online during the early days of the web,
Speaker 1: you would frequently encounter early websites created by people that
Speaker 1: had a web page devoted to each of their interests,
Speaker 1: and there'd be no real common thread between the interests
Speaker 1: except for the fact that one person had all of them.
Speaker 1: That happened a lot in the early days, and eBay
Speaker 1: dot Com started out that way. Pierre had also been
Speaker 1: thinking a lot about free markets because a few years
Speaker 1: earlier he had decided to invest in the company three
Speaker 1: d O that was a video game console company. I've
Speaker 1: talked about three d O in the past. It was
Speaker 1: one of those consoles that launched. It made a big impact,
Speaker 1: and it was incredibly expensive, and it didn't stick around
Speaker 1: for very long, but it still was pretty interesting and
Speaker 1: Pierre was really kind of fascinated by it, so he
Speaker 1: ended up investing in it back in a mediator put
Speaker 1: in an order to buy stock with his brokerage firm.
Speaker 1: The opening price went three DEO was holding its initial
Speaker 1: public offering was supposed to be fifteen dollars per share,
Speaker 1: but by the time omitt Year's order was processed, the
Speaker 1: stock price had already gone up by fift so he
Speaker 1: was buying it at a more expensive price than he
Speaker 1: had originally intended. Now he was still able to sell
Speaker 1: his stock off at a profit anyway. Later on, but
Speaker 1: it got into thinking how was this fair? Because privileged
Speaker 1: buyers were able to get hold of shares at the
Speaker 1: fifteen dollar price point well before they would become available
Speaker 1: to the general public. You had organizations that could buy
Speaker 1: stock before the I p O officially launched, and he
Speaker 1: felt like this was really unfair. When the public finally
Speaker 1: gets a chance to buy stock, the price would have
Speaker 1: already grown, which means they would see smaller profits than
Speaker 1: the big wigs who were able to get in early
Speaker 1: because they had really good connections. So Pierre started to
Speaker 1: think about auctions and how they operate. He had not
Speaker 1: real the attended auctions, but he liked the concept behind them,
Speaker 1: because at an auction, the potential buyers decide what they
Speaker 1: are willing to spend on any given item or service.
Speaker 1: If someone else wants that item or service more, they
Speaker 1: will pay more, assuming they have the funds to do so.
Speaker 1: So if a seller sets an opening bid price that's
Speaker 1: at too high a level, no one's going to bid.
Speaker 1: So it's a free market approach that felt fair to Pierre.
Speaker 1: You could place your bid, and if you got outbid,
Speaker 1: you could decide if it was worth increasing your bid
Speaker 1: again to stay in the auctions. No one would be
Speaker 1: able to beat out anyone else just because of their connections. Really,
Speaker 1: if someone has deeper pockets and a real desire to
Speaker 1: own something, they could outbid everybody else, But you know
Speaker 1: you and usually way how much is the thing worth
Speaker 1: versus how much am I willing to pay for it?
Speaker 1: He got to work coding in an effort to build
Speaker 1: out a website that would allow people to post items
Speaker 1: for sale and support an auction environment, and he worked
Speaker 1: all over the labor day, weekend and on Labor Day itself.
Speaker 1: In he launched it under his eBay dot Com site,
Speaker 1: but it was not called eBay dot com itself. It
Speaker 1: was called auction Web, so it was one site under
Speaker 1: eBay dot com. I believe it was eBay dot com
Speaker 1: slash a w if you wanted to go there directly
Speaker 1: upon its launch. It was a bare bones service. It
Speaker 1: was mostly blue text against a gray background. There are
Speaker 1: only three things you could do on the site. You
Speaker 1: could list a new item for sale, you could view
Speaker 1: the items that were available, and you could place a
Speaker 1: bid on an item. A media are supported the service
Speaker 1: as a hobby. He had no real plans to make
Speaker 1: it a business. He promoted the site on various news groups,
Speaker 1: but many of them required a moderator to review a
Speaker 1: post before listing a post, and everyone was on vacation
Speaker 1: because it was the long weekend. By the end of
Speaker 1: Labor Day weekend, auction Web had received precisely zero outside visitors.
Speaker 1: But again, this was a hobby, so a media wasn't
Speaker 1: really discouraged. He was just continuing on with his day.
Speaker 1: Word did gradually get out, In fact, it didn't get
Speaker 1: take very long at all. By the middle of September
Speaker 1: people were talking about it, and people began to list
Speaker 1: items for auction on the site. According to the book
Speaker 1: The Perfect Store, a medior visited a newsgroup at misq
Speaker 1: as m I s C Dot for Sale dot non
Speaker 1: computer and gave a complete rundown on all the non
Speaker 1: computer items that were currently up for auction, along with
Speaker 1: their current bids over at auction Web, and here is
Speaker 1: a list of the things that you could have been
Speaker 1: on during that week. Superman Metal lunchbox nineteen sixty seven
Speaker 1: used good condition. The current bid was at twenty two dollars.
Speaker 1: Autographed Marky Mark underwear. Current bid was at four hundred dollars.
Speaker 1: Autographed Elizabeth Taylor photo. Current bid was at two hundred dollars.
Speaker 1: Autographed Michael Jack and poster. Current bid at four hundred dollars.
Speaker 1: A toy power boat late fifties early sixties, current bid
Speaker 1: sixty dollars. A Hubily five twenty cast iron hook and
Speaker 1: ladder truck, current bid three hundred dollars. Collectors multicolor reflection hologram,
Speaker 1: current bid five thousand dollars. A check vase, current bid
Speaker 1: five dollars. And cobalt clear cut glass rose bowl current
Speaker 1: bid twenty five dollars. That was the sum total of
Speaker 1: all the non computer elements, all the non computer items
Speaker 1: that were available on eBay dot com at that point
Speaker 1: eBay dot com slash a W that is, but none
Speaker 1: of those items would be the first one actually purchased
Speaker 1: off of auction web. According to the company's own history,
Speaker 1: the very first item ever bought at auction at eBay
Speaker 1: dot com slash a W was drumroll please, a broken
Speaker 1: laser pointer, a laser pointer that was, as advertised broken.
Speaker 1: What's more, we know who bought it. The name of
Speaker 1: the person who purchased this broken laser pointer was Mark Fraser,
Speaker 1: and I've seen some articles that suggested he was a
Speaker 1: collector of broken laser pointers. In fact, according to at
Speaker 1: least one story, Pierre omidy Are actually called up Mark
Speaker 1: Frasier personally and said, hey, you won this aunction, but
Speaker 1: did you know that this is for a broken laser pointer,
Speaker 1: And supposedly Fraser responded, I collect them. But that's not
Speaker 1: what Mr Fraser has said in interviews following this event.
Speaker 1: According to a video Mark Fraser appeared on as part
Speaker 1: of eBay's twentieth anniversary celebration, the story goes like this,
Speaker 1: Frasier was traveling as part of this job and watching
Speaker 1: a lot of presentations, and at some of these presentations,
Speaker 1: the people were using laser poinners, and Fraser thought they
Speaker 1: were pretty neat, so he wanted one, but at the time,
Speaker 1: they cost more than a hundred dollars and he really
Speaker 1: didn't have that kind of money to spend on something
Speaker 1: as frivolous as a laser pointer. So, being of an
Speaker 1: engineering mindset, he decided he would make his own. He
Speaker 1: got hold of a laser diode and he designed a
Speaker 1: circuit and built his first prototype, but there was a problem.
Speaker 1: The light wasn't focused in a tight beam like a
Speaker 1: laser and that's when he heard about auction web. He
Speaker 1: popped on there and he saw that someone was selling
Speaker 1: a broken laser pointer, and he figured he could get
Speaker 1: the broken pointer and use it to complete his own
Speaker 1: d i Y project, and so he made a bid
Speaker 1: and he won the auction for fourteen dollars and eighty
Speaker 1: three cents, So it's not quite as ridiculous a story
Speaker 1: as some outlets made it out to be. One week
Speaker 1: after a Metier had shared that list of non computer
Speaker 1: items that were available on auction web, he had an update,
Speaker 1: and that included a warehouse in Idaho had an opening
Speaker 1: bid set at three D twenty five thousand dollars. In
Speaker 1: addition to crazy things, auction web was picking up traffic.
Speaker 1: Word was spreading throughout the end of nine and by
Speaker 1: the close of the year, just a few months after launch,
Speaker 1: the site was receiving thousands of visitors and items had
Speaker 1: received tens of thousands of bids. This ended up being
Speaker 1: a problem. However, a Midier was still operating auction web
Speaker 1: as a hobby. He was happy to have it hosted
Speaker 1: under his eBay dot com site. With his other interests.
Speaker 1: He was paying about thirty dollars a month in hosting
Speaker 1: fees for all the sites collectively. But auction web was
Speaker 1: starting to get serious traffic and a Medier's hosting service,
Speaker 1: a company called Best, was complaining that this increased traffic
Speaker 1: was slowing down their network, so they told a Medier
Speaker 1: they were going to transition him to a commercial account,
Speaker 1: which would cost two d fifty dollars a month, not
Speaker 1: thirty dollars a month. A Medior tried to contest the decision.
Speaker 1: He said, auction web isn't a business, and at that
Speaker 1: time it really wasn't It was a marketplace, but it was.
Speaker 1: There was no way to make money from it. There
Speaker 1: was no cut of sales going on. But Best was
Speaker 1: not going to play ball, and a Mediora had a
Speaker 1: tough decision to make. He was gonna have to either
Speaker 1: walk away from this community that was starting to grow,
Speaker 1: knowing that he couldn't really afford to pay two fifty
Speaker 1: dollars a month just to support a hobby. He had
Speaker 1: not yet come into all that money from the acquisition
Speaker 1: of the shop. That hadn't happened yet, So he was
Speaker 1: either gonna have to walk away or he was going
Speaker 1: to have to charge users for auction Web. But how
Speaker 1: would he do it? Well, I'll explain in a second,
Speaker 1: but first let's take another quick break to thank our sponsor.
Speaker 1: A medior didn't want to discourage people from using auction
Speaker 1: Web and he wasn't crazy about the idea of charging
Speaker 1: people a fee to use it. So his solution was
Speaker 1: to create a system in which people could view and
Speaker 1: list items online for free. There was absolutely no charge
Speaker 1: to shop around or put an item up for auction.
Speaker 1: The fee would only come in after an auction ended
Speaker 1: with a successful buyer. At that stage, auction web would
Speaker 1: take a percentage of the final bid. For bids that
Speaker 1: were less than twenty five dollars, auction web would take
Speaker 1: a cut of five percent. For auctions that ended above
Speaker 1: twenty five dollars, the cut would be two point five percent,
Speaker 1: and a medior kind of came up with this on
Speaker 1: his own. Sellers began to send in money after successful auctions.
Speaker 1: Sometimes it came in the form of a check. Sometimes
Speaker 1: a Medior would literally receive cash or change in envelopes.
Speaker 1: It wasn't terribly elegant, but it was working. In fact,
Speaker 1: it was working so well that he was making more
Speaker 1: than the two fifty dollars at cost in hosting fees,
Speaker 1: so auction web was officially a profitable business. By February nine,
Speaker 1: the site was doing pretty well. A midier was smart
Speaker 1: enough to realize he didn't have the experience or business
Speaker 1: education to run auction Web successfully on his own, so
Speaker 1: he was spending nearly all his time either making sure
Speaker 1: the site wasn't going to crash or building out new features.
Speaker 1: So he looked around for someone who could join the
Speaker 1: company and help him out by taking on a leadership role.
Speaker 1: He reached out to a friend of a friend named
Speaker 1: Jeff Skull. Skull had attended the University of Toronto and
Speaker 1: earned a degree in engineering before he went on to
Speaker 1: grad school at Stanford and earned an NBA. In between
Speaker 1: undergrad and graduate school, he launched two companies successfully and
Speaker 1: so he was doing pretty well. A midier had reached
Speaker 1: out to Skull earlier in n to ask him to
Speaker 1: work on auction Web, and at that time Skull turned
Speaker 1: down the offer. He didn't think people were ready to
Speaker 1: use the Internet for commerce. He then went on to
Speaker 1: work for a newspaper chain, but when he did that,
Speaker 1: he saw that the newspaper business was terrified of the
Speaker 1: Internet and its potential impact on the classified business. A
Speaker 1: website could post the same sort of stuff as a
Speaker 1: classified ad without the restriction for space, and with dynamic pricing.
Speaker 1: Skull rethought his decision and in February nine he began
Speaker 1: to do some consulting work for auction Web. A media
Speaker 1: are meanwhile, tried to instill in his users a sense
Speaker 1: of community, and in fact that community began to coalesce.
Speaker 1: Some have even gone so far as to call eBay
Speaker 1: one of the first social networking platforms. A media or
Speaker 1: was still running the show all by himself at this
Speaker 1: point with some consulting work from Skull, and when problems
Speaker 1: popped up, he was the only point of contact. His
Speaker 1: email address was on the website. He had to deal
Speaker 1: with the site issues as well as disputes between buyers
Speaker 1: and sellers, and so, in an effort to make things
Speaker 1: run a little more smoothly and to help remove himself
Speaker 1: from the equation just a little bit, he created the
Speaker 1: Feedback Forum for auction Web. To participate, a user would
Speaker 1: first need to register with the Feedback Forum. The purpose
Speaker 1: of the forum was to provide feedback to the community
Speaker 1: about various buyers and sellers. Media are encouraged people to
Speaker 1: praise those who practiced good habits in buying or selling,
Speaker 1: and to warn others for those few who might be
Speaker 1: taking advantage of the platform or just behaving in a
Speaker 1: poor way. He also reminded users that humans don't always
Speaker 1: make the right choices and it's not always a malicious
Speaker 1: or intended action, so in other words, they should try
Speaker 1: to be understanding and sympathetic before leaping to the conclusion
Speaker 1: that they were getting scammed on purpose. In the forum,
Speaker 1: users could rate one another. The rating system was pretty basic.
Speaker 1: You could give a user a plus one, meaning the
Speaker 1: experience you had with that user, whether you were dying
Speaker 1: from them or selling to them, was a positive experience.
Speaker 1: Or you could give a negative rating, indicating something did
Speaker 1: not go well, perhaps someone failed to pay or failed
Speaker 1: to send an object, or you could just go with
Speaker 1: neutral if there was nothing remarkable to say about the experience.
Speaker 1: They could also expand upon that rating by writing a
Speaker 1: comment and explaining the situation further. The rating would become
Speaker 1: a tag for each user. Whenever that user interacted with
Speaker 1: the site by listing an item or placing a bid,
Speaker 1: their rating would appear next to their name. This gave
Speaker 1: everyone else a quick glance at who was trustworthy and
Speaker 1: who was not. And if your rating got too low,
Speaker 1: too low being minus four points, although that was not
Speaker 1: actually uh explained or communicated to the community, then omidi
Speaker 1: are would drop the ban hammer on you. You would
Speaker 1: become known as a not a registered user or nauru
Speaker 1: in a r U. The site also introduced a bulletin
Speaker 1: board system designed to help answer questions in the community
Speaker 1: such as what shipping methods would be the most economical
Speaker 1: or reliable, and how do you handle situations in which
Speaker 1: something has gone wrong. The community itself would respond to
Speaker 1: those messages, so you'd have users answering the questions of
Speaker 1: other users. It was almost like auction web had built
Speaker 1: out its own customer service department, but instead of using employees,
Speaker 1: it was the fellow users of the site who were
Speaker 1: doing all the communicating. Six months after auction Web went live,
Speaker 1: and just a few months after a Metier had instituted
Speaker 1: the fee for successful auctions, the site was pulling in
Speaker 1: about five thousand dollars per month. In June, Meteor hired
Speaker 1: on Chris Agarbo to come in to a midiers home
Speaker 1: and essentially open up envelopes filled with fees because remember
Speaker 1: these were often small amounts, sometimes just a few cents
Speaker 1: at a time, and the gar pal collected the funds
Speaker 1: and he would deposit them into the business's accounts. So
Speaker 1: essentially he was coming in twice a week, opening up envelopes,
Speaker 1: gathering up money, and going to the bank to deposit it.
Speaker 1: By the end of June, auction web was generating ten
Speaker 1: thousand dollars and so many people were using the site
Speaker 1: and bidding on items. Remember this is just a small
Speaker 1: percentage of those bids so ten dollars that that represents
Speaker 1: a lot of stuff going on. So it was beyond
Speaker 1: anything a Midier had hoped for when he first launched
Speaker 1: this hobby and it changed from hobby to full time job.
Speaker 1: He was making more money overseeing the site than he
Speaker 1: was in his day gig, so he quit his day gig.
Speaker 1: In July, n a Midi are convinced Jeff Skull to
Speaker 1: step up as the first president of auction Web, and
Speaker 1: in August Skull would quit his gig at the newspaper
Speaker 1: chain to focus solely on the company that would become eBay.
Speaker 1: Not keep in mind this is also the year that
Speaker 1: Microsoft would acquire e Shop and turn a Midier into
Speaker 1: a millionaire. But this was just the beginning of which
Speaker 1: is for the French Iranian immigrant. I have a lot
Speaker 1: more to say about that journey, and we will continue
Speaker 1: this story in the next episode. I hope you guys
Speaker 1: have enjoyed the early days of eBay. The story gets
Speaker 1: way crazier as we go on, so I hope you
Speaker 1: joined me for the next episode. If you guys have
Speaker 1: suggestions for future episodes, please let me know send me
Speaker 1: an email. The address for the show is tech Stuff
Speaker 1: at how stuff works dot com or draw me a
Speaker 1: line on Facebook or Twitter. The handle of both of
Speaker 1: those is tech Stuff H s W. Don't forget to
Speaker 1: follow us on Instagram and I'll talk to you again
Speaker 1: really soon for more on this and thousands of other topics,
Speaker 1: because it how stuff works dot com