eBay is now celebrating its 10th anniversary. The highlight of the celebration was eBay Live! 2005, held in June in San Jose, California. To mark the occasion, Pierre sat down with Jeff Skoll, his friend and eBay's first President, for a Fireside Chat to reflect on the remarkable adventure that has been eBay.

As Pierre and Jeff walked onto the San Jose Civic Auditorium stage to a large ovation from members and staff in the audience, they were welcomed by their host Jim Griffith, eBay's Dean of Education and better known as “Griff” to eBay members. Griff didn't waste any time and jumped right into the questions, first asking what each of them was doing before eBay.

Pierre responded by chuckling, “It's hard to imagine anything before eBay.” He described how he had worked for several companies in the San Francisco Bay Area, and at that point was working for a spin-off of Apple. “I had been watching the Web evolve, from the birth of the first Web browser in 1993, to seeing the Web finally do some interesting things in 1995, which led me to think about putting AuctionWeb (as eBay was originally known) together.” Jeff had recently graduated from Stanford School of Business, and was working for a newspaper company to try to move their products such as classifieds to the emerging online world.

“That's a really dumb idea” (Who knew?)
When Pierre first told him about his concept, Jeff was initially a bit skeptical. Laughing, he recalled, “Having come right out of business school, I knew I was right when I said ‘Pierre, that's a really dumb idea.'” But as time went on and Jeff saw how the site was growing, and it became more apparent that the newspaper wasn't ready to move their classifieds online, he started to become more interested.

Because both Pierre and Jeff were working full-time jobs at the time, the site was just a nights-and-weekends commitment at first. But then the growth rate accelerated. Pierre described how in February of 1996, his Internet Service Provider (ISP) called to say that, as AuctionWeb was taking up too much bandwidth for the $30 per month package to which Pierre was subscribing, they were bumping him to the $250 per month tier. “$30 a month I could deal with, for what was a hobby, but $250 was a lot. So that was birth of Final Value Fees.”

“This should be a real business”
The money generated from charging sellers fees on eBay quickly outgrew Pierre's ISP costs (although he was later bumped up to an even more expensive package), and the site continued to grow. By the middle of 1996, Pierre was making more money from his hobby than he was from his full-time job. “That's when the non-business-oriented software engineer in me had the light bulb go off and realized that's a clue – this should be a real business.” By this time, Jeff too had been convinced, and both quit their jobs and turned to building eBay full-time.

Not that they really had any place to actually go to. They were in Silicon Valley during the Internet boom of the late 1990s, so office space was really hard to find. “We started out in Pierre's living room, and after a while his girlfriend (and now wife) finally said ‘you guys have to go,'” said Jeff. “So then we went to my living room, and after that ended up sharing space in an incubator run by NASA's Ames complex in Sunnyvale, California.”

“Here's your desk, and here's your screwdriver”
Finally they found a proper office in San Jose. This prompted Griff, the Fireside Chat moderator, to ask if they remembered what new employees could find when they first came in. “We really felt, back in those days, that the revenue we were earning was there to support the growth of the network for everyone's benefit. We weren't your typical venture-capital-funded startup. We weren't really into building fancy offices and having leather furniture. So we said ‘here's your desk, and here's your screwdriver,'” said Pierre (causing Griff to note that it was a really “hands-on” business). They recalled how the first 75 people in the company had to go to a store, purchase, and then assemble their own desk. “We knew that people in the Community were starting to build their hopes and futures on the site, so we wanted to build responsibility right into the DNA of the company,” noted Jeff. Pierre than laughed, “We had one employee who I think had a nervous breakdown after not being able to assemble their desk.” At this, Jeff quipped, “I think he was the 76th employee.”

Griff then asked when they knew the site was going to be a success. Pierre responded that it was when he sat down with their first focus group consisting of eBay members, and saw the passion of the Community. From the business side, Jeff said he knew it in late 1997, when two large competitors entered the scene, vying for the attention of eBay's fledgling Community of members. However, the good reputation that eBay and its sellers had built kept attracting more and more people, and the site continued to grow despite the new threats.

“It feels good to be able to say Thank You”
Griff soon turned the Fireside Chat conversation to another crucial element of eBay – the concept of feedback. “It was February of 1996,” started Pierre. “I was running this site as my hobby, and I was starting to get a lot of emails and complaints from members about other members. As the sole person, it was difficult to keep up.”

As he tried to figure out a way to address members' complaints, Pierre urged them to also see the positive aspects of the eBay Community, which far outweighed the not-so-positive side. “While you're going to the trouble of criticizing people, can't you also recognize that there are thousands of good things going on every day, and give credit where credit is due as well?” But Pierre recognized the value of a public area for complaints. That led to the creation of the Feedback Forum. “While conventional wisdom will tell you that you'll get ten times more complaints than praise in business, the opposite is actually true on eBay. When someone does something nice for you, it feels good to be able to say Thank You.”

“There was no way we could get her (Meg). Not a chance.”
Griff next steered the topic to the search for eBay's CEO. When Pierre and Jeff realized that the company was outgrowing their abilities as young managers, they turned to a recruiting service to find someone to run eBay. Pierre recalled, “What was amazing was that one of our board members was looking at a list of 100 names with us. When he saw Meg's, he said he didn't know her, but that he'd heard a lot of fantastic things and there was no way we could get her. Not a chance.”

Meg Whitman already had a great job, and strong familial ties to the East coast. Why would she want to come to an Internet startup out in California? That's when they put on the hard sell, said Jeff, which included a little subtlety. “At that time we didn't have a receptionist, but the day that Meg came to visit, we purposely went out and hired one, set up a desk and put up flowers,” said Jeff, drawing a laugh from the audience. “Then serendipitously, Meg's husband received a job offer as a chief neurosurgeon out here, and it opened the door.” In what would prove to be a move that was fortuitous for everyone, Meg Whitman joined eBay in March 1998.

“How cool is that?”
As the Fireside Chat began to wind down, Pierre and Jeff talked about what each of them was doing now. Still motivated by the concept of helping people help themselves, both are busy trying to make the world a better place. Pierre started a foundation (the Omidyar Network) that helps support businesses that factor social impact into their success, such as eBay. And Jeff created the Skoll Foundation, which has become one of the leading organizations in the world that focuses on social entrepreneurs and helps them with their work.

But it was clear during the evening that both Pierre and Jeff are amazed to see what eBay has grown into. Said Pierre when commenting on how eBay has evolved, “How incredible was it to have the Postmaster General of the United States come out here (during the Keynote Address at eBay Live!). Who would've thought that little eBay would have the Postmaster General out there? How cool is that?”

You can hear an audio recording of Pierre Omidyar and Jeff Skoll's Fireside Chat in its entirety through eBay Radio.