In the fast-paced world of e-commerce, the needs of our Community change quickly. Offering new products and features, and continuously improving existing ones at a rapid pace has enabled eBay to keep abreast of what our buyers and sellers need.
In the first part of a two-part series, we take a look at how eBay develops its products and features. Judy Kirkpatrick, Vice President, Product Management, and Jamie Iannone, Senior Director, Product Marketing, take us on the journey of a product on eBay—from idea to rollout.
The Ideas Funnel Helps eBay filter and prioritize ideas
“It all starts with an idea that meets a business and Community need,” explains Judy Kirkpatrick, Vice President, Product Management. “Because eBay is a responsible business, we don’t have unlimited resources to implement every idea. We need to make sure that when we spend resources to implement an idea and launch it as a product or feature, the benefits to our members, as well as to eBay’s business, are justified.”
This is where the “ideas funnel” comes in—it’s a concept that’s at the heart of eBay’s product development process—also known as the Product Life Cycle or PLC.
The funnel concept helps eBay evaluate and prioritize ideas on many levels, such as value to the Community, importance to eBay’s business, and the cost of implementing. Making these decisions at every stage helps narrow down the number of ideas each quarter that the company has the resources to implement. Depending on complexity, it can take anything from a few weeks to a year for an idea to go from concept to rollout.
Where do ideas come from?
Jamie Iannone, Senior Director, Product Marketing, explains that ideas can come in from a number of sources. He lists a few of these “idea buckets”.
“Some ideas come through what we call ‘strategic analysis’ – our teams are constantly keeping an eye on our Community’s needs, as well as on what’s going on in the larger world of e-commerce. This analysis leads to identifying an idea that we think will work great on our sites.”
Jamie explains that the idea for Best Offer arose after our analysis showed that a lot of buyers wanted the ability to make an offer to the seller for the best price they were willing to pay for an item.”
Another very important source of ideas is the Community itself. “At eBay we never cease to be amazed at how innovative our members are,” explains Jamie. “Many products and features available on the site today had their roots in ideas that came in from eBay members, at events like eBay Live!, through the Voices program, or emails sent by members.”
Ideas can come in from many sources--like strategic analysis
Jamie recalls that a member he met at eBay Live! three years ago talked about his business of buying miscellaneous items from trucks that had been in accidents, for resale on eBay. The member said that one of his biggest difficulties on eBay was finding the right categories that matched his diverse inventory. “This was the inspiration for what eventually launched as the Suggested Categories tool on the Sell Your Item (SYI) form.”
Another source for product ideas is the Visits program. As part of this program eBay’s Product and User Experience teams go to members’ homes or eBay business locations to observe how people use the site in their own environments. Judy recalled, “During a home visit, we saw a member trying to list their car on eBay Motors, and realized how complicated it was, from a member perspective. The findings from this visit made us take a new look at the Motors SYI form, especially the “for sale by owner” section. After we launched the improved format, cars listed by owners have gone up!”
From concept to the Business Requirements Document (BRD)
An idea is subjected to basic scrutiny by asking questions such as “Can this idea fulfill a need across a large section of our Community?” and “Is this idea relevant across most of eBay’s global sites?” Often, the team giving shape to the idea will request conference calls with Voices program members to get their opinion. The journey along the "ideas funnel" has started.
As an idea progresses towards actual implementation, it is described in a series of successive documents. Each of these documents helps specific eBay teams understand the description of the idea from several perspectives, for instance cost, how members will actually use the proposed feature, technology requirements, and more.
VP Product Management
The most basic document in the series is one that outlines the concept at the most general level of detail. It’s called the Business Requirements Document (BRD).
The BRD describes the business relevance of the concept, outlining its benefits, both to the Community and eBay. As Judy puts it, “The BRD tells us ‘Here is the basic business need we’re trying to meet or the problem we’re trying to solve.'”
Judy explains that every quarter, after initial evaluation and prioritization, about 100 ideas are summarized into BRD form. BRDs come into the product planning team from business units all over eBay, such as Marketing, Trust and Safety, Customer Support, and Community.
“Scoping” a BRD
BRDs are turned over to a Product Manager (PM) for the next stage in the Product Life Cycle. The PM’s key responsibility at this stage is to define the scope of the BRD. Judy explains that the scope helps eBay understand the proposed product in more detail—in terms of the actual working of the proposed feature as well as its cost. “The scope gives an idea of how the site would change if we were to build this new product. We also get an idea of its features and how much it would cost to build.”
The PM gets the cost of the product by taking the BRD to eBay’s Engineering teams and explaining the business need and priority. Engineering then gives an estimate of the cost of building the product in the required timeframe. The cost of developing products is defined in terms of a software developer’s time. Because eBay’s releases of software code to the site are called “trains”, developers’ time is defined in terms of “train seats.” One train seat is defined as three weeks of a developer’s time. Engineering gives estimates about the cost of a project in terms of train seats. For example, if the estimated cost of development is 20 train seats, it means that it would take 20 developers 3 weeks to build the product. (Or one developer would need 60 weeks).
The scope also includes estimates of the costs involved in other aspects of the project – such as User Interface design (the “look and feel” of the product) and the effort needed for testing the product before it’s launched.
What is the Net Present Value (NPV) to eBay?
No company would devote resources to a project unless it projects a healthy return on its investment. Every BRD at eBay goes through a rigorous financial analysis to estimate the financial benefit of the proposed product to the company. The benefits can manifest themselves either as increased revenue, or as cost savings.
This financial analysis is called Net Present Value (NPV) analysis. Typically the PM, working with eBay’s financial teams, arrives at a dollar estimate of the proposed product’s value to eBay, projected over the next few years. The team makes assumptions based on current trends on the site, and estimates how user behavior resulting from implementing the project could increase eBay’s revenue or decrease costs.
Jamie explains how the NPV was defined for the Suggested Categories feature. “We calculated the NPV by projecting the increase in the number of listings that would happen, in case we were to move ahead with implementing this feature. This increased number of listings translated to a measurable dollar amount in terms of eBay’s revenue. We also estimated what the dollar value would be over the next three years. The cost vs. benefit analysis clearly showed us a healthy revenue projection, so we decided to move ahead with the implementation. It was a win-win project – a win for members who had expressed the need to have suggested categories, and a win for eBay’s bottom line, too.”
The “Fit Scoring” Step
Before the idea moves further down the funnel, teams from different parts of the company have the opportunity to evaluate it from the point of view of their particular areas. Represented at this stage are diverse teams like Community Development, Trust and Safety, Customer Support, Engineering, and Site Operations, who weigh in with their opinions on how the product will impact their respective areas. Each team gives the project a score to indicate how well it “fits” (or does not fit) with their team’s mission. “Fit Scoring” also helps different teams from across eBay understand if they need to change the way they work when the product launches.
Jamie gives an example of how the Fit Scoring step helps the company, as a whole, understand the implications of the proposed product. “We may have an idea that’s fantastic from the business or marketing side of the house, but at the Fit stage, Site Operations could come back saying that implementing the product could significantly slow down the site for our users. Or we may realize at this stage that Customer Support needs to train more resources in anticipation of an increase in email volume from members when the product is launched.”
Presenting to the Product Council, and the “green-green” vote
The ultimate approval for an idea rests with the Product Council, a body of senior executives from a wide cross-section of eBay areas, including Product Marketing, Product Management, the various business units, Technology, and Operations. After the BRD is “scoped”, the NPV analysis is complete, and the Fit scores from different eBay teams are in, the PM makes a case for moving forward with the implementation before the Product Council.
Presenting to Product Council
After the PM’s presentation (“We ask a lot of tough questions about how the product will benefit the Community and the company,” laughs Judy, who’s a member of the Product Council), a vote is taken among the members of the Product Council.
The vote decides whether the idea will move from a mere concept to a new feature or product on the site.
The best possible outcome for a project is a “green-green” vote from the Product Council. Judy explains the color coding. “The first green indicates it’s a great idea, and the second green indicates that all the analyses—like the scoping, the NPV, and the Fit Scoring—show that there are no implementation hurdles. So we say—‘Let’s go for it!’”
Votes with other color codes can send the idea back to the drawing board, or put the project on the back burner. For instance, a “green-yellow” vote means that it’s a great idea, but the Product Council has some concerns about some implementation factors, such as the cost. A “yellow-yellow” vote means that the idea isn’t so hot, and there are serious implementation concerns. An extremely rare vote is the “red-red”.
After the concept gets a green-green vote, it’s no longer just an idea, but a full-fledged project. The next step is for the PM to create the defining document of the process – the Product Requirements Document, universally known within eBay as the PRD.
What information does the PRD contain? Why is it the blueprint of the product? What further steps are involved before the product is launched live to the site? We’ll answer these questions and continue our journey in next month’s issue of The Chatter. Stay tuned!