The Book Club

It’s the Community, Stupid

Hello David and Andrew,

What’s the most important difference between a cold warehouse-to-consumer e-tailer like Amazon and a shiny, happy consumer-to-consumer site like eBay? The answer we find in The Perfect Store is as simple as a Clintonesque campaign slogan: “It’s the community, stupid.”

I think Adam Cohen’s brief history of eBay strikes an admirable balance between documenting the efforts of the staff members who grew the company from within and recounting the antics of the hardy—if sometimes downright weird—members of the eBay “community.” These are the people who not only “buy and sell almost anything” on the site (were you as surprised as I was by the market for used underwear?) but also chat, complain, commiserate, exult, and even boycott.

The result is a clear record of how, throughout its dizzying seven-year rise, eBay was forced to learn the same lesson over and over again. The lesson is this: Decisions about major changes to the company or its site—adding banner ads, going public, opting not to allow auctions of guns or body parts (!), changing user feedback policies—have to be pre-announced and amply discussed in online forums if the legions of community members are to be kept happy.

While the importance of this lesson is obvious, reading the book I found myself benumbed by how often Cohen returns to it. He repeatedly gives us stories of the following form: 1) eBay management unilaterally makes executive decision X; 2) eBay community revolts and threatens to boycott (once, in 2000, they even did, to the tune of 1 million auctions); 3) eBay management eats crow and rescinds/revamps/reconsiders X.

The effect is that the book feels repetitive, and the management comes off as rather slow on the uptake (how many times can they make the same gaffe?). Cohen rarely misses a chance to drive home the moral of the story; thus, a minor flap over how much to charge for reserve auctions becomes, portentously, “a reminder—the latest reminder—of the importance of including the community in proposed changes to the site.”

A related question: I suspect you two will agree that Cohen is very positive about eBay on the whole—perhaps too much so—but what do you make of his longing for its lost innocence? As the company evolved from a modest one-room concern into a $16 billion behemoth with 50 million registered users, serious changes were inevitable, no matter what the outcry in the chat rooms. CEO Meg Whitman is quoted as saying that “community has always been central,” but this seemed to me, even in Cohen’s friendly hands, like so much lip service.

In reality, many of the pre-IPO faithful have abandoned eBay altogether, some of them now bitterly critical of corporate management. The chat boards (at least in my informal survey) are still quite active, but they appear to be less cohesive or even coherent, due in part to the sheer volume of users (one poster to a board hawks the wares in his personal eBay store, the next poster asks others to pray that her pickup will sell this week, the next inexplicably says, “*Hugs* to y’all, got2go, LOL,” all within a few seconds!). The auctions, meanwhile, are often dominated by “power sellers” with huge eBay businesses boasting assembly line efficiency.

In response to these developments, Cohen seems at once to share the old-timers’ nostalgia for the intimacy that eBay has lost while still being awed by the wealth-creating machine that it has become. I don’t know about you, but, reading his book, I confess I found it hard not to feel the same way.

Andrew C.