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Meg Whitman: How We Grew eBay from 30 to 13,000 Employees

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Meg Whitman: How We Grew eBay from 30 to 13,000 Employees

The eBay CEO discusses smart acquisitions and what it takes to keep 193 million passionate users happy.

Meg Whitman's first look at eBay's website did not inspire visions of a multinational company that sells $1,608 of merchandise per second. The site had an online auction section where people sold collectibles, such as Beanie Babies, but it also prominently featured information on the Ebola virus, a passion of founder Pierre Omidyar.

Whitman met with Omidyar anyway about the CEO position — and concluded he was a visionary. She took the job as president and CEO of eBay, a company with just 30 employees, in 1998. Today, eBay has 13,000 employees and 193 million users all over the world. And it has a passionate community of users who send Whitman thousands of angry e-mail messages whenever the company does something they don't like.

The company's dramatic growth was one theme of Whitman's May 23 talk at Stanford GSB, part of the student-sponsored "View From The Top" speaker series. She also discussed lessons she has learned during her career, which has included executive positions at Hasbro and the Walt Disney Co. And she described two major acquisitions for eBay, PayPal and Skype.

PayPal and eBay have helped each other in ways that made the acquisition seem natural: eBay provided the person-to-person transactions that PayPal needed to grow, and PayPal's online payment system made it easier for eBay's users to make their purchases. "PayPal had become the wallet on eBay," Whitman said. "We had to own that company."

The synergy is less obvious among eBay, PayPal, and Skype, which lets people make phone calls over the internet and which eBay bought last year. But Whitman said the goal is to harness "the power of three" — getting all three companies to thrive on their own but also build on each other's strengths. One area where PayPal and Skype can work together, for example, is in fraud-fighting efforts.

Skype, like eBay and PayPal, has seen enormous user growth: It has at least one user in every country in the world except North Korea. Like eBay and PayPal, Skype grows through user referrals.

"It has a pattern that we recognize really well," Whitman said. "I think we understood what Skype offered far faster than almost anyone else."

Whitman, who keeps a notebook in which she writes down things she learns each week, also reflected on lessons she has learned in more than eight years at the helm of eBay.

One, she said, is that "the price of inaction is far greater than the cost of a mistake." The culture at eBay allows people to make mistakes, as long as they recognize and fix them quickly.

Whitman emphasized the importance of hiring "an A+ team" and making sure people are in the right job at the right time. This can be a challenge when the company is growing fast and the responsibilities of many jobs have multiplied.

Whitman focuses on hiring "ahead of the curve" — that is, hiring people who can handle a bigger job than what theirs will be initially, so that as the company grows they'll be ready for it. This focus stems from another of Whitman's lessons learned — that experience and intuition matter.

"Pattern recognition is gained through experience," she said.

Whitman also has developed a strategy for starting a new management position.

"The tendency when you come in from outside is to prove yourself by finding what's going wrong," Whitman said. She suggests a counterintuitive approach: Find out what's going right first. Although it may seem that identifying and correcting problems is the best way to add value early in a new job, focusing first on what's being done well is a valuable way to learn about the company culture.

Whitman ended her talk by fielding questions from students. When asked who eBay's competitors are, she mentioned, among others, that brick-and-mortar retailers are becoming serious online competitors.

Another student asked how Whitman and her husband, a Stanford neurosurgeon, balance two high-pressure, high-profile careers with the demands of raising children. "With great difficulty," Whitman replied — and, she added, with a lot of help both from people they hire and from family and friends. There are always trade-offs when it comes to work-family balance, Whitman said, and the key is to make them intelligently.

Another questioner asked what motivates Whitman and other longtime eBay employees to keep working when they don't need to financially.

Some of the company's early employees have left to pursue other interests but most have stayed, she said. "What we try to do is give people what we call a career adventure." Part of that is having a sense of purpose: eBay helps 1 million entrepreneurs make their living selling their products.

As for what motivates her, Whitman said, "eBay is endlessly interesting."

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