Posts Tagged ‘business ideas’
“I never had it in mind that I would start a company one day and it would really be successful. I have just been motivated by working on interesting technology.”
Omidyar was born in Paris in 1967. He moved to Baltimore when his father began his term of residence at Johns Hopkins. Omidyar became captivated by computers while at high school and skipped his gym classes in order to use it. Noticing the boy’s keen interest, the principle gave him the job of creating a program that would produce catalog cards for the library. He was paid $6 an hour.
At Tufts University, Omidyar worked on a program to assist Macintosh programmers with computer memory problems. His request that users of this shareware file pay on the honour system did not bring many replies; the cheques that should have been going to fund his years as a computer science undergraduate went solely to paying for the post office box.
In 1991, Omidyar went to work with three friends to create pen-computing programs. Though Pen computing was a dismal failure, the e-commerce site (eShop) on the Web site that Omidyar introduced and operated enticed Microsoft to buy the company.
Starting The Business
Omidyar went to work with General Magic, a software company, in 1994 and made extra money designing Web pages on the side. The girl he was dating at the time, Pamela Wesley, who would later become his wife, collected Pez dispensers and often complained how difficult it was to meet others passionate about her hobby on the internet. Thoughtfully, Omidyar appended a small online auction to his personal website so Pamela would make contacts with other collectors as well as buy and sell.
eBay (electronic Bay, as in the San Francisco Bay area), as it was when it first appeared in 1995, operated merely as a forum for people to sell and bid on various items. Omidyar did not back goods, mediate conflicts, or get involved if there were accusations of dishonesty or abuse of the system. Almost immediately, collectors of Barbie dolls, Beanie babies and the like flocked to eBay.
Three months after its launch, Omidyar had to ask his friend Jeff Skoll, also a programmer, for help. In order to cover the new costs involved with the growth of the business, Omidyar began charging small change to list an item on the site and took a small commission if the item was bought.
Building An Empire
Omidyar was surpised by his continued success and had to hire someone to open the large number of cheques that were being sent in. He was also surprised that people were not simply using the site to buy and sell, but also as a meeting place where relationships were made over common interests.
After qutting his day job, Omidyar worked along with Skoll to improve eBay. They felt that if a sturdy framework was in place, business would generate by itself. After just under two years of operation, eBay was one of the most popular internet sites, 1,50000 users bidding on 794,000 items daily. And the company was now doubling every three months.
At such a rate of growth, Omidyar and Skoll sought venture capital assistance and a management team that would further move the company forward. Benchmark Capital gave the partners a $4.5 million cheque for 22% of the company. Benchmark also found a CEO for eBay, Margaret Whitham, an executive from Hasbro, and with her leadership, the business became a slick corporate entity. With a new look, better publicity, and greater organization, eBay went public on September 24, 1998. Within four months of trading, the stock, which started at $18 per share, was worth $300. Omidyar became a billionaire.
Now selling far more than just Pez dispensers, eBay has completely changed e-commerce. Despite increasing competition, eBay continues to grow. Omidyar recognized and seized the opportunity that essentially fell into his lap and revolutionized internet use.