Lesson #5: Every Business Needs its Cheering Bull

“You'll fail at some things – that’s a learning experience that you need so that you can take that on to the next experience,” says Omidyar. “What you learn from those challenges and those failures are what will get you past the next ones…I was the pretty consistent bull and the cheerleader on eBay actually.”

eBay has become a household name throughout North America, but the company has not been without its growing pains. In mid-1999, it suffered a number of significant public failures. In one instance, the company’s system was down for 22 hours, followed soon after by another eight hours. Both service interruptions were actually caused by the very rapid growth of the company. By that point, eBay had become a relatively large community – so large in fact that CNN satellite trucks positioned themselves in the company’s parking lot to cover the breaking national news. The world was watching and most commentators believed the crisis marked the end for the young company. Customers were upset; many of them had become dependent on the income generated by their sales on eBay.

However, Omidyar refused to give up and he acted quickly to regain his customer’s confidence. The company immediately made 10,000 phone calls to eBay’s top users, apologizing to them for the disruption and assuring them that the site would be up and running again as soon as possible.

Omidyar’s strategy worked as members gradually returned and reaffirmed their loyalty to the struggling company. “Even after that, they come back and they say, ‘Okay, well, we know you’re doing your best. We’re with you,’” recalls Omidyar. “And so I’ve always had this unshakable faith that it’s going to endure.”

The experience was a humbling one for Omidyar, but also one he now looks back on as valuable and necessary. “I think failure of that magnitude, or a challenge of that magnitude, is really important and I’m glad that we faced it so early in our evolution,” he says, after which time the company “really woke up to the fact that infrastructure and technology was critical and just really built that organization out.”

Omidyar claims it took the company six to nine months to recover from that one major setback. There would surely be more to follow as the company hurried to catch up its infrastructure with its rapid and unrelenting rate of growth, but Omidyar wasn’t worried. “I think those challenges are really critical and really important,” he says. “What you learn from them is, of course, kind of what they say, ‘If it doesn’t kill you, it makes you stronger,’ and it’s true. And what you learn from those challenges and those failures are what will get you past the next ones.”

Omidyar had seen the potential that lay behind eBay and, throughout all the challenges, maintained his unwavering faith in the company. He fought for his vision and rallied his troops around it. “I just knew that there’s just nothing that can happen that can make it go away.”



Lesson #5: Every Business Needs its Cheering Bull

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