We Are Living History

/ Adam Nash / 2 Comments

Imagine my surprise.  Sunday afternoon, I got on a plane to Orlando, FL.  When I got on the plane, Lehman Brothers and Merrill Lynch still existed.  When I got off the plane, I checked my iPhone and saw that Merrill was now part of Bank of America, and Lehman was going Chapter 11.

Bear Stearns.  Lehman Brothers.  Merrill Lynch.  Fannie Mae.  Freddie Mac.  AIG.

Ongoing discussion now about Goldman Sachs and JP Morgan.  Fundamental problems right now with any business who basically borrows short and then lends long, at high leverage.

Really unbelievable.  Truly historic times.

I almost finished reading Conscience of a Liberal, by Paul Krugman, on the plane trip back.  When I’m done, I’ll post a book review here.  Krugman is a smart economist, but he’s become rabidly political of late.  Still, a number of very interesting insights in the book.

One thing I definitely agree with is that the meltdown going on right now will be studied in history textbooks, the way that we studied the Roaring Twenties, the Great Depression, and the New Deal.  My guess is that the story will go something like this:

  • The End of the Cold War (1982-1992)
  • The Twin Bubbles (1993-2006)
  • The Great Crash (2007-2008/9)
  • The Way Forward (2009+)

It’s interesting to think about, since of course the history hasn’t been written yet.  And every day brings new surprises.

Alan Greenspan is Right on Fannie Mae & Freddie Mac

/ Adam Nash

The incredibly historic economic news keeps coming this week.  Truly momentous.  It’s as if every article, every book, every course I’ve ever taken in modern economic history and theory was to prepare to understand the events of the past 12-24 months.

In some ways, I think I’m in shock.  It’s like watching history in the making.  History that will be the subject of textbooks for decades to come.  It’s really unbelievable.

After 70 years, we’ve come to the realization that yes, in fact, you cannot keep the benefits of a private company with public guarantees without paying the price at some point.

To rephrase, for decades, politicians from all parties have been in awe of the magic of Fannie Mae and its brethren.  Born out of the Great Depression, and spun off to raise funds for Johnson’s Great Society projects, it seemed to good to be true:

  • Private investors provide capital to add liquidity to the mortgage market
  • Home buyers get cheaper rates
  • Investors get “completely safe” securities that pay slightly more than Treasuries
  • The company generates huge profits on the debt spread between their borrowing rates and mortgage rates/defaults

Well, now we know that it was, in fact, “too good to be true”.

There is a lot to be concerned about in the Paulson plan.  It’s not at all clear why the sub-debt holders were left whole.  It’s not at all clear why the shareholders were left with 20% of the company.

Given the magnitude of the problem and the unpredictability of the large number of parties and variables involved, however, I’m willing to assume that Paulson didn’t optimize for the “best” deal, but for the most pragmatic and least risky in the near term.

(By the way, if you are looking for details, the New York Times pieces here and here have the best write-ups I’ve found to date.)

My biggest fear, at this point, is that the plan really defers the final solution to this problem until the next administration, when hopefully we’re through the worst of this.  It sounds pragmatic, but in reality, it makes it much more likely that by then the crisis will have past, and Republicans and Democrats will retreat to their historic disfunction on the topic.

I’ve read a multitude of proposed solutions, but in this case, I have to say, “Please listen to Alan Greenspan on this one.”

Yes, I know bashing Greenspan has become popular.  I’ll address that in another blog post – I had the opportunity to read his recent auto-biography, and I thoroughly enjoyed it.

Try to ignore the bashing for now, and just focus on his recommendations for Fannie, Freddie, and their ilk.

Here is a WSJ story that summarizes his recommendations, made earlier this year:

His quarrel is with the approach the Bush administration sold to Congress. “They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted — with necessary taxpayer support to make them financially viable — as five or 10 individual privately held units,” which the government would eventually auction off to private investors, he said.

Instead, Congress granted Treasury Secretary Henry Paulson temporary authority to use an unlimited amount of taxpayer money to lend to or invest in the companies. In response to the Greenspan critique, Mr. Paulson’s spokeswoman, Michele Davis, said, “This legislation accomplished two important goals — providing confidence in the immediate term as these institutions play a critical role in weathering the housing correction, and putting in place a new regulator with all the authorities necessary to address systemic risk posed by the GSEs.”

But a similar critique has been raised by several other prominent observers. “If they are too big to fail, make them smaller,” former Nixon Treasury Secretary George Shultz said. Some say the Paulson approach, even if the government never spends a nickel, entrenches current management and offers shareholders the upside if the government’s reassurance allows the companies to weather the current storm. The Treasury hasn’t said what conditions it would impose if it offers Fannie and Freddie taxpayer money.

He’s right, and it’s not too late to move in this direction.

There is no reason for Fannie Mae & Freddie Mac to continue in their current forms.

The government should regulate strictly the requirements for securitizing and guaranteeing mortgages, the way that they regulate commercial banking, deposits, and other types of financial business.  They can define specific types of mortgages, even give the types names to make it easier for consumers to comparison shop, and let the “Baby Fannies” compete to make markets in them.

By breaking them up, and auctioning them off to the mega-banks, both domestic and international, they guarantee a distributed system that will be extremely fault tolerant to the failure of any one entity.  If they structure the regulation properly, they can turn this business into a stable, predictable, profitable business.

Gone is the government guarantee.  Gone is the lobby machine.  Gone is the too-big-to-fail entity.

I think Rep. Barney Frank (D, New York) is an example of why I’m afraid this won’t happen:

In the House, Mr. Frank, the chairman of the House Financial Services Committee, criticized the administration’s attempt to shrink the companies. He staunchly defended the companies’ ability to channel some of their profits from conventional mortgage financing to subsidize the construction of affordable rental housing and lower borrowing costs for low-income home buyers.

Mr. Frank seemed confident that he could stop the effort by the administration to ultimately shrink the companies through its rescue plan over the long term.

Catch that?  What Mr. Frank likes is the fact that instead of getting Congress to agree to fund affordable rental housing programs, which would have to be paid through taxes or spending cuts elsewhere, he liked having an “off the books” slush fund to pay for these projects.  He’s still at it:

After repeated clashes with the White House over legislation that authorized the Treasury to bail out the companies, Mr. Frank succeeded in including a provision that required Fannie and Freddie to divert some of their profit from buying up “jumbo” mortgages for expensive houses into a fund for affordable rental housing.

Great.  After all, passing a law to force Fannie Mae to spend money on a program doesn’t cost the taxpayer anything, does it?

Well, it does.  Those strings came at a price.  The price was the implicit government guarantee.

And now we have a better idea of what that price really was.  And it’s not worth it.

How Apple Should Handle NBC

/ Adam Nash / 7 Comments

Just read this piece on the “he-said/she-said” debate between NBC executives and Apple executives:

Apple Refutes NBC’s Pricing Policy Claims

80/20 Apple is right here, of course.  They did not give NBC any pricing priviledges that they didn’t also give to all video content producers.  However, Apple did introduce it’s first pricing variation for HD with the AppleTV rentals earlier this year, and that’s more than it had last fall when NBC pulled its content.

I think, of course, that Apple is avoiding the most obvious solution to its problem:

  • Buy NBC off General Electric for a fair price
  • Fire at least the top 2-3 levels of executives at NBC
  • Set in place a modern digital content strategy
  • Execute non-exclusive, but solid digital content contracts with Apple
  • Take the new NBC public or sell it

As a side benefit, they could really have some fun with MSNBC.

What’s the point of Apple having a $135B market cap if they don’t use it?   My guess is that if executed properly, the above strategy could increase the value of both NBC and Apple.  Worst case, the upside on Apple is likely greater than the downside for NBC, making the “investment” worth it.

John Lilly, Mozilla Organization Talk at Stanford

/ Adam Nash

John gave a great presentation today at Stanford about Mozilla.  He’s graciously shared it on Slideshare, so I’m sharing it here as well.

A few bullets to think about:

  • How distributed is the decision making in your organization, really?  How much do you empower small, cross-functional teams to execute?
  • How much does your organization really encourage active discussion, debate, and communication?  Does that discussion, debate and communication end within your company walls, or does it extend to your broader community?
  • How dependent is your organization on the “chain of command” vs. recognized experts and groups both within and outside your organization?
  • Does your organization understand the difference between inclusive discussion and democratic decision making?

In the final slides, there are a couple bullets I’m going to have to ask John about tomorrow:

  • Encourage transparency of decision making
  • Avoid democracy/consensus expectation setting
  • Lead, but don’t command

I’m not sure I fully understand the interplay between these in all cases.

The presentation is definitely worth reading if you are interested in Mozilla or distributed organizations.  It’s also worth reading if you want to be able to use the word “chaordic” in a sentence.

Welcome to World of Good

/ Adam Nash / 1 Comment

Seema may be a pretty miserable blogger, but she’s a great product manager.  And her site just went live last week.

Congratulations to the team, and welcome worldofgood.com.

World of Good is an attempt to produce the first, global-scale marketplace for socially beneficial goods.   Yes, when you shop the site you will see badges for:

  • Eco-Friendly
  • People Positive
  • Animal Friendly
  • Supports a Cause

It’s a nice initiative because it combines some of the raw, positive economics from aggregating demand for these poorly distributed goods, allowing many of the vendors to reach buyers they otherwise would be unable to find.  It’s a classic eBay play to try and make an inefficient market more efficient.

I’m not sure of the overall business opportunity here for eBay, but it’s great to see this two-year effort pay off for Seema and the team.  Congratulations.

Goodbye, Bid-O-Matic

/ Adam Nash / 2 Comments

A few weeks ago, I wrote a Eulogy to eBay Express here on this blog, and it rapidly became one of my most popular posts ever.  (Of course, nothing quite competes with the Battlestar Galactica posts, but I digress…)

Last week, eBay quietly announced the death of Bid Assistant, a product concept that I remember fondly from my days at eBay, and I thought it would be worth a few minutes to reflect back on lessons from the life span of that effort.  The truth is, while eBay gets a lot of press coverage from both the traditional media and from bloggers, I see very little, if any, actual detailed discussion of the features themselves, whether good, bad or ugly.  Usually, you just see factual reports, like this.

Bid-O-Matic, the original concept behind Bid Assistant, is an idea that goes back to at least 2005, if not earlier.  The problem it was attempting to solve is pretty much as old as auction bidding on eBay:

  • As a buyer, you often find several auctions for the item you are looking to buy, at various stages of completion.
  • If you bid on only one auction, the price of that auction might go too high, and you might have missed out on one of the other auctions.
  • If you bid on more than one auction, then you run the risk of winning more than one item.

eBay, of course, frowns on retracting bids, let alone backing out of a completed winning bid, so it’s a difficult situation to handle.  If you talked to any of the regular auction buyers on eBay, they would give you a personal story relating to this problem.  Try bidding on a digital camera some time, and you’ll feel the issue pretty quickly.

Enter Bid-O-Matic.

Bid-O-Matic was supposed to be the first step in building a true eBay assistant for bidding.  You, as a buyer, would pick out a list of equivalent items to bid on.  Bid-O-Matic would then place bids for you, attempting to win exactly one of the items at the lowest possible price.

That was the idea, anyway.  Like many great product ideas, it had its roots in a real customer problem;  a customer problem expressed in earnest by some of eBay’s best customers, it’s regular auction buyers.  And it was a classic case where technology could dramatically improve the customer experience.

And like many a road to hell, it was paved with good intentions.

Bid-O-Matic originally failed to get traction within the company, largely because the cost of building the feature did not seem to justify the incremental improvement to the eBay business.  The problem mathematically is that frequent auction buyers actually already buy a lot, so it was hard to see how this tool would really help them buy that much more.  In addition, the problem is unique enough to advanced users that it was hard to imagine that many auction buyers who weren’t regular buyers adopting the tool.

Bid-O-Matic stayed just a concept, until renewed focus on improving the auction experience really took hold in 2006 as part of the “eBay 3.0” concept.  Bid-O-Matic seemed like the perfect example of a feature that eBay’s best auction buyers would love, and so despite the numbers, the feature was given the green light.

Without going into too much gory detail, after much pain, schedule changes, cost increases, design compromises, and a typically horrific naming process, Bid Assistant was born.

While I was a huge fan of the initial concept, and of the people who worked on it, as a user I was never really able to engage with Bid Assistant.  It required a fairly arcane knowledge of “Watching”, the eBay process for bookmarking auctions.  The integration points were also fairly tortured – there was very little in the actual Finding and Buying experiences to lead you to discover the Bid Assistant.  Worse, I think fixed price listings severely limited the potential benefit of the feature.  Bid-O-Matic was never useful for multiple, unique, one-of-a-kind collectibles.  And if you are buying a commodity item, like a specific model of digital camera, then just buying it on eBay Express (or Shopping.com or Amazon.com) made much more sense.

Like all Product professionals, features like Bid-O-Matic leave me torn.  On the one hand, I want to say that there was a real user problem here, and that with the right research, design inspiration, and iteration, eBay could have come up with a great product here.  On the other hand, that time and effort is expensive, and there are likely much more important problems eBay could be putting that effort towards.

In any case, I just want to say goodbye to the Bid Assistant, and a brief acknowledgement to the team that built it.  Better to have tried and failed than to never have tried at all.

Have We Crossed the Uncanny Valley?

/ Adam Nash / 1 Comment

Just for reference, the “Uncanny Valley” is not some cute comment on life in Silicon Valley – it’s a popular concept in computer animation that refers to the challenges inherent in trying to produce “realistic” computer animation of human characters.  I wrote a blog post on the concept back in 2006:

Playstation 3, Uncanny Valley & Product Design

Uncanny Valley is a theory borrowed from robotics that says that when you have something relatively non-human like a puppy or a teddy bear, people will anthropomorphize it and like the “human-like” qualities of it.  However, if you make something too close to human, like a robot, people start to dislike it strongly as they focus on some key, missing detail.  Think about the uneasy feeling around corpses, zombies, or prosthetics.

Well, much to potential delight of 30 Rock fans, we may be closer to crossing that valley than we thought.

Meet Emily.

uncannyemily.jpg

Emily is not real.  She is computer animated, leveraging new techniques for incorporating involuntary eye movement and other incredibly subtle cues from a real actress to generate a realistic effect.  She still comes across as a bit stiff, but not in an unnatural way.

Here is an explanation from the original article in the Times UK:

Researchers at a Californian company which makes computer-generated imagery for Hollywood films started with a video of an employee talking. They then broke down down the facial movements down into dozens of smaller movements, each of which was given a ‘control system’.

The team at Image Metrics – which produced the animation for the Grand Theft Auto computer game – then recreated the gestures, movement by movement, in a model. The aim was to overcome the traditional difficulties of animating a human face, for instance that the skin looks too shiny, or that the movements are too symmetrical.

“Ninety per cent of the work is convincing people that the eyes are real,” Mike Starkenburg, chief operating officer of Image Metrics, said.

If the historical pace of innovation in this area is any indication, we are likely less than three years away from seeing this type of technique utilized in a mass market short medium (commercial, animated short, small film segment) and within five years of seeing this used in a long medium (video game, television show, full length feature).

Amazing.

On a related note, this concept of more intense real-life movement capture to drive computer animation seems to be taking hold aggressively in commercial entertainment as well.  My son’s new favorite show is Sid the Science Kid, which is a new innovation from the wizards at The Jim Henson Company.  It uses a real-time motion capture from a live actor to generate a computer animated special that can be produced in real-time.  A fascinating blend of puppetry techniques and computer animation makes it possible, and the result is a computer animated character who presents realistic faults and behavior on screen.  Here is the Muppet Wikia entry on the show.

It stands to reason that as more performances are captured, and computational storage and processing power increase, it will be relatively trivial to assemble a library of realistic behaviors and actions that will generate truly realistic, but completely artificial, performances.

An Obama Article During the Republican Convention

/ Adam Nash

I generally don’t write about politics here on my blog, largely because I tend to be more issue-oriented than party-oriented, and that seems to bring out fire from both sides of the aisle.

Right now, I’m hopelessly behind on keeping up with the conventions – I’ve downloaded all the speeches from the DNC, but haven’t watched them yet.  Similarly, I haven’t yet watched a single minute from the RNC.

Strangely enough, however, I was forwarded a link to an article Marc Andreessen wrote about meeting Barack Obama in March 2008 that is worth reading:

A Hour and a Half with Barack Obama

Marc’s blog, by the way, is the blog that most closely resembles what I wish my blog could be.  Or should be.  Most of the articles are deep, interesting, sharp, and reflect frank advice and perspective that you don’t typically find in either professional news or popular blogs.  Worth subscribing to if you don’t already.

Ganzbot: I Could Not Be More Proud

/ Adam Nash

I am fortunate to manage a really cool team at LinkedIn.  How do I know this?  Because when Steve Ganz, one of our more senior web developers came back from vacation, he was greeted by… GANZBOT!

Ganzbot is a lot of fun… he is hooked up to Twitter, and to a custom queue application, so you can make him say almost anything.   I sit right across from him, so I’m blessed with hearing a lot of the best Ganzbot interactions.

Now featured, of course, on:

Now, if only we could teach Ganzbot to write modern Javascript…

The Tower of Babel 2008: Burj Dubai

/ Adam Nash / 2 Comments

Remakes are all the rage in Hollywood, and what better original material is there than the Old Testament?

If you are not familiar with the Burj Dubai, it’s the tallest building in the world, and the construction isn’t even finished yet.  It currently stands about 2,275 feet tall, but they are keeping the final height a secret.  Some rumors state that the final height will actually be over 940m (about 3,055 feet, for US types).

Here is what it is supposed to look like when it is done:

Last week, I caught this article in Gizmodo, and it had this great picture in it:

It seems that, like the story of the Tower of Babel, recently the building reached heights that interfered with the functioning of the construction site walkie talkies.  Literally, they built a building so high that they could no longer communicate.

When the unbelievable Burj Dubai started to get really high, the construction workers discovered one problem that seems obvious now: their walkie-talkies stopped working as they climbed the structure. The reason was simple: distance. At the beginning of the construction they used walkie-talkies—which are light, durable, and have a long battery life—across the site.

Not to get too biblical, but a quick synopsis of the original story:

According to the narrative in Genesis Chapter 11 of the Bible, the Tower of Babel was a tower built by a united humanity in order to reach the heavens. To prevent the project from succeeding, God confused their languages so that each spoke a different language. They could no longer communicate with one another and the work could not proceed. After that time, people moved away to different parts of Earth. The story is used to explain the existence of many different languages and races.

Interesting to consider… if just for a moment. Fortunately, there is a happy ending for the Burj Dubai:

Fortunately for them, they turned to mesh networks, which are similar to the ones used in mobiles, but local. For that they used a company called Firetide, using several Wi-Fi-enabled VoIP phones over a HotPort wireless mesh, which also serves as the transport for the security video in the site.

Gotta love technology.

By the way, the Wikipedia page on the world’s tallest buildings is really, really fun to explore.

A Eulogy for eBay Express

/ Adam Nash / 47 Comments

If you follow eBay closely, you may have heard the news already. If not, I’m sure you’ll be reading more about the big eBay announcements over the next few days.

AuctionBytes has coverage, as does Business Week, but I actually think Randy Smythe has the best summary I’ve seen to date.

There are a huge number of changes, and I’m not going to cover them all. Instead, this post is dedicated to one of the smaller bullets in the announcement:

Closing eBay Express: The best features are now on eBay. We’re continuing to bring the best features of eBay Express into eBay.com including more selection in Fixed Price merchandise, improved buyer protection from PayPal, and easier, more intuitive ways for buyers to find your relevant listings. So we’re closing eBay Express and focusing our resources on improving and bringing buyers to eBay.

Since my name was so closely associated with this effort at eBay during my last two years at the company, I figured it was appropriate to post a few thoughts here for those who are either personally or professionally curious.

First off, there is no way to avoid the fact that I feel sad to see eBay Express close. When you build a team and put literally thousands of hours into something, you want to see it continue to live, grow, and flourish after you’re gone. But I’m not going to spend a lot of time on what might have been now.

Instead, I’d like to reflect on just a few key topics: why eBay launched eBay Express, what we got right, what we got wrong, and why eBay Express likely doesn’t fit with eBay’s current strategy.

Why eBay launched eBay Express. This is one is pretty simple, and was publicly discussed in several forums, but I rarely see it accurately reflected in regular press/analyst coverage. It all started in Q4 2004, which was a real wake-up call for eBay. It was the first quarter where the metrics made it clear that there were significant issues with the way buyer demand was scaling on eBay.com.

eBay Express was the culmination of three years of various forms of market and customer research that effectively argued a simple truth: as e-commerce continued to become more and more mainstream, an increasing number of buyers were looking for a different shopping experience. At the time, we called them “convenience-oriented buyers”. While buyers loved the value and selection of eBay, convenience-oriented buyers were looking for more convenience and trust in their shopping experience. They wanted good prices on fixed-price items from reputable sellers, with first-class convenience in checkout and customer service.

When we looked at the needs of both buyers and sellers to make this type of market successful, we found that they were radically different than the auction model eBay.com was based on. eBay Express was the culmination of one possible solution to that problem – a site that leveraged the tens of millions of high quality fixed price listings that eBay already had, while providing a brand-new shopping experience for buyers.

The key to this bet was that with literally zero additional work for sellers, we could boot-strap a brand new marketplace with millions of sellers and tens of millions of items from day one. Once the marketplace had traction with buyers, we would then be able to roll out new seller features and services more appropriate to a high-volume, fixed-price venue.

What we got right. Without getting into the weeds here, there were quite a few things eBay got right with eBay Express. Not all of them may be appreciated by those outside the company.

First and foremost, eBay Express represented a radical break with the way eBay designed and built products. We had volumes of research from over the years, and we literally went across every page, every flow, and asked the tough questions on why this couldn’t be simpler, easier, better for the buyer. The team had two fundamental principles:

  • Keep the site “seller agnostic”, ie, 100% backwards compatible with existing seller process. Selling on eBay Express should be so compatible, sellers shouldn’t even necessarily know that their items were selling on eBay Express.
  • Always ask, relentlessly, “What’s best for the buyer?”

With a strong, dedicated founding team, the effort drew many of the best and brightest from within eBay to assist with every area of the product and across technology, design, and product. At the time, most people at eBay worked on a large number of projects at once, with divided focus across many different features. With eBay Express, time was of the essence, so people had a chance to spend 100% of their time dedicated to the effort.

The end result was a huge leap forward in both technology, patents, user research, and design thinking for many product areas. A modern search classification engine. Relevance sorting. A full featured shopping cart. A completely rethought integration with PayPal. 24/7 Customer Service. No listing fees, with revenue coming purely from promotion and successful sales conversion. Even though the team did not win all of its feature fights to break with the old, the team asked the hard questions, and fought the hard fights.

Not as visible to end users, the groundwork was also laid for significant changes to the way eBay Express would integrate with other sites, both inside and outside of eBay. Half.com integration. Shopping.com integration. Dynamic CPC & CPA-based Featured Placement. API-based platforms to allow any e-commerce site to offer multi-vendor inventory to complete their offerings.

Most importantly to me, eBay Express was designed with extremely heavy involvement from our customers, both buyers and sellers, as well as development partners. In fact, it was reviewed so many times, that even at launch, I don’t think one “new” question came up that hadn’t been raised previously. That isn’t to say that every customer loved every decision made for the site, but it did mean that every concern, every suggestion was considered and incorporated into the design when possible.

What we got wrong. This could be a long section too. Like all 1.0 products, there were a lot of small things we missed. But there were a few big ones that seem so obvious in retrospect.

  1. Branding. It was a tough decision. If you don’t use the eBay brand, you lose any possibility of the positive affiliation and traffic that comes with a known consumer parent brand. But, if you use it, you are also stuck with the negative attributes. eBay means auctions to most people. We ended up going with eBay Express because in the end, it was eBay inventory and we expected traffic to flow from the eBay association. It didn’t, and it also didn’t generate any real unaided awareness for us.
  2. Traffic, traffic, traffic. One of the unanswered questions was how to drive sufficient traffic to the new site. We had initial stabs at this problem, but eBay was still in a phase where it believed in buying traffic. TV, Catalogs, Email, Paid Search. It doesn’t take an Internet genius to realize that buying traffic is horrendously expensive, and frankly, ineffective. Our biggest course correction post-launch was a crash course on how the rest of the e-commerce world looks at traffic generation. Figuring out how to drive traffic in volumes to the site, and build organic traffic in the long term became our 24×7 focus.
  3. Inventory and merchandising. It may be hard for most people to believe this, but eBay at the time was incredibly under-developed on many of the retail basics of merchandising, inventory selection, and promotion. Why? Well, because eBay.com isn’t actually a retailer of anything. We realized post-launch that we needed to develop that expertise, quickly, even to the point of understanding sourcing, distribution, and product selection. Having 10 million+ products is great, but it’s no good if you don’t have the right products at the right price.
  4. International. We designed and built the site, from the ground up, to meet the different needs of the US, UK, and Germany. In fact, I even spent time on concept versions for India, China, and a host of other countries. There were some fundamental disagreements about which model would be most effective, so we built a platform to handle them all. In retrospect, we should have done the US only, and only expanded internationally once we nailed the basics. The distraction, debate, and expense was counter-productive, and in the end, a mistake.
  5. Expectations. There was so much enthusiasm internally around the various aspects of the project, and it was impossible to contain expectations rationally. The reality is that building a consumer brand and a billion dollars in sales doesn’t happen overnight, and it isn’t cheap. Look at how long Amazon has been stretching to build it’s third party sales efforts. We believed we could cut that time in half, but rationally, that was still a minimum 5+ year effort. In the best of times, that kind of effort requires a company with long term focus and commitment. And as we all know now, 2006+ were not the best of times for eBay.

Why eBay Express likely doesn’t fit with eBay’s current strategy. If you’ve actually made it this far through the article, you probably already know the answer to this question.

At a high level, economics speak loudly here. eBay needs to focus on its core marketplace business, and for the most part that means that investing people, technology and dollars towards building new businesses has to take a back seat. You’ve seen other announcements from eBay about closing other businesses, and that stems from this simple truth.

More importantly, eBay has decided against the premise of eBay Express. Our entire reason for building a separate site was because we believed that the changes needed for buyers and sellers in a massive fixed-price marketplace were not compatible with the experience of the traditional eBay auction site. As I used to tell buyers and sellers, we built eBay Express so that we would not have to change the auction experience that millions of buyers and sellers loved on eBay.com.

eBay has now decided that it needs to fold the convenience and trust we identified into the core platform itself. So there is no need for a separate site to preserve the original.

How this new strategy will fair is good topic for debate, but for another time. With eBay’s new strategy, eBay Express will now live on as its feature design concepts and technology innovations become the basis for the new buyer experience on eBay. Of course, the team at eBay has made a large number of improvements and changes in the design concepts to adapt them for the needs of the core marketplace, both from a technical and user experience perspective. eBay Express also lives on as a relentless focus on building a great buyer experience, and a recognition that the needs and economics of high volume, fixed-price sellers are different.

In retrospect, I’m a little jealous of the progress Amazon has made with its FBA and API programs since then. These were all part of our long term thinking as well, so it’s nice to see the validation of their success, but it’s never as much fun to see someone else with that success. Maybe, just maybe, back in 2005 before Amazon had it’s run-up in stock price, eBay & Amazon could have merged, and the the eBay Express backend could have been used to power the Amazon marketplace. Easier said than done, of course.

For the 600+ people who had a hand in creating perhaps the greatest technology & product effort in eBay history, please do join the eBay Express Alumni group on LinkedIn. One of the great things about this industry is that we all get chances to take our lessons from each challenge, and then go and change the world again.

Go with peace, my friend.

Update (08/20/2008): Wow.  This post has been really popular.  Over 300 page views already.  Given the interest, I’m digging up some of my earlier posts on eBay Express:

Understanding the Nature of Glass

/ Adam Nash

This is from over a month ago, but there was a wonderful article for all the closet material scientists out there in the New York Times on Glass a few weeks ago.

Here is an except:

It is well known that panes of stained glass in old European churches are thicker at the bottom because glass is a slow-moving liquid that flows downward over centuries.

Well known, but wrong. Medieval stained glass makers were simply unable to make perfectly flat panes, and the windows were just as unevenly thick when new.

The tale contains a grain of truth about glass resembling a liquid, however. The arrangement of atoms and molecules in glass is indistinguishable from that of a liquid. But how can a liquid be as strikingly hard as glass?

“They’re the thickest and gooiest of liquids and the most disordered and structureless of rigid solids,” said Peter Harrowell, a professor of chemistry at the University of Sydney in Australia, speaking of glasses, which can be formed from different raw materials. “They sit right at this really profound sort of puzzle.”

It’s a great article, and a wonderful exploration of an area of material science that most people assume they know more about than they do.

New York Times: The Nature of Glass Remains Anything But Clear

Enjoy.

How LinkedIn Saved My Wedding Photos

/ Adam Nash / 1 Comment

Editor’s Note: This is the second in a series of posts that I originally wrote for the official LinkedIn corporate blog, but decided they were more appropriate for my personal blog.  The first was Should You Be Eating Your Own Dogfood?, about incorporating your own experience into user experience design.

This may not sound like a typical LinkedIn success story, but it’s an important one.  LinkedIn saved my wedding photos.

In all fairness, the great folks at ScanCafe actually saved my wedding photos.  I read about ScanCafe in a great piece in Money magazine earlier this year.  ScanCafe provides a service where you send them negatives, slides, or photographs, and they scan them and return them to you in digital form.  They even have very high end services, like photo restoration or professional-caliber TIFF file support for true enthusiasts like myself.

After reading about ScanCafe, I was intrigued.  Our lack of wedding photos is a tragic story, dating back seven years to a extremely poor choice of wedding photographer.  Without going into too much detail, let’s just say that my wife and I ended up thousands of dollars poorer, with no wedding album whatsoever.  However, as a ray of hope, we did eventually get the original negatives.

Scanning single-cut medium-format negatives is not for the faint of heart.  It can take 5-10 minutes per photo, and that’s without touch-up work.  We had 400 negatives.  ScanCafe seemed like our savior, with affordable rates and support for all sorts of negatives.  But could they be trusted with our only hope for wedding photos?  Our original negatives?

Fortunately, trust is exactly where LinkedIn shines.  I typed “ScanCafe” into the search box on linkedin.com, and was delighted to find out that an old colleague of mine actually works for the company.  I sent him a LinkedIn message, and within a week I had his assurances and help in submitting my order.

Last week, for the first time, ScanCafe posted the results on their online website for me to review.  It was truly an emotional moment.  Wonderful photos and memories captured and restored, and now, with digital images, the freedom to finally share and publish wedding albums.  As we speak, 81.4GB of high quality TIFF and JPG images are on their way to my house.

I don’t think I would have had the courage to send our precious negatives to anyone without a personal reference and assurance, and I never would have known I had such a close contact at the company without LinkedIn.

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