eBay Needs Incremental Improvements Not "Tech-Led Re-Imagination"
eBay's "tech-led re-imagination" ran into a brick wall when they couldn't run a simple earnings call without major technology issues.
Symbolic?
Here are a few points:
eBay has been led by the financial wizards the last decade. Free cash-flow at the expense of innovation, investment, reorganization and growth.
6 months into a new CEO, I don't see anything even on the horizon the suggests otherwise. Classifieds is moving out. Managed payments is slowly progressing.
Adding AI to seller listing flows - ? I think what he means is that their listing process is horribly antiquated relative to other off-price marketplaces.
I am sympathetic to the "lead bullets" theory of management brought to the forefront in one of my favorite management articles from Ben Horowitz. It's very similar to my own. But not at the expense of risk-taking and vision. There is a place for both.
Richard Kramer asked the key question - just what in the hell is a tech-led reimagination in the face of declining R&D spend? What eCommerce technology organization thinks like that?
Hunter Nelson shared a sobering perspective: “I mean eBay still has a powerful search engine presence. In my opinion that product/company is at the end of its life cycle. Why not coast it down with minimal maintenance over long period of profitability? It’s not like they are going to innovate to the point where they upend Amazon and become the primary e-commerce destination. Trying to would just be a waste of cash.”
David Weissman weighed in, adding: “I think eBay is stuck and has been stuck for more than a decade. The current business is big and profitable but it’s also built on antiquated technology that’s likely full of spaghetti code and ancient paradigms. Hard to make things anew on top of crap technology that’s too far gone. Rebuilding seems daunting, expensive, and risky. And the leadership team has never wanted to dip into the cash cow to think about the long term. Think of all of the businesses that have passed eBay by that they could have easily owned.”
Enda Breslin responded to this, saying: “Many companies have sub par technology, and still succeed. But technology doesn't build or update itself. People do that. And eBay hasn't had the leadership to attempt anything radical. In my time at eBay Enterprise…I found eBay to be a fantastic, people-friendly employer, but missing "drive." They had no big plans or ideas. They ignored and under estimated the amazing asset they acquired in GSI Commerce. When you think about it, one decade ago eBay spent $2.4bn on GSI to do that Shopify is doing at great cost with Shopify Fulfillment Network today.”
Alex Wilson proposes a shift: “The big problem is that other companies have taken huge chunks of their business away. Venmo took huge chunks from PayPal, Facebook Marketplace pulled business away because it was easier to get stuff locally, Etsy stole the handmade market. So what's left? What's their unique value? What can they do that no one else can? Not much. So I don't think it's time to focus on the core, I think it's time for a pivot.”
Doug Smith has a more optimistic take - adding “Every platform will admit their backend core code needs updates. That's why new stuff breaks. But the key is to have people working with sellers who sell, know sellers, know the platform, know other platforms, and know e-commerce. Every seller who is serious is going to sell across the board on many platforms. They also need more people who are not "yes" people, who will push the boundaries and be more accountable.”
It's clear right now, the formula is simple. Focus on the core. Make incremental improvements. Keep increasing margins and cash flow. These are not obvious mistakes. But they are not exactly big bets either.
