Life After eBay: An Interview With Meg Whitman

My Portfolio colleague Amy Wallace interviewed just-departed eBay CEO Meg Whitman for the May issue. Of course, only a fraction of the interview got in the magazine. So I asked Amy to share the rest here. Other than a few trims, here is the mostly unedited transcript:

Q. Two years into your tenure at eBay (EBAY), you said you'd stay for 10 years. Never heard of a CEO predicting her departure eight years in advance. But you stuck to your word. Why?

A. Ours is a business where the pace of change is dramatic. Technology change. Changes in competitors. Changes in the nature of the company. eBay went from 30 people to 16,000 in 10 years. And I just felt, even as long as eight years ago, that 10 years seemed just the right amount of time. After that, the company would need a fresh set of eyes, new leadership, someone who would have the same energy and enthusiasm as I did for the first 10.

Q. As the 10 year mark approached, did you have pangs?

A. You know, it felt like the right time. I had been thinking about it, obviously. I'd brought in some new executives to the company and was really planning for the future. Last year we did about $8 billion in revenue. Hopefully 10 years from now, we'll be a much bigger company. So I was trying to get the leadership in place to take the company through the next 10 years. So it was not that hard.

Q. You often responded to criticisms and complaints from users personally.

A. There is quite a personal relationship between the CEO and the users at a company like eBay. You have to remember, many of our users make their living on eBay. They have connected with people who share the same interests. When you talk to some of our top users, they will tell you that their relationship with eBay is more than a business relationship. You could argue we were the first social network. But eBay is community anchored in commerce. It's not just community for community's sake.

Q. What was the most unusual complaint you've received from a user?

A. Well, a big percentage of the user community has my email address. So I can get anywhere from 50 to thousands of emails a day. And because we are the locus of their economic life and also in some ways their social life, there is lots of commentary on almost anything that we do. And I think that's a good thing. We made the decision early on that it was better to have a community that really cared, that was really involved, that had a point of view, than to have a community that was not engaged.

Q. That requires you to have a varied set of skills, I'd imagine. What would you say are the three most important?

A. First of all the ability to scale an organization. People underestimate what it's like to take a company from 30 people to 16,000, from $4 million in revenue to almost $8 billion, from 300,000 users to 250 million users. You have to be able to scale with the company. The second thing is you have to be able to walk in the shoes of the customer. Many companies just have buyers. We have buyers and sellers and they have very different needs and wants. So you have to be able to manage that dichotomy. And then you have to be able to decide what is in the interest of the greater good.

Q. Your management style has been described as information gathering, not dictatorial. You've been called a consensus CEO.

A. You have to make decisions. What will kill a growth company is someone who can't make decisions. But you have to listen very hard, recognize which constituencies are speaking and then make a decision for the greater good.

Q. Are there any decisions you regret?

A. Particularly in the early days, at eBay we made more decisions in a week than many companies make in a year. There've been pricing mistakes over the years. User interface mistakes. There've been strategy mistakes. But we have listened hard and made the determination - we need to fix it. We're hearing a lot of noise but I still think it's the right thing to do.

Q. Give me an example of a strategy mistake.

A. The early days of eBay Motors. It was a big success, but we quite quickly made some user interface changes probably in the middle of 2000. And we did it without as much consultation with the community as we should have. We rolled a new UI for the Motors part of the site, and there was a massive uproar. That day I think I got 5,000 emails.

So immediately we made it so you could keep the old user interface or use the new user interface. If you built your business selling cars on eBay, you are not excited about a new user interface, even though it tests better and people like it.

Q. You've been given this window into how people think and behave. What have you discovered?

A. People are basically good. That is the key thing I've learned in the past 10 years: People are basically good. When we started eBay, you were going to buy something over the Internet from someone you'd never met, likely in a different state, maybe in a different country. You were going to send them money. And you were going to get the item. There was tremendous skepticism about this.

The investors who didn't invest in eBay at the IPO roadshow in 1998 didn't for that reason. They just looked at us and said, "I don't believe this is going to work." Their view was there will be tremendous fraud and theft and all kinds of bad behavior. It was quite the opposite. 99.99% of people did the right thing.

Obviously you have to be incredibly vigilant around trust and safety and keeping the .01% in line. But last year, our users traded nearly $60 billion in product in the marketplace and it's because people are basically good. It's not that all people are good. But people are basically good. And it's true in every country in the world. It's remarkable.

Q. What was your worst moment?

A. The site outage in June of 1999. I was not a technologist, so I had just really begun to learn the underlying technology that powered eBay. And so when the site crashed - it was down for 22 hours, then it came back up for eight, then down for eight. The darkest hour was when the engineer said to me, "I'm not sure we can bring this back up." Because we had corrupted the entire backend data base. That was not perfect. (Laughs.) And there was nothing I could do other than be a cheerleader and a coach to the technology team.

We had CNN parked outside the building wanting an update on the status every 60 minutes. The parking lot turned into a media campout. Every hour I had to go out, looking more tired each time.

It was a real growth opportunity for me because effectively what I did is I moved into the site operations center for almost the entire summer. I literally camped out there. I said to my assistant: "Go get cots, sleeping bags, pillows, toothbrushes, toothpaste, razors for the guys, because we're going to be spending a lot of time here." It was a crash course in technology which has served me in good stead since.

Q. You really slept on a cot?

A. Oh, yeah. For multiple nights. In some ways it was a bonding experience. And if I was there all the time I could demand the best help from our vendors. And I will tell you, Sun (SUNW), Oracle (ORCL), Veritas (VTS), all sent their very best people into battle with us. So it was in some ways just leadership by being there.

Q. Your acquisition of Skype for $2.6 billion in 2005 has been controversial. Will it ever pay off?

A. What we loved about Skype was the disruptive nature of the technology and that it was one of the fastest growing web properties that we had seen. In fact, it just finished its fourth year. It is bigger after four years than eBay was, than PayPal was, than Yahoo (YHOO) was, than even Google (GOOG) was. We thought there might be some synergies with eBay and PayPal and we decided we would place a bet on this new company and new technology that we thought held tremendous promise.

And there's no question in the first couple of years we struggled with management. We struggled with integrating a company in London into San Jose. And ultimately last year we made a number of changes. We bought out the earn-out, changed out management. It will be interesting to see, but I think we will be proven right here. This is a tremendous technology. We were early. But I think we will end up with a very valuable asset in the eBay family.

Q. And when you say proven right, do you mean cash will start flowing in?

A. It will become part of daily life. It will be a very big and very profitable company that will justify the price that we paid for it. And you can start to see it: Oprah did a whole segment on Skype. When you move into Oprah, you have crossed the chasm and gone mainstream.

Q. What of the whole idea that buyers and sellers would use Skype to talk to one another?

A. It has not worked out as well as we had hoped in part because we had some trouble integrating this very entrepreneurial company based in London with big eBay here in the United States - especially with the original entrepreneurs running it. Now, we have eBay people running it. The new president of Skype is a longtime eBay exec. So stay tuned.

Q. eBay has been criticized over the years for providing a platform for heinous commerce - whether its Nazi memorabilia or a serial killer's shaved calluses.

A. "Murderabilia."

Q. Thank you. What sort of soul-searching did this prompt in you?

A. eBay was originally founded with the notion that if the item was legal for sale in the country in which we were doing business, then it would be legal on eBay. And that's pretty much how the company ran up until the first quarter of 1999.

In the first quarter of 1999, there were a number of issues that caused me to say: is this something that we want? The very first categories of items we decided to ban were firearms, alcohol and tobacco. All were legal for sale over the internet in the United States. But we made a decision that while they were perfectly legal, they were not something we wanted to be involved in.

Frankly, it's a judgment call. Our community of users pushed back on this, not because so many of them felt selling firearms was a great thing, but they were worried, well today firearms, next week maybe my category. There is now an eBay lookalike site that does nothing but sell firearms.

I said I understand that. But we are a big company. We are building a brand. We want to be admired and around for generations. And it is the CEO who has to make those judgment calls. So over time, we'd make incremental calls - Nazi memorabilia was one. Perfectly legal for sale in the U.S. Not legal for sale in Germany or France. Ultimately we said: not a business we're going to be in.

Murderabilia - the catalyst there was Jeffrey Dahmer's refrigerator. I said, you know, not sure we want to be in this business.

Q. Dahmer's refrigerator?

A. I had gotten emails from customers not only about Dahmer's refrigerator but autopsy photos - the whole category of items around murders - so-called "murderabilia." And we heard from victim's families. The team talked about it and decided we don't want to go there.

Q. So historical items are okay - Lizzie Borden's hatchet say. But items that might cause pain to people still alive are not?

A. Right. There are nuances to this. On the Nazi memorabilia, what do you do about Mein Kampf? Do you want to be in the business of censoring books? And we decided: No. Do you want to ban stamps from the Third Reich? Probably not.

Q. What have your conversations with Pierre been like about your departure?

A. We're very close friends. We've known each other for 10 years. Of all the CEOs in the Valley, I drew the prince of a founder. When I met him he was 29 going on 40, with a calm and depth of perspective that is very rare for a computer scientist under 30 in Silicon Valley. So when I told him that actually in fact we were going to stick to 10 years, he said, I've been hoping this day would not come. He is so wise that he understood why I thought it was the right thing for me and for eBay.

Q. John Donahoe, your successor, is facing a host of challenges in keeping the brand competitive. What do say to those who say Meg was the perfect person to grow the company, but not to run a huge company?

A. As CEO you have to be on top of all the changes all the time. If you look at the 10-year record, one would have to say it was a pretty good 10-year record with a very high batting average. It was also the reason that I felt 10 years was the right time. I think you DO need a fresh set of eyes, a new perspective, and that same 24/7, 365 days a year, 150% effort. And I thought it was the right thing to turn over the reins. I hired John three years ago. He's been running the eBay business for 3 years. He knows the people, the challenges, the brand. So he is stepping into a situation he knows well.

Q. What sacrifices have you made as a wife and a mom?

A. For the past 10 years, I've really tried to do three things as best as I could. One was eBay. The other was being a good mom to my kids, who are now 22 and 19. And the third was to be a good wife to my husband. There were lots of other things that just didn't get done. We weren't particularly social. We went out on the weekends only when we could bring the kids. I have a lovely home, but it doesn't necessarily look like Martha Stewart just left. I wouldn't say that I'm a fashion forward executive. There was no time. Something had to give.

My husband deserves a huge amount of credit. He has been a incredible team player. He's a neurosurgeon, so there was lots of pinch hitting. He took responsibility in many ways for running this household for the last 10 years. And households do not run themselves. The boys got quite used to the fact that mom would, from time to time, be interrupted.

Things like this happened a few times: we were all set to go to Yosemite for the weekend and I was in the process of interviewing new chief technology officers to help solve our technical problems. So the guy we ultimately hired, Maynard Webb, flies up from LA where he was at Gateway. I said to my family: OK, we're going to get in the car, we're going to drive to the San Jose airport, I'm going to interview Maynard for 45 minutes and then we're going to keep on driving to Yosemite. And my husband and two boys sat in the car in the parking lot at San Jose airport for an hour. That's the kind of thing that from time to time just had to happen.

In many ways, being married to a neurosurgeon - when you're in residency training, when you're on call, the phone rings all the time. All night long. My husband was on call this weekend. The phone probably rang 50 times on Saturday and 60 times on Sunday. I'm married to someone who understood that when you were on call you were on call. He was remarkably supportive and I'm not sure I could have done this had he not been.

Q. Have your kids ever reflected on the impact on them? They'll probably marry very strong women.

A. Or the opposite! (Laughing.) I've worked since they were little. They've never known their mom not to work. So it's part of the fabric of their upbringing and I think what they'd tell you they appreciate is they have been to parts of the world and they have been exposed to people that they would never have met. And they have an exposure at a young age to things that I didn't. I think they would tell you the negative is that sometimes they had to share their mom a little bit.

I am quite grateful that I don't have a Blackberry. Kids know about Blackberrys. I have colleagues who have little children who actually take their parents' Blackberrys and hide them. One of the things I really tried to do is when I was with the kids, I was with them. I tell my friends: when you walk in the door, turn it off.

Q. So you do not own one?

A. Nope. I said I cannot bear it. Talk about 24/7. And the good news is, being the CEO, if something really bad is happening, they will track you down. Sometimes I have to turn off the cell phone too, though it's usually with me and usually on.

Q. Are you going to run for California governor?

A. I've heard the rumors too. What I am focused on right now are a couple of things. One, eBay has first call on my time through 2008. I will be on the board and Pierre and the board are very anxious for me to make sure this transition goes well. I'm anxious for the transition to go well. I'm available to John at a moment's notice.

The second priority is to our family foundation, which is funded, yet it doesn't have a mission statement. We don't have a system yet for how we're going to make these grants, how we're going to measure them. We don't have someone yet to run the foundation. So I would like to spend a lot of 2008 really focused on that. And I still sit on the board of Procter and Gamble (PG), DreamWorks, obviously eBay. And then I'd like to have a little time to power down.

I totally enjoyed my time working for Mitt Romney, who was a 30 year friend. It was great fun. I hadn't been politically active. But my focus remains: eBay and the family foundation. And it's pretty funny -- my husband the other day I came down for breakfast and there was a "To Do" list he'd left for me.

Q. What was on it?

A. The pool cover is broken. Could you call the pool cover guy? And six other things that he would have historically done that he said, I'd just love it if you'd do them.

Q. A hypothetical: Carly Fiorina, who McCain has just named to his fundraising committee, is also rumored to have political aspirations.

A. Yep.

Q. If you ran against Carly for governor, who would win?

A. I can't answer that question. I've known Carly for years, I have tremendous respect for Carly. Carly was an inspiration to a generation of women. I remember when she was made CEO of Hewlett Packard (HPQ), all of us were cheering on the sidelines. So she is an excellent speaker and was an inspiration.

Q. What's your user name?

A. I don't release that, for obvious reasons.

Q. What have you bought and sold over the years?

A. Lots of things. Almost everything we're going to buy, I try to check eBay first. The preponderance of items we've bought tend to be in the consumer electronics or sporting goods categories. We got virtually all the kids' sporting goods on eBay. Everything from cleats - I just bought my son a pair of rugby cleats on eBay. And then we sold a lot of their sporting goods over the years.

We bought most of our computers, laptops, TVs - that big TV was bought on eBay 7 or 8 years ago. We have a couple of flat panels upstairs. They were bought on eBay. That lawn furntiture out there. Some of our collectibles. Those two white pots the orchids are in. We have a condominium in Telluride, Colo. Virtually all the kitchen equipment was bought there. Over the years we sold things we don't need.

Q. You've often been described as being "nice." Campaigning for office is anything but. If you decided to go into politics, do you think you could roll with that?

A. You know, I think the attribute of being a nice, high-integrity person is a good thing - in politics, in business. It's a good thing as a stay at home mom or as a doctor, lawyer, Indian chief. It's one of the things I'm most proud of at eBay. Whenever I meet people who deal with our employees - just yesterday this happened, a woman told me, "Your people were so nice and easy and competent." I hear that from almost every vendor, every partner. I think that's a very good thing.

Q. Do you feel like you've gotten particular scrutiny or faced criticism at times because you are a woman chief executive.

A. I think I got a little more attention as the head of eBay as a woman than I would have gotten as a man. The interest level was higher. My point of view on this has been: it kind of is what it is. There's no changing it. From my earliest days, when I first graduated from Harvard Business School, I just decided I was going to put my head down and do the very best job I knew how to do at whatever I was assigned to do. And that was the only thing I could do. Do the very best job I could. Be fun to work with. Be easy to manage. Because when you're a senior leader at a company, when you have two people of equal competence and you have somebody who's easy to manage - you'll pick them every day of the week over the hard to manage person.

Q. When you talk about powering down, is there a particular closet you're going to clean?

A. I would be delighted to show you my pristine garage. Two weekends ago I completely cleaned it out.

Q. Could you fit a car in it before?

A. It was challenging.

I'm working my way through the house. First was the garage. Last week was the office. We cleaned out 10 years of stuff from the office. Now it's a mess again because my other project is I'm sorting through 10 years of family photographs that have been in boxes. Were going to get them all scanned and store them all digitally. Then, I'm moving up to the master bedroom. Then, after we get done with the master bedroom, we're moving out to the poolhouse. Those are the kinds of things that don't get done. Frankly, whether the garage is clean or not doesn't actually matter. It certainly doesn't matter to the kids. But now that we have the time, it's kind of nice.

Q. You've given a lot of money to Princeton. Could you imagine being involved in higher education in some more formal way?

A. Maybe. I sat on the board at Princeton for four years. That might be a board that might be fun to go back on. I love Princeton and loved my time there. Stanford Business School is right here. So that would be fun as well, maybe to teach a course in entrepreneurship of something.

Q. But you've worked for your last corporation?

A. I have said I do not think I will do another business job. I can't imagine it could be more fun, more interesting. This was a once in a lifetime opportunity.

Q. You might get bored of cleaning the garage.

A. It was really fun when I did it.

Comments

[Tippie:]

eBay stock has been a real loser these last 3 years!
Meg cashed out at $40.00 bucks a share before she retired. lol. Planned sale my ***...lol... They ran up the price per share with eBay share-buybacks up to $40.00 ---She sold millions of stock at profit and then her stock dropped like a rock again!

She ran this stock and company into the ground.
PS....The rich always feel privy to money and everything else they can get their hands on...To hell with her stock holders who are also trying to EAT.

Gary said it best on his blog! Where's my money Jack?

Meg's poor loser stock holders can do nothing, but wish this woman an early heart attack!

2008 Apr 22 12:29 PM

[EmptyPocket...:]

Meg professed to be Philanthrophist.... while she made known the huge donation she's made to the Princeton University...and yet .. there's starvation, hurricanes, the New Orleans Disaster.. etc etc...
Her heart is made of stone, and the most important thing in her life is money and Power. It's a shame John McCain will suffer for having her at his side...
as for running for Governor of California- sure she has every intention of it... if she doesn't make it as McCain's VP nominee (which will never happen) as for california... You've seen what she's done with "ebay","Paypal","skype... -Suing 'Craigslist' and several other projects she's put her hands into. Just before she 'OFFICIALLY RETIRED' .. it appears that she (and the rest of CEO's of ebay )diligently (and probably still is ) Global ecomonic disaster. Can you imagine what she'd do for this country? OHHHH MMMMYYY...

2008 Apr 23 08:52 PM

[EmptyPocket...:]

*** AND MOST OF ALL - THE BLUNDEROUS MESS SHE CAUSED BY BUYING "SKYPE".... SHE'S QUITE THE 'LADY' ... ISN'T SHE..?
I WONDER HOW MUCH TIME SHE PUT INTO HELPING THOSE IN NEED IN NEW ORLEANS... ?
BUT LIKE EVERYTHING ELSE... IT WILL SURELY ALL COME OUT IN THE WASH...

2008 Apr 23 08:57 PM

[Trish:]

hmmmmmmm...I'm just wondering what would make you think that anyone even cares about Meg Whitman's life...before or after leaving ebay.

2008 May 04 07:24 AM

[Trish:]

I forgot to add that Ms. Whitman's comments about niceness being only for housewives and certain profressions to be rather crass. And, I'm SURE that the reason her husband stays away so much is NOT because of his busy schedule, but because he just can't stand her...much like the rest of society!

2008 May 04 08:41 AM

[LayLaJaded:]

You go girl!!!-Past & Present!! Wonderful CEO in my opinion!!!! Have Great Respect For!! Sad To See You Leave!!

2008 May 12 01:06 PM

[Gabo:]

She is one of a kind!!!
From 30 employees to 16,000!!
From 4M to 8 Billions!!
She is one of a kind!!

2008 Jun 09 10:44 PM