I regularly read a very good blog called 37Signals. They have a post that, in my opinion, perfectly describes what has happened to eBay. The MBAs have taken over the place. They do not sell on eBay (as a general rule), and while they may know business by the book, they don't understand the people who make the business tick.
Here's a quote from 37Signals from a post called The MBA Myth:
There’s a popular book on entrepreneurship called The E-Myth which claims that bakers shouldn’t run bakeries, plumbers shouldn’t run plumbing companies, and everyone else should think about how they could turn their small business into a franchise. On the face of it, there’s a lot of good advice about how you can’t just be a good baker if you don’t have a business bone in your body and expect commercial success.
Problem is that the reverse is also often true. If you just put MBAs in place — or other professional managers without deep subject matter expertise — you’re equally likely to end up with an uninspiring business that fails to be passionate about the right things. To stay on the ball you need to know what’s a good pass and the best way to do that is to be able to make one yourself.
eBay's "bakers" and "plumbers" are the small sellers in the trenches. They have valuable information to impart. But listening to the sessions at eBay Live! made it obvious that information isn't welcomed.
As an example, take a look at the way eBay Education focuses on "growing your eBay business". Most moms and pops I find in my classes are not the least bit interested in starting and growing a business. They just want to sell their stuff. It used to be that eBay was a great alternative to a garage sale, the hassles were less, and the prices were better. I still find my items bring good prices overall, but the hassles are mounting.
I don't believe eBay really wants to run small sellers away. The loss of small sellers is "collateral damage" as a result of eBay's bigger plans. Kind of like the bustling small towns and businesses that are bypassed and suffer when a new highway is built. Too bad - but that's progress. We're told it's for the good of the majority.
Humility?
Unfortunately for small eBay sellers, admitting a wrong course takes humility. Humility, it seems, is not widely taught within business schools. After all, what would it say about their expensive diplomas if a simple common-sense solution by a "commoner" proved to be the best one?
When a small seller in a midwestern town with nothing but a high school education challenges the decisions of top business school graduates - and that has been happening A LOT lately - what do you think will happen?
I think we're seeing it in action. (I hear crickets...)
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Thanks Mikal, that’s an excellent addition.
I suppose I’m beating a dead horse. But it is just fascinating to watch what is taking place with eBay. Ironically, someday it will all be a lesson in business schools.
Steve:
Noted business author and motivational speaker Guy Kawasaki talks about the notion of eBay’s MBA’s not selling on eBay in his book “Rules For Revolutionaries: The Capitalist Manifesto for Creating and Marketing New Products and Services.”
Here’s an excerpt:
“A second way to determine if you’ve passed the order of magnitude test is to see if you and colleagues have come to depend on the new product or service for you own success. Long before Macintosh was shipped, we were addicted to using it in our day-to-day work (for example, writing marketing plans) in the Macintosh Division. This isn’t just “eating your own dog food” but loving your own dog food and not wanting to eat anything but your own dog food. When your product or service passes these hurdles, you will find that the revolutionary gains so outweigh the minor and temporary crappiness that shipping is a moral obligation.”
Kawasaki got it right back in the year 2000 when his first shared these thoughts. Eating your own dog is critical to maintaining product authenticity, value, and the right type of scalability.
You know, I once worked for a company where I proposed making use of the company’s own products and services a mandatory requirement of employment, at all levels of the company. Since using the company’s products and services involved amassing fees from another company, I even proposed setting up a fund to reimburse employees’ fees (it amounted to under $10k per year if everyone participated).
I was laughed out of the room where I proposed it, and every other time I brought it up, I received a similar reaction. Executive-level leadership (of which I was a part of) was worried about the time it would take away from employees doing their jobs, which was exactly my point…
In order to walk one mile in our customers’ shoes, we had to know what they experienced. Since we had insider knowledge into the industry, trends, technological possibilities, competitor efforts, and more, who better than us–the people who worked at the company, in concert with our customers–to test the waters and see what works, doesn’t work, needs to be rethought, needs to added to the roadmap, and on and on and on.
No one but me, all the middle managers, and the front line employees themselves, saw value in doing this. Instead, the company spent thousands upon thousands of dollars on perks for the owners, unnecessary travel to conferences and trade shows that produced no material partnerships to speak of, facilities expansions that had to be subleased shortly thereafter, billboard advertising campaigns in the local community that netted zero gain for the company, ridiculous employee incentives, and other misinformed expenditures that led to staff layoffs and cutbacks.
Attracting beginner online retailers is the easy part. Getting them to sign up for an eBay account or for an eBay Certified Provider’s services is a little harder. The hardest part of all is keeping the customer beyond a trial period or 20-day window where they expect–because of how you marketed to them–instant results. How else can you possibly serve the needs of these types of customers if you do not encourage and support your employees in eating their own dog food?
In this line of business, you cannot expect reasonable and long-term results without a product development cycle that hinges on employees’ own use of your products and services.
Spot on! Very well written and I agree with your view. The consultants have taken over the assylum…
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