When I graduated from business school at age twenty-three, I decided I needed to be taken more seriously. So I started calling myself Margaret. Okay, not exactly an extreme makeover. But every time I said it out loud, it didn’t feel right. The sound of me saying it made Griff wince a little. Thankfully, my “serious” phase lasted all of two weeks. My mother is Margaret, but I had always been Meg. I’m still Meg. If I wanted to be taken seriously, I realized, I needed to focus on my performance, not my name.
I believe all of us have a built-in authenticity detector. It sends a little shiver of connection through us when a person says or does something that seems true to his or her nature. And it buzzes in a negative way when a person says something that comes across as false or forced. So when we are attempting to do something significant and inspire others to help us, our actions must reflect our true desires and values. Most successful people I know have a deeply authentic quality; what they have chosen to do in life aligns with who they are. The most effective executives model and live the same behaviors they demand of their organizations.
As we’ve discussed, there was no manual for how to organize or run a virtual marketplace such as eBay. We were constantly confronted with situations and dilemmas we had never imagined in our wildest dreams. It’s precisely in those circumstances that doing the right thing matters most. That’s when we must stop and ask ourselves: “Who am I? What do I stand for? Are my actions aligned with what I say are my values? Am I demonstrating integrity here?”
When I think about the lessons my parents taught me, the importance of integrity is at the top of the list. As I have said as often to my colleagues as to my sons, “If you are about to make a decision and you learn your mother will read about it on the front page of the New York Times tomorrow, will she be proud of you? Will your rationale make sense to her? If not, give it some more thought.”
There was another dimension to what my parents both taught and modeled for me about integrity—one that was less simple but equally important: You will not always know the answer to every dilemma immediately. Values and choices can evolve. You don’t have to take rigid positions and never let go no matter what. Having integrity means, among other things, listening and incorporating new information. This lesson would later be critical to the development of eBay’s character as a company.
I mentioned my mother’s trip to China and how it changed her life and mine. What came from that experience was her new appreciation for the importance of every individual pursuing his or her own course. Here is how it played out.
From a young age, my brother, Hal, was focused on becoming a doctor, and neither he nor anyone else seemed to question that that was his calling. I remember Hal as a very kind older brother, never dismissive or aloof like some teenage boys could be to their younger siblings, and he did indeed grow up to become a wonderful physician. I get to see him in action these days, as he, I, and our sister have formed a good team to take care of my mother, whose health issues have created a lot of physical challenges for her that we all do our part to help ease. Hal, who is a rheumatologist who practices in the New Jersey area, reminds me of my dad in many ways—he’s a patient and good-natured person, deeply empathetic, a wonderful father to his twin sons, a conscientious family man.
There were no particular career aspirations laid out for my sister, Anne, and me, on the other hand. We both were good students (Anne studied at the University of Pennsylvania and later at Harvard), but my mother’s attitude was that we’d probably be getting married, and then raising a family would be our primary concern. She did encourage us to get our teaching certificates, though, mainly so that we would have something to fall back on in case marriage didn’t work out. Teaching seemed to her a good option that would motivate us to do well in school and provide a decent income.
I have no memory of questioning my mother’s advice about that. I was a very strong student; I finished high school in three years and graduated as one of the top ten students in my class, and I planned to spend what would have been my senior year of high school in France, in hopes of becoming fluent in the language. But the idea that I might become a businesswoman or anything in particular was not something I thought much about. By the spring of my last year in high school, my exposure to the working world had been a summer I spent as the snack bar cook at a dude ranch near Cody, Wyoming, where I had gone to summer camp for a couple of years.
Adventurous as my mother was, she did not spend a lot of time challenging the prevailing social mores. She seemed to just accept that a woman’s interests and education were likely to give way to her role as a homemaker. My mother once told me that my father did not realize until a couple of years after they married that she had gone to college. “It just never came up,” she said—something I find utterly baffling. She was adamant that I get a good education, but her primary expectation was that I would marry and have children, with a teaching career as a sort of backstop.
Until she went to China.
In her book about the trip, You Can Get There from Here, Shirley MacLaine wrote this about my mother: “Among all of us, Margaret Whitman had been the most resilient. She had remained cheerful and energetic throughout the trip, revealing very little of the inner confusion she must have felt. The key to her self-control lay in her background. ‘To control oneself under any and all circumstances was how I was raised,’ [Margaret] said. ‘But now I think I’ll cut loose and really swing. I’ve decided I never really was a conservative person. I just thought I should be because everyone around me was.’”
I would not describe my mother’s homecoming or post-China life as one of a “swinger,” and she remained a rock-ribbed Republican, but I love the thought of my mother discovering her desire to follow her interests and curiosities at middle age. This trip was so exotic, so eye-opening for her. She had encountered women doing so many interesting things—not only the women in China, who were training for the same array of jobs as men, from airplane pilots to physicians, but the women in the delegation, especially the film production crew.
I think the trip prompted her to think about opportunities she had not perceived as existing for her when she was younger. After she returned, my mother sat down with Anne and me and said, “Because of this trip, I’ve seen women doing all sorts of marvelous things. Be a teacher if that’s what you want to do, but realize that you’ll have the opportunity to do anything, and you should do what you want to do.” Because my mother had such a deep sense of integrity and honesty, she could adapt, incorporate new ideas, change her mind about what represented the best advice for us.
My dad once did a similar thing. He had smoked for many years, but when it became clear how harmful smoking was, he quit. And he took each of us kids aside and said, “I made a big mistake smoking for so long. I don’t ever want you to smoke, because it will hurt you. If by the time you are eighteen you don’t smoke, I will give you $1,000.” He didn’t try to cover up what he had done; he admitted he had made a mistake, focused on the danger of having set a bad example, and corrected it by setting a long-term goal for us. None of us ever smoked.
Of course there are absolutes. Lying, murder, cruelty, cheating on a partner, or harming others is always wrong. But in more complicated arenas, what represents the right thing to do sometimes evolves over time. Determining the right thing to do and adhering to values is not a stubborn undertaking. My mother had the confidence and sincerity to come to us and say, essentially, “Before I went on this trip, I thought I was giving you the absolute best, most helpful advice. Now I have new perspectives and I’ve revised my thinking, so I need to share that with you.”
Bolstered by Mom’s newfound enthusiasm for a world of possibilities, I set out to figure out just what my authentic passions would be. I started out in premed at Princeton. But I soon discovered that organic chemistry and I were not destined to make each other happy. Over time, instead, I found that I enjoyed economics, with its blend of math and its ability to describe real trends and human behaviors. And then I took a job selling ads for an undergraduate magazine at Princeton called Business Today. It was started by Steve Forbes, the son of Malcolm Forbes, founder of, yes, Forbes. I heard they were hiring advertising sales reps, so my great friend Meg Osius and I (our friends dubbed us “Meg-squared”) signed up. From the beginning, selling ads flipped some kind of switch inside me. It appealed to my gregarious personality; I loved meeting and talking with businesspeople. And I liked that your success was generally a direct consequence of how hard you worked. You might be smart, creative, personable, and forward-looking, but what you needed most was an intense determination to cross that goal line and make the sale. I found that invigorating.
Meg and I once took a trip to Milwaukee to sell ads, and I came down with the flu. We had four or five meetings a day scheduled and there I was with a 104-degree temperature. In between meetings, I would lie down flat in the backseat of the little car we rented. Meg was determined not to go in alone, so at each stop I managed to crawl out of the back, comb my hair, focus on the sale, and do the meeting. Invariably, I felt better once I got in there. Then, as now, I found that doing business and achieving specific goals energizes me. It resonates with my personality, my curiosity, and my competitive nature.
Before long, I couldn’t imagine pursuing a career in anything but business. One of my grandmothers used to throw “come as you wish you were” parties, and during my senior year, my roommates and I decided to throw one of our own. My roommate Carol Wallace came as the queen of England. Carol later cowrote the best-selling The Preppy Handbook, a tongue-in-cheek jab at the upper classes. Another friend, Nancy Broadbent, came in a kimono; she would later go to Japan and teach English. And my dear friend Linda Francis, whom to this day I have labeled in my mind as “the best mother in America,” came as—what else—a mom.
I borrowed a male friend’s three-piece suit, tie, and glasses and came as a business executive. I guess that sealed my fate.
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SOMETIMES MY FRIENDS and I had trouble figuring out what it meant to be our authentic selves in a culture that was changing so rapidly for women. I was a member of the fourth coed class at Princeton, and women made up only a small fraction of the student body. The administration, the faculty, and the male students seemed to have no problem having us there. Yet odd resentments cropped up. During my years there, the Princeton alumni magazine ran letters from alumni who were still seething that the trustees had “ruined” the traditions of Princeton by allowing women to enroll. What an outrage that women were siphoning off resources intended to fully educate young men! It seems absurd today that such letters were taken seriously. I almost cannot imagine the thinking of the letter writers, some of whom surely had daughters of their own, in expressing such an old-fashioned position.
As my Princeton graduation approached, I applied to business schools. Many years later I gave a speech at Stanford University’s Graduate School of Business, where the dean introduced me in glowing terms and said that his only disappointment was that I had not chosen to go to Stanford’s GSB. “Well, I didn’t get in here,” I shot back; the dean blanched and the room erupted with laughter. But I did get into Harvard Business School, where again I was in a small minority of women. Even more daunting, I was younger than everybody else, having graduated early from high school and applied right out of Princeton. My first year of business school I lost twenty pounds that I did not need to lose from the sheer effort of working to compete.
At my first job after Harvard, at Procter & Gamble, I believe there were four women out of more than 100 people in the brand assistant class. And then three years later, when I joined Bain & Co., I was one of just a couple of women in my office.
I mention all this because I am often asked about my experiences as a woman in business, and I must admit that I always find the question a little difficult to answer. To begin with, having never been a man, I don’t have a good point of comparison about how I was treated. I was never conscious of any overt discrimination that held me back in business. However, early in my time at Bain, I worked with a group of ambitious young men who seemed to be part of a club, and I did have some sense of not really belonging. They were bonded by their families’ expectations for them and by their own expectations of a traditional businessman’s life. I felt like a valued member of the office, but I was married to a surgeon and it undoubtedly irked some of my compatriots that they were competing for the best assignments with someone who might well drop out to have children or who did not “need” to work, as people used to say. As the odd one out, I guess I faced a dilemma many other women have faced: To what degree do you bend your life to fit the culture of an office that doesn’t necessarily suit you? And to what degree do you stay true to what you really value and who you are and what you want to do? This wasn’t a grave burden for me, but it was a dilemma nonetheless.
When Griff and I married, he was twenty-six and I was twenty-three. Throughout the early years of our marriage, he worked the brutal hours of surgical internship and neurosurgical residency. During the first six years, there were months when he was on call every other night—forty hours on and eight hours off—and during the one weekend in three he was off, what he needed most was to catch up on his sleep. We had very little time together, and so when he had some rare time off, the last thing I wanted to do was be on the golf course or socializing with colleagues from work. However, I could see that those times often provide opportunities to get to know team leaders or other colleagues better, and that can be crucial for being in the information flow of an office. I didn’t want to be “one of the boys;” I just wanted to be in on the good deals, get the information I needed, or get the boys to work with me instead of at cross-purposes.
What I decided was that I would not make being one of the in crowd my goal. I would just try to be “in with” the in crowd. There’s a difference. I didn’t try to be like them; I just tried to be likeable and fun and very good at what I did. I believe that it’s important to be fun to work with and easy to manage, but you can’t just be likeable. You also need to produce. You have to excel at the tasks you’re given and you have to add value to every single project, every conversation where someone seeks your input. I had to be true to my authentic self—not try to be something I wasn’t, but figure out a way to work with people who weren’t like me for whatever reason, whether they were men, or highly technical, or from another company that saw a consultant as threatening and not to be trusted. Learning that early in my career made all the difference. I prospered at Bain and I was proud that I was able to do that without being something other than what I wanted and needed to be.
I can’t remember if the phrase “work-life balance” was in use in those days; certainly early in my career nobody ever gave much thought to helping fathers balance the demand of work and family. It seems to me there still was some expectation that many women were going to leave the workforce once they had children. But as busy as we were with our careers, as much as we loved our work, both Griff and I deeply wanted to have a family. And as it does for many energetic young couples, the decision to have children launched us down one of life’s most unpredictable paths. One of the first steps was one of the scariest episodes of my young life.
In early 1984, Griff and I had flown to Birmingham for the weekend to see his parents. Sunday night he’d flown back to San Francisco, while I flew to Shreveport, Louisiana, to meet up with my Bain case team member, Dave McCarthy. Our assignment was a project for a Shreveport, Louisiana–based hospital. What nobody but Griff knew was that I was seven or eight weeks pregnant. We got to the hospital and Dave needed to make a call (this was before the cell phone era), so we walked to a bank of pay phones. As I stood there, a sort of fluttery wave suddenly washed over me.
I then passed out cold.
Dave tells me that one minute he glanced over and I was fine, and thirty seconds later I was sprawled on the floor. He quickly got help for me, and when the nurses revived me, the first thing I said was, “I’m pregnant.” I recall the nurses looking at each other and calling for a blood pressure cuff. My blood pressure had completely collapsed. Minutes later I was in the ER and the doctor was explaining that I had an ectopic pregnancy and that my fallopian tube had burst. I was bleeding internally and needed emergency surgery. I asked Dave to call Griff, as well as my in-laws in Birmingham. I remember waving to Dave as they rolled me off to surgery and knowing that he would take care of what needed to be done.
When I emerged from surgery a few hours later, there were my in-laws. A few hours later Griff was there, too, thanks to Dave, who had booked him a flight before even talking to him.
An ectopic pregnancy is a frightening experience, but fortunately I healed quickly, and before long, I was pregnant again. Naturally I was a little nervous, but everything went fine this time around. Little Griff was born in San Francisco in February 1985. I had a wonderful maternity leave of three months, learning to care for my son and pushing him around the Bay Area in his stroller on lots of sightseeing outings with other young mothers. As the end of my leave approached, we hired a wonderful woman to care for him and I prepared to go back to work. I cycled through a lot of the emotions a young mother has when she has been thunderstruck by an adorable baby but also feels the pull of a job and a career she loves. I was fortunate that we were able to find a loving, mature woman who shared our family’s values to take care of little Griff.
I remember on my first day back from my three-month maternity leave, the managing director of Bain handed me an assignment and my mind went blank. I simply could not remember how to do the analysis he had asked for. It was like parts of my left brain had fallen out and been replaced with pale blue flannel and fuzzy teddy bears. After my initial panic subsided, my analytical muscles firmed up. My husband and I gradually figured out the math of two working parents and a baby, and we achieved equilibrium—for awhile.
Then I became pregnant with Will. The pregnancy was going along fine until about six months along, when I started leaking amniotic fluid. I was ordered to full bed rest (lying flat, not even sitting up; I could go to the bathroom but not take more than one shower per week). At first I actually tried to have some Bain team meetings in my bedroom, my colleagues gathering awkwardly around the bed. That didn’t last, as two-and-a-half-year-old Griff would keep popping up and crawling into bed with me, demanding to watch Lady and the Tramp. I finally surrendered to meeting-free full bed rest; I learned the dialogue of Lady and the Tramp pretty much by heart, and Will arrived in good shape to join his big brother.
Now, here is some math that every mom understands: two kids are more than twice the work of one, especially when one is a toddler. I will not try to pretend that there weren’t moments that made me wonder if I really could make it all work. It’s never easy to find balance in life. Some women who have children and who have succeeded in business or public life say, “It’s fine. Not a problem. I have help and it all works.” I was fortunate to have the resources to have help, and I can promise you, it still doesn’t always work.
When little Griff started preschool, I got a call from a woman who lived near us in San Francisco and wanted to set up a car-pool. She was very friendly and said, “Well, I can drive Monday and then maybe you could take Tuesday, and this other woman near us could take Wednesday.” I was a consultant at Bain and still traveling occasionally. I said the arrangement sounded good and would work most of the time but that I traveled once in a while for work and that my husband had a very early start on his surgeries. “There may be times when the woman who takes care of little Griff drives the carpool,” I told her. “Is that okay?”
“No,” she said in an icy voice. “I did not quit my job as a banker to stay home and take care of my children so that I could hand them over to someone else’s nanny.”
Wow. Had I really asked her for such a terrible concession? Did she honestly believe I was putting her child at risk? She seemed to take this as some kind of rebuke of her choice, though that’s not at all where I was coming from. I think every mother can understand how and why this conversation ate at me for a very long time. We have to follow our own instincts in these situations; what works for me may not at all be the right solution for someone else, but we get nowhere by attacking each other. There are days when a working mom is miserable to have to leave her children; there are days when a full-time mom desperately craves adult conversation and challenges outside the home. The needle rarely settles on the “perfect” setting for more than a day at a time. Flexibility and a sense of humor are the only salvation.
Like many of my friends who look back on the days when they worked and had young children, I sometimes marvel at the energy it required for us to keep everything in balance. But team Whitman-Harsh pressed on, and over time we got back to a manageable equilibrium. My Bain colleagues were generally supportive and understanding—as long as I figured out how to get the work done. I, in turn, became more efficient—less watercooler chatter, laser focus on the day’s agenda and deliverables. I still managed to laugh and have fun with my team, but barring full-blown emergencies there was a five-thirty hard stop at the end of my workdays; I had to get that work done, and I did. Sometimes being extremely busy and motivated to finish your work and get out that door makes you more productive and intensifies your concentration. Ultimately, the Bain culture was organized around results and full of smart, reasonable, fun people, and it fit me perfectly. I was promoted to vice president.
I have been asked so many times about being a woman in a man’s world, and about how I dealt with sexism in the workplace. My short answer is that mostly I just focused on delivering results. I think that attitude was not uncommon for my generation of working women. My women friends and I had a sense that we were getting opportunities that previous generations of women had not, and we were determined to prove ourselves. It was not at all that we didn’t care about equal treatment for women; it was more that we had a sense of not wanting to show weakness. We did not want to appear vulnerable to rivals who might say, “See, they aren’t tough enough. They can’t handle the heat.” Many of us chose to focus on the work, on outperforming those who seemed intent on making our lives more difficult, rather than talking about sexism or fighting back directly. We had a sense of needing to prove our competence. Within a few years the numbers of women in the professional workplace increased, and of course we demonstrated ourselves to be just as competent as our male colleagues. Many women became more aggressive about identifying and trying to root out behaviors in the workplace that were inappropriate, which I think was a natural evolution.
Eleanor Roosevelt once said that no one can make you feel inferior without your consent. Be who you are, but don’t be too quick to take offense. One of the most helpful tools I used whenever I faced any kind of put-down or thoughtless remark in this arena was a sense of humor. Nothing better disarms a person who is trying to attack you or make your life difficult (or even just being thoughtlessly rude) than the ability to smile and the refusal to get ruffled.
One of the funniest experiences I have ever had was in 2000, the first time I attended what has become a very famous meeting of CEOs, politicians, philanthropists, and investors in Sun Valley, Idaho. It’s called the Allen & Co. conference. There are a lot of very interesting individuals from business and other fields who attend: Warren Buffett, Bill Gates, Rupert Murdoch, host Herbert Allen. It’s a remarkable group and I always learn a lot from both private conversations and the various panel discussions, but just like at every other conference on the planet, whether with florists or toy executives or statesmen, you get the same awkward moments and social faux pas, occasionally born of one too many cocktails at the mixer.
The very first year I attended, I did not arrive in time for the opening-night events, so my first event was the second-day cocktail party. Spouses are invited to the conference, but Griff could not join me until later in the week. I entered the room and didn’t see anyone I knew, so I did what you do in these situations: I walked up to the first group I saw and said hello. I said my name and the three or four men standing there said theirs. Most of them were businesspeople.
The man to my right, however, was a prominent California politician at the time. He smiled and introduced himself, then asked me, “And who are you married to?” I could see that the other men knew who I was, and they winced slightly.
“His name is Griff Harsh,” I replied, smiling.
“And what does he do?” was the politician’s reply.
“He’s a neurosurgeon,” I answered, still smiling.
He turned to the other men he had been talking to and demanded, “Since when are doctors invited to this thing?” I watched the other guys try to signal him with raised eyebrows that he should stop.
“Actually, he’s not here,” I said, watching him slowly become aware that he had put his foot in it. I finally bailed him out. “Oh, there’s no reason you should have known,” I said. “I’m the president and CEO of eBay.”
He then emitted a strange sound, sort of like those underwater recordings of whales singing to each other. Then he threw his head back and searched the heavens for a tractor beam to take him away. I still laugh at this memory. People are always amazed I didn’t get mad and set him straight. But it was so much more fun to watch this play out. As Mrs. Roosevelt said, carry on in the face of an insult and you’ll usually triumph.
I realize that not everyone has the advantage I had in this situation. But this kind of archaic sexism seems pretty rare these days, at least in the higher echelons of business. There aren’t enough women at the highest levels of corporate America, but most of us who have made it over time have come to be judged on the results we deliver, not how well we’ve done as women. The only other time at eBay when I ever experienced anything remotely similar was when Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud of the Saudi royal family, who had become a significant investor in eBay, had a contact of his at Citicorp call me. The contact said the prince was on a tour around the United States and wanted to meet with me. I was happy to do it but sent word back that I would like to know what he would be most interested in—a presentation on the company’s strategy, a visit to the tech center, perhaps a meeting with some users?
The word came back: “The prince would like to take the measure of the woman.”
No problem. We had a great meeting, and I must have measured up, because he bought more stock. And my executive team had a good laugh and a go-to phrase for years to follow.
I DO NOT BELIEVE that a CEO can craft a culture that is fundamentally different from his or her own authentic values. If you talk about being open and listening but you bite employees’ heads off when they don’t agree with you, well, you are training them to only tell you good news and conspire to hide problems.
In many different companies where I have worked or consulted, I have found that a company’s executives take on the personality and style of their CEOs. If the CEO yells, everybody yells. Years ago, if the CEO smoked, everybody smoked. If the CEO makes people wait all the time, it becomes a show of power down the chain of command to make underlings wait. If a CEO is secretive, a paranoid culture develops, with everyone constantly reading between the lines of memos and announcements for the “real” story. If a successful CEO is honest and straightforward, the company will evolve in that direction because people who prefer to operate in the shadows and manipulate information will leave.
Overtime, the accumulation of these habits and styles, passed down from one CEO to the next, becomes deeply embedded in the DNA of the company. You cannot simply order them out of existence or issue a memo to change them.
As eBay grew in size and prominence, I found myself invited to be on the boards of a number of companies. This is very flattering for a chief executive, but you need to look at this, like everything else, as a strategic choice. Your time is limited. Board seats are an opportunity to learn as well as to serve. In 2001, I agreed to take a board seat at the newly public Goldman Sachs. Goldman Sachs, founded in 1869, was what the business press always calls a “venerable” Wall Street investment bank. For most of its history it had been a partnership, but CEO Henry Paulson and his partners had decided to take the company public. Some partners had fought this for decades, and the company remained 48 percent owned by the partnership pool and a small number of major investors. Nonetheless, they did sell shares to the public in 1999 and needed to build an outside board with credentials that complemented the existing financial services industry expertise already there. I have a lot of respect for Hank Paulson and for the bankers and analysts at Goldman Sachs and I was happy to join the board; I could contribute my background in running a fast-growing, technology-savvy company.
The way boards work is that the agenda for a meeting, which typically goes all day and sometimes part of a second day, is distributed in advance. At our first meeting there were a number of interesting items on the agenda, including one that was slated to take up our time for two hours. I had read the materials thoroughly in advance of the meeting and had some questions. After about one hour and fifty-five minutes of the time allotted for this topic, Hank Paulson finally asked us if we had any questions.
“Yes, I do,” I said, and raised my concerns. That took up five minutes.
Hank looked at me and said, “Thank you for your comments. Now, our next agenda item is …”
I was furious. I got up, stood behind my chair, and put my hands on the sides of it, toward the top. “Hank, in the future, if you intend to put items on our agenda that are FYI only, that’s fine, but please note that on the agenda. I really do not appreciate flying three thousand miles and putting the time into reading and analyzing these materials if you are just going to tell us what you intend to do and are not seeking our input. And by the way, if you do that and most of the items on the agenda are F YI only, I’m really not interested in being on this board.”
Poor Hank was startled, to put it mildly, but he graciously apologized and devoted a few extra minutes to discussing my questions. But it was clear to me that going public had not changed the management culture at Goldman Sachs; they wanted to keep acting like a group of partners who did much of their discussion and decision making in private and then expected to get the board’s rubber stamp. I lasted only a few more meetings before I resigned. It was going to take a long time for this culture to change, so I decided to move on.
I RAN MY BOARD MEETINGS at eBay very differently, and I considered the eBay board one of the company’s most powerful assets. Not because it rubber-stamped my decisions—far from it. It was because I had put together incredibly smart, honest, individuals with integrity whom I trusted to help me figure out how to do the right thing in a brand-new world where there was no rule book. One of the things I always did with any weighty matter before us was to go around the table, asking every board member’s opinion one by one. As in any group of people, some are more assertive and some are more comfortable speaking one-on-one with the CEO. I would withhold my opinion and make sure every board member stated his or hers so that we developed a tone of openness and responsibility on the board. Every person would be respected for what he or she had to say, but I also made it clear that opinions needed to be shared.
The other technique I used with the board was what I call my “parade of horribles.” At some companies, board meetings are mainly a mind-numbing series of “happy PowerPoints.” From the agenda and the demeanor of the CEO, you would think that all is sweetness, light, and ice cream. Invariably, though, board members get a tense, sometimes even panicked, call from the CEO on a Sunday or in the wee hours of the morning when a situation suddenly explodes. At eBay, I would keep the happy talk to a minimum. I didn’t need my board’s input on the happy stuff—I needed their help on the hard stuff. At the board level and throughout the company, I would always say: “Let’s talk about problems when there is still time to fix them, not cover them up and hope they go away.”
One of our first outside board members was Howard Schultz, the force behind Starbucks. Howard grew up in a housing project in Brooklyn, New York, and later became one of the world’s most successful entrepreneurs. Howard joined the board in 1998 and brought a rare and very valuable quality to eBay. Howard is a person who thinks deeply about the relationship of a brand to the customer, the emotional connections and values shared. Starbucks’ success was about much more than the coffee and food—it was about that “third place,” as he called it. There was home, there was work, and now there was Starbucks, where you could relax, do personal business, do work business, duck in quickly, or linger all day. Atmosphere was important. When Howard joined our board, I think he was most intrigued by the community aspects of what we were doing and the trust and energy that our users showed every day. One of his most important contributions to eBay was in the category of helping us to develop our own sense of integrity, what he called the “character of the company.” That turned out to be a far more complicated challenge for eBay than any of us anticipated.
Almost from the beginning, people put all sorts of quirky and unusual items up for bid on eBay that attracted attention and made us an easily accessible window on popular culture. When we went public, the vast majority of items were collectibles, but later there also was a jet that sold for $4.9 million and ajar purporting to hold a ghost. It is pretty innocent fun to have an auction for a “UFO detector” or a cornflake that inarguably appeared to be shaped like the state of Illinois. It was quite another when we realized that people were selling items on eBay of a much more serious nature: Guns. Tobacco products. Alcohol. Pornography. Drugs. Hate literature and items bearing swastikas. Counterfeit luxury goods. Items related to criminal acts, including murders. In one memorable case, a man listed his own kidney for sale; in another, a sixteen-year-old boy put his virginity on the block.
Some of these things were clearly illegal to sell under any circumstance—narcotics, explosives, sexual services, body parts, stolen merchandise. Our first vice president of marketing, Brian Swette, tells a great story of picking up the phone one day soon after he joined eBay in 1998, only to have a gentleman who sounded like a cast member from The Sopranos say, “Uh, my people have been taking a look at your operation and we’d like to set up a meetin’ with you and our boss, Tony. Looks like we might be able to move some merchandise.” After Brian told him eBay didn’t meet with sellers to discuss things like that, the man replied, “Well, ya ought to think about that. Everyone takes a meetin’ with Tony.”
Some items were legal in some contexts and illegal in others. For example, there is a crazy quilt of regulations about shipping wine. In some cases it’s legal to ship wine from state A to state B but not from state B to state A. Or consider event tickets. In most states, once you buy an event ticket, you can do anything you want with it. But in some states there are very specific laws about scalping that apply. Some outlaw resale of certain kinds of tickets completely. Others regulate them, allowing sellers to charge, for example, no more than a set percentage above the face value.
Then there were items that were not necessarily illegal but were bizarre or offensive. After a while, eBay became many reporters’ first stop after some historic event or tragedy, because invariably some miscreant determined to prove that all people are not good would rush to post an item such as debris purporting to be from the space shuttle Columbia accident (handling such material was dangerous and actually did violate federal law). Certain items that had been traded only in the shadows suddenly debuted in the eBay pages—and shortly afterward in the media. Who knew there were people who traded used and unlaundered (what they called “custom”) undergarments? Before eBay, I never had a clue there was a collecting fetish called “murderabilia” in which people collect the artwork of convicted murderers, as well as evidence or items purportedly connected to the crime. I will never forget receiving a call one day from the distraught mother of a girl who had been murdered. She told me, “My daughter’s autopsy photos are for sale on eBay.”
In Chapter 2, I spoke about iterating, and how sometimes you just have to move forward and then you adjust, alter, improve, refine. At eBay this happened with what Howard called our “character as a company.” Not because there ever was a point where we didn’t care about our integrity, but because we had no way of anticipating the sheer variety of ways it would or could be tested in this marketplace. Therefore, it took a while before we could figure out what we would and would not do in a consistent way. This was a function of scale. When millions of people start posting items for sale, if even a tiny percentage of them post weird or offensive objects, well, that can be a very long list of things. Someone once asked me if eBay put people up to posting sensational items in order to get publicity for the site. Never! When tens of millions of people are involved in anything where they are operating this independently, there is always going to be somebody doing something bizarre.
So, especially in the beginning, it was kind of a free-for-all. Remember, the site was automated. Nobody reviewed the items before they went up for bid. We would take down listings for obviously illegal things when people brought them to our attention, but eBay was not set up to screen items in advance.
For a while, our lawyers told us that we actually wanted it that way. Their position had to do with the Digital Millennium Copyright Act (DMCA), passed by Congress in 1998. The main goal of the act was to stop people from circumventing antipiracy software, but it had another important provision as well. The act said that a platform such as Yahoo chat rooms, where users could post protected content, or a site such as eBay, where someone might try to sell counterfeit or illegal goods, would not be liable for any of that content as long as the company did not make it its business to selectively police the site. The legitimate concern was that companies could not afford to get into the policing business—that it would be prohibitively expensive. And so Congress said, “Okay, we understand. If you want to be treated like the U.S. Postal Service or private transportation carriers, who simply provide a service without screening content, you will be shielded from liability—as long as you do not selectively put content up or take it down based on particular criteria.” Congress was trying to sort out a messy collision of First Amendment rights, privacy rights, property rights, and criminal issues, not to mention potentially crippling costs for still nascent e-commerce companies.
Because of the DMCA, our lawyers felt that if we selectively policed eBay, we might become liable for illegal or fraudulent activity. For example, if we used software to detect and prevent the listing of fake Prada bags but we also knew there were counterfeit Rolex watches listed and did nothing unless Rolex specifically found those listings and complained, we might be liable.
From the beginning, Pierre wanted eBay to be an honorable, lawful place to do business, but he also believed in a simple premise: if it’s legal to sell on land, it should be legal to sell on eBay. He explains, “I didn’t see the Internet as some kind of separate place outside the boundaries of the physical world or beyond the reach of law. We needed the protection of existing laws. When certain kinds of behavior took place, I would remind people, you should file a police report, you should make a complaint. If the system somehow can’t help you with that, we will work to change the system…. I would also say to people that if you don’t like something being legal for sale online, then you should work to make it illegal for sale offline.”
Remember, we were still a young company trying to build a stable system and to serve the 99.9 percent of our customers whose transactions had nothing to do with serial killers, body parts, or counterfeit Rolexes. But after the DMCA passed, the message from our legal counsel was: “We can’t risk losing the whole company for that tiny fraction of items.” This concerned me, but frankly I was not yet sure how to proceed.
Two separate situations eventually erupted and challenged us to demonstrate our values in more specific and proactive ways.
Several of the companies that made video games discovered that illegal, bootleg copies of their games were being sold on eBay. I understood their frustration with that and we tried to respond promptly to their complaints about specific listings. But they wanted us to try to screen for and even block the listing of the items in advance, and that was a problem. It was not clear how we could develop a screening mechanism that would distinguish between a bootleg copy of a video game and a bona fide copy that the owner had every right to sell. It was not as if a bootleg copy was described in the listing as “illegally copied version of Grand Theft Auto.”
In early 1999, I went to a meeting with the CEOs of several of these companies. At that meeting, Larry Probst, the CEO of Electronic Arts, shared some disturbing information with me. A group of rogue game developers inside Electronic Arts had created a violent video game called Cop Killer. When Larry heard about it, he was offended; he canceled the project and ordered the code destroyed. However, he had learned that stolen copies of this game were appearing on eBay. Larry wanted my help in preventing the bootleg copies from being listed to begin with. He said, “Meg, you need to be proactive about taking these things down.”
I explained my dilemma. I said, “Larry, this is terrible and I’m completely sympathetic. But according to our attorneys, because of the DMCA, if we start proactively policing items like this on the site, we could lose the whole company.”
Larry looked me in the eye and said, “Meg, what is the right thing to do?”
I swallowed hard. I realized the first answer I had given him did not feel right.
I went back to eBay, and it happened that I had a board meeting soon after. I said, “Guys”—at the time they were all guys—“we’ve been operating with a particular interpretation of the DMCA, but I believe we have to change our minds about this.”
I remember clearly that the first reaction was from Howard Schultz, then the CEO of Starbucks. He looked at me and said: “Meg, it’s all about the kind of company you want to run. What do you want the character of the company to be?”
We decided to change our attitude about the DMCA and not use it as a shield. There were maybe 150 people working at eBay then, and I announced to them that we had shifted our position because we could not sit by and become the kind of company that didn’t care if it was facilitating the sale of a game called Cop Killer. We began a much more concerted and aggressive effort to remove counterfeit and other problematic items from the site, even if we didn’t have a legal obligation to do that.
Later, Howard Schultz played a critical role in another important milestone in eBay’s development. Howard Schultz is Jewish, and a few months after the video game issue arose he visited Auschwitz. We were aware that items were beginning to appear on the site that carried swastikas and other Nazi symbols. There was nothing illegal about these items. Some—although not all—were marketed by neo-Nazi groups that clearly were advocating hate and bigotry. This had come up previously in our meetings and was of concern to all of us. But after he returned from Auschwitz, Howard called me and told me he simply could not rest unless he personally did something about the marketing of pro-Nazi material, and he said he was going to bring it up at the next eBay board meeting. He felt so strongly about this, he warned me, that if we did not act on this matter, he would consider leaving the board.
When we convened our next meeting, Howard presented his thoughts. When it came to board meetings, I did something else a bit unusual for CEOs: I always had the senior members of my executive team sit in on them so that the board could ask them questions. Howard’s presentation led to an extensive debate that remained very respectful and professional. Everyone saw how deeply affected Howard had been by what he had seen in Poland. But what he was proposing ran against Pierre’s original position that if something was legal for sale in the land-based world, it should be legal on eBay. Jeff Skoll, who also is Jewish, took the opposite view from Howard, arguing that eBay was a marketplace, not a retail store. Henry Gomez, our senior communications chief, warned us that if we started banning items, the list was going to become very long. He pointed out that virtually everyone has relatives who were killed or exploited by someone somewhere at some point in history. What about material related to other despots or repressive regimes? What about Ku Klux Klan material? We had legitimate collectors and historians who traded war memorabilia and books such as Mein Kampf for their historical value and even for the purpose of illuminating the horror of these ideas. Not a person in the room wanted to be in the business of banning books. The question was never whether we agreed with or supported these groups. What we struggled with was the classic dilemma of censorship: once we started doing this, where would we draw the line?
Recalls Jeff: “Pierre and I were concerned that it was straightforward to follow the law, but whose morality is the right morality?”
Howard listened intently, and then he said something that went right to everyone’s heart. He said: “I don’t know where you stop. It might be a slippery slope. But I can only deal with this matter right here, right now, on this board. And we should not be allowing this kind of hate-based material on eBay.”
I think that was the moment when we decided that we were not, and did not want to be, just an unregulated swap meet. Pierre explains, “This was very difficult for me from an ideological point of view.” But Pierre supported me in the decision I ultimately made to prohibit hate-based and other offensive items from the site, and pretty soon after he said that he realized that it was the right decision. “We realized that we wanted eBay to be cleaner and safer than the swap meet. The items might be legal, but they were borderline. Meg was exactly right, and I think over time our approach made eBay stand out,” he says.
Eventually, all these kinds of issues came under the purview of our Trust & Safety department, which was charged with making sure eBay was what we called a “clean, well-lit place to do business.” The staff of Trust & Safety set policy, monitored and policed the site, investigated complaints, and made sometimes difficult judgment calls. Trust & Safety also created sophisticated software, which continues to evolve, to screen for problematic material, and prevent fraud or illegal activities. Today, there are roughly 2,000 individuals working in Trust & Safety and in other capacities at eBay to protect our users.
Ultimately the character of a company, like the character of a person, is an accumulation of many, many moments when the choices are not necessarily clear and we make the best decisions we can. But over time the logic and reasoning that we use to make those decisions, the moral compass we choose to follow in making those decisions, is the essence of our authentic self, our character. If we hope to engage the Power of Many, because people are basically good, I believe that we must demonstrate that we care about doing the right thing. I don’t believe that we need to prove that we are the ultimate authority on the right thing to do. Often our sense of what is right will evolve as we get more information. But we do need to be transparent in our attempts to understand the issues and the consequences.
At eBay we became very comfortable with the position that we were not going to hide behind the idea of free speech every time we faced something we knew was just plain wrong. I remember the day when the serial killer Jeffrey Dahmer’s refrigerator showed up on eBay—the refrigerator in which body parts of his victims supposedly had been stored. I thought, “There may be no law against this, whatever this is, but as the CEO, I need to step up and declare that we are not in the business of prolonging the suffering of families whose loved ones were victims of this or other killers.” The call from the mother of a murdered girl whose autopsy photos had appeared on eBay still resonated in my memory. We studied the matter and ultimately decided that out of respect for the families of victims, we would not allow the sale of items closely associated with notorious murderers within the last hundred years. To this day, eBay does allow items associated with, say, Jack the Ripper or Billy the Kid, because they are of historical value. However, eBay doesn’t allow listings of evidence from a crime scene or memorabilia linked to modern serial killers. eBay also doesn’t allow the listing of items that might allow the perpetrator of a crime to benefit financially from contemporary criminal notoriety, such as an autobiography.
I HAVE A SAYING that everyone who has worked for me over the last two decades probably recites in his or her sleep: “Right person, right job, right time.” As we grappled with these difficult issues in the early years of eBay, there was no better example of right person, right job, right time than the former federal prosecutor we hired to take on the policing of our site, a talented attorney named Robert Chesnut, who was educated at Harvard Law School.
Rob had spent eleven years in Virginia prosecuting some of the U.S. government’s biggest spy cases, including the case of CIA agent Aldrich Ames, in addition to other federal crimes such as bank robbery and drug dealing. On the side, Rob had an unusual hobby: he was a devotee of Polaroid instant cameras, the ones that spit out the picture right after you take it. Polaroid’s business was a casualty of the digital photography age, and many models of cameras had been discontinued. Rob was always prowling garage sales and combing classified ads to beef up his supply of cameras and the special film stock. He read an article in a hobby magazine about how eBay was becoming a great place to find camera gear, so he came to the site and was stunned to find dozens of listings for Polaroid cameras, accessories, and film stock. He admits he was a little wary at first. “As a federal prosecutor, you don’t always have a trusting impression of your fellow man,” he laughs today. But sure enough, he sent his $50, and a week later his first camera purchased on eBay arrived as promised.
Rob became an active eBay user. Separately, he had been thinking about leaving government service for business. On something of a lark, in early 1999 he sent us his résumé with a cover letter making the case that he imagined a site like ours might need the services of someone with his experience as we grew. This was right at the time we were deciding to become more proactive in how we policed the site. The chance of finding the perfect employee for a specialized job from a letter that arrives over the transom is minuscule; however, I think we dialed Rob’s number before we finished reading the letter. We flew him out immediately, along with his wife, Angela, and I took them out to dinner. There I learned that Angela was literally a gun-toting federal agent from the Department of Justice with a deep background in investigations.
In addition to some of the very public philosophical and policy dilemmas we faced, we were starting to find ourselves interacting with the law and lawyers in other ways you might not immediately imagine. For example, we were getting subpoenas by the binful: from manufacturers going after counterfeiters, from divorce lawyers trying to find records of what a party had bought and sold and for how much, and from individual sellers or buyers who had filed a complaint with eBay after they felt they’d been defrauded. I could see that both Rob and Angela not only had the kind of experience in law enforcement that we needed but were good people who cared about doing the right thing. I hired both of them.
Rob became our point man for the task of developing specific rules and technology to screen for illegal or inappropriate items being listed on eBay. This was completely uncharted territory. It was almost like dropping him into the middle of Manhattan with Peter Stuyvesant and asking him to write a penal code from scratch. The issues reached into almost every aspect of life and trade you could imagine.
For example, a huge category of concern was counterfeit items. It was easy to prohibit them as a matter of policy, but it was not easy to identify fake items or prevent them from being listed to begin with. Ultimately, we had to create software tools that analyzed the source and volume of certain kinds of items, comparing it to the distribution channels we knew were authorized by a given manufacturer. But in virtually every case a person would have to get involved in the investigation.
Another troubling category was the subject of one of the very first e-mails Rob received when he joined eBay. “I got an e-mail from a user I did not know that said, ‘You are selling Jarts and you are all going to go to jail,’” Rob recalls. “I responded, ‘First, I appreciate your e-mail because I am here in part to make sure nobody goes to jail. Second, what are Jarts?’”
Turns out Jarts are one of the toy world’s dumbest ideas—those giant lawn darts from the 1970s that you were supposed to throw at rings on the lawn but which had a tendency to end up stuck in little brothers and tipsy partygoers. They were incredibly dangerous, and the Consumer Products Safety Commission had recalled them and banned their sale. The e-mailer was correct: it was illegal to sell them new or used. But what Rob instantly realized was that eBay often was a place where people listed items they found in their garages or attics. There were hundreds and hundreds of products that had been recalled through the years, so selling Jarts was likely the tip of the iceberg for all kinds of banned and recalled items that were dangerous but which the sellers might not even realize had been outlawed.
What Rob did next was not the easy thing but the right thing to do. “At the time, a lot of companies took a distrustful and defensive posture toward law enforcement. I thought that really didn’t serve businesses’ interests well. In general, because of my background, I knew that it was always better to contact a federal agency than to have them find you. I felt we should be open and proactive.” With my blessing, he went to the Consumer Products Safety Commission and said, “We have a great business, but we have just discovered this is going on and we are concerned about it. eBay has no desire to sell banned or recalled goods. How can we work together to solve this?”
The commission was so pleased at Rob’s attitude and his appreciation for their mission that we worked together to create a special website about the issue of banned items and what consumers should do with them. We agreed to take down any recalled goods the commission found on the site, and to invest in educating consumers about the problems that might be sitting in their attics. The head of the CPSC repeatedly used eBay as an example of a great public/ private partnership, and Rob used the same approach with other government agencies, such as the FDA, when we discovered medical devices and prescription drugs being listed on the site.
Making eBay a lawful, safe, positive, global marketplace where all people were treated with respect sometimes meant turning away from product categories that could have represented very large revenues for us. For example, we decided that we would not sell tobacco, guns, or alcohol on eBay. Again, overlapping laws and jurisdictions made overseeing a legal marketplace in these items complex, but we also realized that it was impossible to control how those items would be shipped and by whom they would be received. We decided to put adult content in a special area that was clearly separate from the rest of eBay, and we put controls in place to ensure that it did not appear in searches users performed on the main part of the site.
I would like to think eBay set an example for how to handle these difficult issues the right way. Rob has become an expert in this field, and he tells me that there are a number of companies who have modeled their collaborative posture with law enforcement and government agencies after eBay’s. eBay found a way to stay in business and be true to its own values and character. That wasn’t the easy route, and it was not an inexpensive route. Today, under the larger umbrella of Trust & Safety, eBay employs fifty people whose full-time job is to work with law enforcement agencies on various issues from fraud to counterfeit merchandise investigations to answering subpoenas.
I’m sorry to say this is not a route that all companies in a similar position have chosen to take. To me, a most unfortunate example of one that didn’t is Craigslist, the online classified site in which eBay bought a minority stake in 2004.
We had always been intrigued with the potential for online classifieds. As Jeff Skoll explained, his realization that online commerce could introduce powerful new efficiencies into the marketplace previously served by classified ads was one reason he joined eBay. We realized early on that for certain types of goods and services, some people simply prefer an online classified format to an online auction. Sellers can just describe the item and suggest a price. Buyers can scan the prices and see what they can afford, but they also can contact the seller to bargain if they choose. Unlike an eBay transaction, the parties usually end up meeting to complete the deal.
We had tried to set up special eBay Web pages based on regional auctions where we imagined sellers and buyers might end up meeting, but that did not catch on. In fact, it actually took a number of years for Craigslist to become successful in U.S. urban markets, too. But eventually Craigslist achieved network effects and began to take off. The real wake-up call for us came when we realized that in many cities, Craigslist was starting to getting more listings for used cars than eBay Motors was getting.
We had purchased Mobile.de, a German automobile classified website, in early 2004, and eventually we also bought several other overseas online classified sites, including Marktplaats, Gumtree, and LoQUo. Around the time we were looking to broaden our efforts in classifieds, a Craigslist shareholder wanted to sell his stake, so we purchased roughly 25 percent of the company. Pierre agreed to take a seat on the board.
But from day one, our cultures clashed. Craigslist’s founders insisted that they had modeled the company on newspaper classified ads that had very few rules or restrictions, and they resisted attempts by us, or even law enforcement, to try to make sure the listings were legal and conformed to some kind of safe and ethical standard.
I appreciate how complicated it can be to develop rules to manage this kind of a business. But from the earliest stages of our relationship with Craigslist, we tried to tell them that they must pay attention to the integrity of their brand. Pierre tried to tell them that. We sent Rob Chesnut up to work with them. I tried repeatedly to get them to appreciate the importance of protecting their brand image. When we purchased other online classified sites, and when we launched our own classified ads business in many cities around the world, called Kijiji, we integrated Trust & Safety policies.
Subsequently, it has been well covered in the media that many state attorneys general have put pressure on Craigslist to change its policies, and my understanding is that they finally have changed their minds on this and moved to try to monitor listings and prevent some of the illegal behavior that the site was enabling. But for me, this is a very unfortunate lesson in what happens when a company pays no heed to safeguarding its brand. I have watched with great sadness the case of the medical student in Massachusetts who is accused of murdering two women he allegedly found through Craigslist’s notorious “erotic services” category. He now is routinely called the “Craigslist Killer.”
I have come to appreciate that the character of a company is one of its most vital assets.