{audio:0:00:05} Can you start by setting some context to when you first joined eBay in 1999?

{audio:0:00:10} In 1999, I was an MBA candidate at the Kellogg School of Management, in Evanston Illinois. eBay had just had its IPO. They heard, through the MBA grapevine, that there was a candidate at a top school with collectable industry experience. I had come out of the comic book industry. They came and got me. I was from the American South. I had never lived west of the Mississippi. Never even really thought about it. They basically made me an offer I couldn’t refuse. I joined the company in 1999 and stayed in Silicon Valley for the next 19 years.

{audio:0:01:01} How did eBay originally engage with the sellers on the platform?

{audio:0:01:05} What I like to say about eBay is, it’s the first commercial community at scale. What I mean by that is, they built 130 old-fashioned desktop message board forums for customers of eBay. Long after the transaction was over, they could talk 24 hours a day about the thing that drove their passion. Whether that be comic books or classic cars or poodle skirts from the 1950s. They cultivated a community of interest around some of these key selling verticals. Simply by creating this space, they basically created online community, in my opinion.

{audio:0:01:59} What was key to driving engagement in those early days?

{audio:0:02:04} For the earliest days, they had to just let those communities alone and let them just develop relationships that kept people coming back and made it sticky. Then about five, seven years into my tenure at eBay, I ended up running the power seller program, which is the reward and retention program of people who make their living selling on eBay. I’ve been lurking in these other forums and saw the power of those relationships and how it impacted the business. When I took on the power seller program, the company viewed the power seller program as just another group of grandmas online, who wanted to share pictures of their cats. That couldn’t have been further from the truth. What I observed by eavesdropping on the power sellers, was that they were the story of small business in America. Coming from wherever you’re from, small business drives every economy, everybody knows that.

{audio:0:03:09} Once I grokked that that was the truth of this group, we re-engineered the entire company to enable these folks to be better sellers on eBay. We created a community of practice around the business of eBay for the people selling on eBay. That community of practice permeated through everything we did. You may remember, we had seven years of eBay live, which was a big gathering, a global gathering of all the people on eBay. We took that and made it totally seller focused. We created a seller diagnostic station, where they could come up and get tips on their business. We introduced sellers to each other. We figured out what they wanted, and we matched it to a company goal, and we created a program around win/win. It really advanced the business.

{audio:0:04:08} How do you look at the offline and online balance? I would have thought you focused a lot on the online community, in terms of the sellers engaged with each other, but it seems like you actually integrated that with eBay live, which was effectively an offline, face-to-face event.

{audio:0:04:27} We’re in this amazing digital age and this time of opportunity for incredible scaled connectivity; global scaled connectivity. Online, of course, has to be a huge part of it. We worked with the power sellers in whatever technology platform we had at the time. At the time, we basically had a desktop forum and we just engaged with them. We often had virtual town halls with them. I would bring an executive from the C-suite into that forum for an open Q&A. Then they would have discussions on their own that they would then bubble up and bring to me, of things that they wanted to talk to the company about. Our online tools for organizing community, the entire social media world is built on this connectivity at scale. You’d be crazy not to employ those tactics. As you and I both know, and especially now during Covid, nothing takes the place of in-person. Once you get that magical goop going between people’s relationships, then there’s nothing that can’t be done. For example, all of our sellers knew each other from the online world, but then when we got them together, there was a massive at scale women shoes wholesaler, who needed to pick pack warehouse system. They met their competitor from the middle of America, from Kentucky, and now suddenly they became cooperators. The New Jersey guy shipped all of his shoes and shipped them out of Kentucky, even though Kentucky had his own warehouse and his own sales. We forged incredible networks. As I said, once you have that foundation, everything is possible. It just raises the water level for everyone.

{audio:0:06:42} How did you focus and help sellers increase sales or profitability?

{audio:0:06:45} There’s an art and science to this community management. It’s not just straight marketing. You actually have to get to know what works for sellers. We undertook a process where we took the top percent, performing sellers and we really invested the time to get to know them and what was working for them, about eBay. We took their lessons and we distilled them down to seven things that everyone eBay business could do, to do better. We then syndicated that to all sellers. When I say then we re-engineered our live events, we just married it all up to those seven skills and really pushed everyone into doing better. After that, the product, eBay itself, started to match these tips for better selling. Then eBay took that data and was able to monetize that if you use more pictures, you’re more likely to sell. If you start your pricing at this level, you’re more likely to sell. Now, those are all algorithms. I invite you to sell an item on eBay today and you’ll see, basically, the result of that work that we did in 2003.

{audio:0:08:13} What exactly did the sellers say was most important to them?

{audio:0:08:18} It’s an art and a science. What’s most important to a seller is selling more. In some cases, we would visit their warehouse and have a look at their showroom or their customer support. Really, it boils down to: help me sit on my butt more comfortably for longer and sell more stuff. It just so happens that that is exactly what eBay wanted them to do; sit on their butt for more hours more comfortably and sell more stuff. You may know that in the United States there’s no standardized government supported healthcare. One thing we did was, we just did a deal with an insurance company to give our sellers a medical discount card, like discount on optical and discount on prescriptions, which is something they couldn’t provide because they were small businesses in America. We gave them enough of those cards. Up to 50 per seller, for the people with a big team. That changed everything for these people. It was a real value-added benefit. It didn’t cost us anything and really, depth-charged the comfort of our most important customer, in a B2B context.

{audio:0:09:42} It was really almost serving them, not even as a seller on eBay, but just their demands as a business owner.

{audio:0:09:50} That’s why I say it’s an art and a science. You really have to invest, and we really did, invest resources, in getting to know these businesses. The businesses and the people behind them and what was needed. Sometimes it’s not obvious. The numbers say one thing, the guy on the phone or on the forum says another thing. Then you walk into the warehouse and it’s like, wow. What they really need is a fulfillment center or whatever. What can we do, at scale, that can help everyone in this way?

{audio:0:10:26} You walked into the program and you literally went and met sellers.

{audio:0:10:32} Let me tell you about my favorite ones.

{audio:0:10:41} Was there any one moment or benefit or change in the program that really drove the growth or the value add for sellers?

{audio:0:10:54} Yes. I’ve mentioned all the education that we did and then how we changed the product. There’s one memory that really stands out more than any. Once I realized that this was the story of small business in America, it just so happened that the US Congress was going to try to pass a tax, internet tax on items on eBay. This is now ancient history. It came to be, but it was the first time it was on the table. I worked with eBay’s government relation’s department to take 50 sellers, one from every state, to go lobby on Capitol Hill in Washington, with one of the President Bushes and go represent the 50 states. Introduce congress to one seller from every state. Like I said before about being in person, nothing is more impactful than walking into the Georgia’s senator’s office, with the guy from rural Georgia, who has 50 employees in the middle of nowhere selling massive walk-in restaurant refrigeration, from a warehouse in his district. Nothing is more impactful.

{audio:0:12:11} This guy is employing 50 people. 50 people means 50 times five in the household. 250 people creating incredible economic bases for that small town and really driving the American dream. There he was, he showed up in Washington. That was in my long career, that is one of my favorite examples of what is a win/win? A win/win is John Stack from Georgia, with their walk-in refrigeration, not having to pay tax. People not having to pay tax, so he could keep his prices low, bringing him to Washington to advocate for his own business that was on my platform at the time. Nothing was more impactful. It was a wonderful experience. It proved me to that in every business there is a range of things that are win/win. Good for the company, good for the customer, that you can mine to create these everlasting engaging relationships. It was a total gamechanger.

{audio:0:13:25} How did you think about engagement, was it between the sellers and the platform, between the customers, or what was the metrics you used to understand how engaged your sellers really were?

{audio:0:13:35} I’m so glad you asked it that way. This is an important thing to answer for anybody considering fostering, engaging for a retention play or an ROI play or even a person-to-person customer support play. These are important KPIs; measurement is always so important to think about. For one thing, there are levels of power sells. At that time, it was just like bronze, silver, gold. Very simply, we created the technology to measure how many people grew. How many people went from bronze to silver? And levels were tied to sales. Growth inside of a community, when you gamify a community, it’s a great way to measure your success. You could tell your CEO, we’re going to mint 20,000 more silvers this quarter. That’s a great KPI to sign up for.

{audio:0:14:36} Another is sentiment. Often when you use online communities, there’s always a sentiment barometer and you can always dipper down and take a temperature and you can give sentiment a score. A lot of software for managing social and community offer up a sentiment score. You could manage the sentiment score or the NPS, these are all valuable ways. First of all, you have to tie the work to a company goal. At eBay, we definitely were interested in how much more gross merchandise the sellers moved through the platform. At places like Zynga, where I then worked in videogames, we wanted them to come back more often. It was more of a daily active user play. Also, revenue, how much more did they buy? At Sephora, the job that I left before I moved to Australia, really, we already knew that engagement equals sales. My charter was to just create awesome engagement and reason to come back.

{audio:0:15:46} Why do you think gamification is crucial to a community?

{audio:0:15:53} It’s not. It’s a great way to motivate and offer extrinsic value to people joining a community. If they get something at the beginning and get something fast, then they feel like they’re making progress. It’s one way to motivate a community. On Facebook communities, they’ve only just introduced gamification on your contributions on groups. It doesn’t mean anything. Facebook thrived for 15 years without gamification. If you think about why you would have a community or whether to invest in community, you do have to think about it; am I going to offer extrinsic value or intrinsic value or a combination of the both? If you don’t have intrinsic value, you need to offer extrinsic value. Gamification is a great way to show people how to move up.

{audio:0:16:52} Did you literally look at it as this is the intrinsic value add; this is the extrinsic value add? You just decide how to balance or which ones to choose. For eBay for example, there was the driving sales, but also then driving this top seller program or moving up the ranks in bronze, silver, gold.

{audio:0:17:16} Yes. Once you have moving up the ranks, it’s up to the strategy of the company to offer something different at every level. Once you got to a gold, for example, you basically had a 24-hour 1-800 number to customer support. That is worth a lot. That a human is always going to be on the line when you call. Down at bronze, maybe you got into a fast-track queue. Maybe at silver, you had a once a month sales call or support call that you could schedule and count on. Once you decide that you’re going to offer a gamification, what comes with it? Status is one thing, but what comes with the status? You can think about airline loyalty programs, which are all gamified. I’m sure you know people – I certainly do – who, whatever status they are, in non-Covid times, spent all of their time trying to jockey up to the next level, so that they can maintain their status, so they can always have a glass of wine while on board. They’re offering extrinsic value to the fact that I’m flying a lot.

{audio:0:18:34} Did you ever find there was a risk, or even think there’s a risk today, of sellers revolting or the bargaining power on the marketplace such as eBay shifting toward the sellers?

{audio:0:18:49} Yes. It almost happened a lot of times. When the threat of that is imminent, then there’s an imbalance in the marketplace. In any marketplace – we could talk about Uber Eats – if anybody is that angry, then you’re doing something wrong. It could be all kinds of things. It could be simply that you’re not being transparent enough. In this technology world, your users, they really want that feature and they want it now. You’ve heard that. You know that. Let’s just say they want to be able to have bold writing as opposed to not bold writing. You know that. You’re going to spend this quarter working on italics writing, because that’s more important for the application that we’re using. As long as you tell the customer, we know you want both, we’re giving you italics so you can do all of this other stuff over here. Bold is on our list; we’ll give you an update when it’s coming. Sometimes simply by increasing transparency is fantastic engagement and it’s all anybody needs. When people feel like they’re being squeezed and they’re being taken advantage of, it may mean there’s an imbalance in the business. The business might have to rethink how they charge or how they handle that segment’s work.

{audio:0:20:32} Did they revolt mainly over the take rate?

{audio:0:20:34} It was about the selling price. It goes back to the time that eBay used that data to then create the algorithm that helps you sell an item as you fill out a form. eBay used that data to finally offer bulk selling and things like that, so that people could pay one low price as long as they always had 2,000 items on the site at all times, etc. and probably with a certain sell through rate. This was all done through data. You have to remember, we’re living in an era where it’s a given that marketing data is married to the market. In the early 2000s, that was the dawn of marrying sales data to product development. We did our best. Fortunately, the sellers were patient long enough, to let us develop it for them.

{audio:0:21:40} How did eBay look at managing supply and demand and the top sellers and sellers, but also the customers that are paying for their products?

{audio:0:21:54} Yes, it ping-ponged around. I was there in the early days, every one of us from that time, if you ask, they have a different answer. It ping-ponged around. One quarter we’d be really focused on demand. Then we’d ping-pong back to supply. Then about five years into my tenure, I became very worried about supply, about locking in supply. Fortunately, it was also on Meg Whitman’s mind, the CEO and that’s when she mandated that we create this seller services department that really was chartered with, lock in supply forever. Create the programming tools and tech that’s going to support sellers for the long haul and then we’ll get this other group, consumer marketing, to go out and drive demand.

{audio:0:22:56} How do you think about the importance of locking in supply and take, for example, Uber and Lyft and the ride-hailing companies, where it seems like all the drivers are on all the platforms?

{audio:0:23:09} If we’re talking about demand side only now, we know that ride sharing is a service that the public needs. This is an idea that is working for consumers. All you have to do is call it; it’s easier than a taxi, it’s always there, it works. The demand is there. Then you introduce choice with the ride hailing. The consumer is going to go with the company that they either have the best experience with or the lowest cost or that they can earn loyalty points or whatever; some other value to help them make their choice. I know a lot of your In Practise community are marketing students, MBA students. In consumer-packaged goods, you learn about the value of switchers. Like when you’re marketing toothpaste, there’s 20% are always going to buy Colgate, but 80% buy what’s on sale, so you can just capture that share in that moment. There are a bazillion disciplines around how a Lyft steals a passenger from an Uber.

{audio:0:24:28} Would you be looking at locking in supply and capturing the drivers as an asset for your company, similar to the way eBay have done with sellers, for example?

{audio:0:24:40} Absolutely. In Lyft, in the early days, I actually did some work with them. They tried a community model for drivers. They were like, we are a community of gig economy people. We support you as an independent operator who’s leading the charge of leading-edge gig economy. How can we support you? For growth at the beginning of a marketplace, to lock in that supply, I thought that was a brilliant strategy. It had to change because they had a big competitor, Uber who didn’t have that strategy, so they had to keep up in different ways. Yes, it’s time for Uber and Lyft and all the other ride sharing companies to think about what can they offer? What guarantees? What breaks? Cut rate on gas, at scale, to all of their drivers, to make them not drive for other people.

{audio:0:25:45} I guess it’s quite difficult for the unique economics of the ride hailing business. Plus, the economics of the driver is very different to the economics of the seller, as well. I think it’s difficult for them to choose one platform.

{audio:0:26:03} Even when I was at eBay and even today, if you’re an online seller, you’re selling on every platform. The software enables you to sell on Amazon and on eBay and Shopify and everywhere else. You just basically upload, you press go, and wherever the sale comes from, it pulls it out of inventory and picks and packs it for you. B2B, the business customer also wants choice. If you think about an Uber Eats, the restaurant, what do they want? They want to sell more food. They’re going to use every platform they can to sell food. They’re going to go with Deliveroo and Uber Eats and whoever. They just want to turn more meals out. You can’t blame that seller or that business for spreading, diversifying their outward facing shelf space.

{audio:0:27:08} Who wins in the long run then?

{audio:0:27:11} Let’s pick an analogy. The seller or the online seller, that is somewhere between all of these platforms, they’re making a margin that makes it worth it. For example, jewelry or shoes or books, which are relatively low cost, easy to ship, they’re standardized sizes and there’s great markup. Those are obvious businesses, where you want something that’s easy to ship. You want something that’s repeatable, easy to get, easy to ship without a lot of customer churn.

{audio:0:27:49} But if all the suppliers are going to be on every platform, the largest player surely wins, which is why scale probably matters the most in these areas?

{audio:0:28:04} It can. I agree with you. These are all of these business school lessons. First mover advantage. Who’s got the scale? Sometimes a more sophisticated technology. Everybody was on eBay and then Amazon really pivoted and really made it attractive for an online business to sell on Amazon. Then everybody went to Amazon. Sometimes it’s a technology deal. There are a lot of factors that could make you loyal or switch. It’s happening right now, with one of my other clients, Afterpay, the new buy now, pay later craze that’s taking over payments on the internet. There’s a lot of competition out there. Afterpay is the giant but they’ve got several competitors. Now, it’s like they’ve got to lock in these scaled relationships with a huge retailer or make it unavoidable to work with small to medium business with better terms, better advertising. There are all of these levers they can push. Do a lottery where they show up on their homepage of their website more often, so that more consumers know about it. Give them cooperative ad dollars. Cut their rate a little bit based on volume.

{audio:0:29:35} How would you compare the similarities and differences in the community of Zynga Versus eBay?

{audio:0:29:40} We just spent a while talking about B2B community and managing engagement in B2B setting. At Zynga, it was a major pivot for me. I went from managing one and a half million small and large business sellers in a selling program, to 300 million global gaming fanatics, on 120 Facebook pages, in 17 languages. That was a pure consumer pivot. I will say this, that the same mechanic applies to every community. It’s impossible for me to tell you exactly what it is, I’m going to hold to my thesis that it is an art and a science. The science part is easy. You artfully go in, you understand what the player or the customer wants, you match that with a company goal and you give the player what they want at low cost and at scale to you. That satisfies them and makes them do the thing that the company wants them to do for its ROI.

{audio:0:30:56} I’ll give you a great example. At Zynga, we drove 12 million dollars of incremental revenue through our social posts alone. This was before Facebook ads. This was before Facebook was even an ad platform. It was just a social network. How did we do that? Farmville players are completists. They want to have every cow, every crop on their farm. They were getting new players all the time. Some new players had never bought the rainbow cow from last month. We would just dredge up old items out of inventory and post it on social and say. “Hey, farmers, did you ever know that we had a blue and pink cow? Go buy this virtual item right now for 50c.” Just by helping them complete their farm – I stand by that when I say it was a win/win; they really wanted to do it – we drove $12 million of incremental revenue.

{audio:0:32:02} How did you look at the purpose or the needs of that gamer versus the seller?

{audio:0:32:09} That’s where it goes to the art and science part. The art of it is, you’ve just got to get inside of your customers’ head. There are a million ways to do that. A great way to do that is just pick up the phone and just meet a few. Gather a few over pizzas and find out more about them. Watch their gameplay from a customer experience, user experience perspective. When I say that there’s an art and a science, you might remember I told you that I went to these sellers’ warehouses. I got to see how they did their thing. I wanted to see how the gamers gamed. From game to game, it was very different. The Farmville demographic were middle-aged midwestern women and the Mafia Wars demographic were urban males. We had to take a little bit from everybody. We had to learn a little bit from everybody.

{audio:0:33:06} How did you look at driving the daily active user growth or engagement?

{audio:0:33:11} One way to do it is to, again, find out what they like and schedule in stuff of what they like. At the time, we scheduled in stuff of what they liked on social. For example, we had a massive 150 million global Farmville fans on Facebook, but about 100,000 Farmville fans on our forum. The forum people were all the payers. We knew that about them through data. Those people just loved Farmville. Once a month, we would have a cooking contest, so they would each bake a cake and decorate it with a Farmville theme and vote on who won that month. Whoever won just received in-game coin and in-game gifts. That was an incredibly motivating and engaging tactic for that group. We tried it with the Mafia Wars groups, which is a bang-you’re-dead game, not terribly cooperative, more competition. When we held that cooking contest, people were doing spaghetti with severed hands, Mafia themed food. Not all tactics are transferrable, but we were very eager to test and optimistic about if it worked in one game, maybe it will work in another game.

{audio:0:34:50} What did you learn about humans and their purpose and what they care about and how they engage with other people? Those stories, it seems like there’s a common thread among communities that drives social engagement with humans.

{audio:0:35:10} To do this work, you have to love the human race. You actually have to. By that I mean you don’t have to be an extreme extrovert, like I am. A lot of people who do online community work are extreme introverts, and thank god they’re there, because they’re only happy when they’re communicating through a screen. I love to employ those people. But you actually have to be an extreme empath. You have to really be sensitive to the human condition. Once you care about humans, then you learn how to care about what they care about. I think that is an incredible business lesson. In some places it’s called an emotional quotient; there are names for it. Really, if you just give a shit about your customer and understand what they want, then you’ll work to give them what they want. You’ll sincerely and transparently work to make it better for them. Since you’re employed by an entity, if you can marry it to a company goal, then you’ve made a career, as I have.

{audio:0:36:34} I love the human race and I don’t want to sound corny, but that’s what keeps me in it. I wait for the magic. Magic happens when people come together over a shared passion. When we said at the beginning that I was a comic book nerd, who went to business school and eBay came and found me. I just want to return the internet to the gestalt of the pre-internet San Diego Comic-Con of the 1990s. What happened there with people who loved comics was magical. When they met other people from other places that shared their passion for Justice League or Ironman or whatever, marriages happened; it was holy, spiritual communion. The internet collapses time and space to allow us to do that with each other like magic. Like magic. As a person who now runs Oz, runs communities, runs huge convocations online, you’ve got to think about what kind of society do you want to have and build that society. You said, I’ve learned a lot about humans. Absolutely. I’ve learned so much about myself. I’ve always toyed with, should I go back and get a PhD in psychology? Every time I think about it, I’m like, actually, I could teach a PhD in online psychology, because I’ve had experiences with millions of humans from all over the world, from every walk of life, who love every kind of thing.

{audio:0:38:13} What was it about those early comic days online that drove such a magical experience?

{audio:0:38:22} No, they were offline. The magic was you discovered this thing, you were this quiet introverted kid, who wasn’t into sports or whatever and found comic books as a beautiful mythology. We don’t have Greek gods in America. We don’t have Mount Olympus, but we have Superman. It’s an American invention. It’s a very deep desire to believe in something bigger than yourself. When you travelled to a place where you could meet other people who shared that desire, it was religious. It’s a beautiful thing to see and it’s a beautiful thing to feel. Today, there are still analogues, even in this online world. For example, if you’ve ever been to an esports convention, where fans go and watch their heroes play videogames against each other in an arena. The feeling in the air is very energetic and positive and supportive. Really very special. There’s something like that everywhere. It’s why people go to sporting events. It’s why they have a shared communion with the other sports fans of that team. It’s why people get out of bed, to go check in with their Instagram friends. We have something in common.

{audio:0:40:08} How do you compare the desires? For example, the desire of the stories of comics and the passion there, versus the passion of selling products, in GMV, for sellers on eBay or the passion of completing your Farmville, how do you compare the different desires, passions, and what drives different types of people on different platforms? Do you see it different or the same?

{audio:0:40:43} It’s all the same. I’m lucky that I experienced, for example, the comic book universe before the internet because I knew what that shared communion and passion smelled like. I’ve devoted my career to go sniffing that out, among every customer base I work for. When I say art and science, it’s like what about this platform made you commit to it, as a seller? Why is this working for you? What makes it work for you? You’ve got to understand that. Let’s agree that we’re going to say, in my career, I’m trying to find the people who love Superman in a pre-internet world; that feeling among every segment I’ve ever worked for. I’ve got to have a firm handle on that feeling and how to describe it. Then I go do my research. You do research to try and get at that nut. What does it mean? How does it feel? What does it smell like? How does it work? Then you teach other people how it works. As a leader in an organization, once you understand that, you’re like here’s what I know about our segment. At Sephora, they love lipstick. Let’s just talk about lipstick all the time. All they want to do is talk about lipstick. If you talk about it, they’ll buy it. It can be that simple. Could be that simple.

{audio:0:42:30} How would you compare the story of Sephora, which is clearly very different? More of a B2C content-based community versus the market-based at eBay.

{audio:0:42:41} It’s retail. I went from ecommerce to purely digital and gaming, to retail. I’m so happy to tell you that I was one of those people in Silicon Valley who thought retail work in the Bay Area was beneath me. I’m so happy to tell you how wrong I was. If you’re doing retail in the Bay Area, you’re benefiting from all the incredible technology around you. It’s true, people in retail are not going to wake up one day $30 million richer, but they’re going to leave that company smarter than anyone I’ve ever met in high tech. They want to be the best marketers. This was my experience. At Sephora, I’ve never met a smarter group of people in my life and I know I never will. Part of it comes from the absolutely rabid passion the customer feels about beauty. People feel about beauty the way they feel about their pets. It is personal. It is passionate. It is deep. It has everything to do with how you view yourself. It’s so juicy.

{audio:0:44:06} You want to talk about human nature, let’s talk about beauty for the next hour and a half. Even if you are a passive consumer of beauty, you are still a beauty consumer. My assignment was come in and make our beauty offering more engaging. Shira, we’ll handle the products and the retail; you handle making people care. What do we do there? We transcended the transactional. We created entirely emotional relationships with the brand. Now, you’re going to want to know how. I’ll go right back to what I said before. The art and science. What does the customer care about? Give them what they care about. If you own the content, if you own the relationship with the brand or own what gets displayed, then you can control the conversation. Why wouldn’t you? Why wouldn’t you control the conversation. It’s as critical an investment as customer support. It’s your entire retention strategy.

{audio:0:45:22} What surprised you most about the beauty customers?

{audio:0:45:26} I came from gaming. Beauty people are the nicest people on earth. Really, you could be a three-headed medusa and put on a new shade of lipstick and post a picture of yourself and say what do you guys think and a thousand people will tell you, “You go girl. It looks awesome.” Or you could be a three-headed dude and post a picture of yourself with a new shade of lipstick and 7,000 people will tell you it is the most pro you supportive thing. Coming from gaming, where we had a hotline to law enforcement and suicide prevention as a community management. They didn’t even have a trolling policy, when I started at Sephora. They didn’t even have any safeguards because the people were too nice. That’s what I learned is that they’re the nicest people on earth. It’s a really big lesson that the more focused a community is, the more harmonious it will be.

{audio:0:46:35} Was there anything that surprised you at any of the three companies? A strategy that you used in building the community or driving engagement, driving viral growth, that really surprised you that worked.

{audio:0:46:54} The things that worked. After learning it, the first time, of give the people what they want and marry it to a company goal, I guess I was surprised every time how it continued to work. No, it doesn’t seem that complicated. For a lot of people and a lot of companies, they’re afraid of their customers. They’re afraid to engage. They don’t want to hear the truth. I’ve been surprised by the incredible gifts, the emotional and human capital gifts that I’ve received by teaching companies to be more transparent and to open up and to love. Like, they love your brand, why wouldn’t you love them back? What would it mean for you to show that you love them back? I love that moment when the company shows the love and then ROI shy rockets and people stick around longer, and they retain, and they move up. I love that moment. That’s always a surprise.

{audio:0:48:06} How do you show the love? Take Sephora for example, they would have loved their customers, but how do you really show love to the customers?

{audio:0:48:18} One key insight for the Sephora community was they viewed themselves, in their private lives, as being an authority on beauty. In a circle of friends, they were the one who always new. What makes you an authority? We had to get into this, we had to unpack this. We had to understand this. What makes you an authority is knowing what’s coming and knowing how to use what’s coming. That’s newness. Here’s a very simple thing, we always gave the community a little preview of what was coming, so that they could feel great about their dominance in their universe in beauty and be the first to know about it, the first to buy it, the first to try it, the first to show it off and give an opinion. We just gave them news. We leaked news to them. It was like, as I said before, we controlled the content. We controlled the schedule for when the content rolled out. If the product if rolling out next Tuesday, we could tell you, this Tuesday, that it’s coming. That makes tens of thousands of people very happy.

{audio:0:49:50} How would you compare that to the Farmville customer, for example, in showing them love?

{audio:0:49:55} It was the same thing. They loved contests; we knew that about them. In game currency didn’t cost us anything, giving away parts of the game. It was all virtual. Nothing cost us anything. We did a lot of contests and as I said before, what we knew about them was that they were completists; they wanted their farm to be totally complete. We kept reminding them about stuff that may not be on their farm. To take it one step further, I worked on a retention project, in which we met, by phone, the top 100 spenders on Farmville. Those are called whales. I know this is going to knock your socks off, but to be a top 100 you had to have spent $30,000 or more, lifetime, on Farmville. I have spoken to a Farmville customer that spent $70,000 lifetime and one that spent $130,000 lifetime. These people are super-duper fans. Again, art and science. I wanted to get inside their game. Tell me everything about how you’re feeling about the game.

{audio:0:51:11} I went into these conversations with an enormous budget. If these people had told me – because they were our most valuable customers –  my computer is too slow, I had the authority to buy them a new computer on the spot; to just send them a desktop. None of them needed anything, except for more people to play with. That was it. That was the unlock. What did I do? I created a temporary private Facebook group. I put all 100 of these super-duper players in there, without telling them anything. Within 30 minutes, they had all friended each other and started playing with each other. Within 35 minutes on the group, they were sharing folk remedies for rheumatoid arthritis. They became a tribe, instantly. All I needed to tell them was, they play like you. William, I want you to meet somebody who plays 16 hours a day like you do. You were all for it. You want more friends to play with. That’s the art part.

{audio:0:52:28} It just comes back, like you said, to just knowing your customer and wanting to know your customer and show them as much love as possible.

{audio:0:52:35} You’ve got to want it. You’ve got to want to know them. Like I said, this is intimidating to a lot of executives. People who’ve moved so high up in the org that they don’t have customer contact. The reason why I do this work and have made a career out of it and only want to do this work is because it marries four amazing things that never get boring. Customer contact, straight ahead marketing, just plain everyday textbook marketing, data science and technology. This work, I get equal parts. I can always be dipping down into one of those strategic pillars.

{audio:0:53:20} In your opinion, what is crucial about a healthy community?

{audio:0:53:26} We’re in an era now of incredible divisiveness and it gets a lot of press. By the way,  Twitter is not a community; it’s a broadcasting platform. When you think about the bad press, or what’s gone wrong with social media, let’s not talk about Twitter. What goes right is a purpose. We talked about intrinsic and extrinsic value. A purpose and rules. You cannot be afraid to enforce the rules. A previous boss, Chris Larsen, who is the founder of E-Loan and now Ripple, told me in my first week working for him, I want you to make decisions every day like you’re the mayor of Chicago not of Cincinnati. Cincinnati is a lovely town, but what’s news in Cincinnati is graffiti on a school bus. What’s news in Chicago is of a very different scale. I thought that was incredible advice. Make decisions every day like you’re the mayor of an enormous town. Then enforce them. Have a police force. Have emergency services. Have support, food. Make sure everybody has a full drink, keep the ice cubes cold. Whatever it is, keep it running. Keep the town running. What does that mean? Keep the lights on. Keep the lights off. You make the rules. You publish them, you enforce them. Every time you enforce them, you point at the rule and you say, I took you down, I deleted your comment because it violates our whatever policy. If Facebook had done more of that in the beginning, they wouldn’t be in the hot water that they’re in now.

{audio:0:55:31} How would you advise young companies to kickstart a community?

{audio:0:55:40} I think we do have to go back to intrinsic value. You’ve got to have a point of view and something to say. There’s a very interesting couple of companies, social enterprises here in Australia. For example, there’s a company making toilet paper. It’s mail order, it’s direct to consumer and it’s 100% recycled. It’s probably medium quality, but it is called, Who Gives a Crap. The whole mission is giving a crap about the environment. From the packaging to the emails to the messages from the CEO to all of their social, it is a mission-driven company. They compete on price, they’re competitive, but they have an edge. Their edge is, we’re saving the earth by getting you to not buy net new paper products. They do education and campaigns and everything else. They have a community around it. My advice to them is, why wouldn’t you own the entire conversation about wasted paper, globally? Your whole conversation; you can own it. You’re actually an authority. You’re a manufacturing authority. You figured out how to do the supply chain. You could easily move into copy paper for my computer. You could easily move into all of these other types of paper goods that I use, now, you’re a global authority. I invite you to be the convener on this topic. Then when you convene, and you use the art and science approach and you listen to your customer, you find out what else matters to them. You end up developing your manufacturing plan for the next 10 years. There’s so much you can gain from opening up.

{audio:0:57:38} In terms of kickstarting the community, it just comes back to a laser focus on the customer and what the customer wants.

{audio:0:57:47} Yes, and what the company wants and what the company has to offer. This company makes toilet paper, so what? It’s a very competitive space. It’s all about cost. It’s a commodity. They’ve made it not a commodity. They’ve made it a prestige item.

{audio:0:58:07} Where do you think most companies go wrong with building communities?

{audio:0:58:10} They do it too early before they’ve gotten to know their customer. They pick a lane too early. Or they pick a lane before their sales are solid, or they don’t know enough about their data to know who’s our core. If 60% of their sales are repeat customers, that’s a good indication that there are people there who love that thing. Sometimes they go too early and all communities fall apart when rules aren’t enforced and when the community doesn’t see a strong hand running it. Communities don’t all have to be like Facebook. It’s not all a free for all. It’s like, you’ve got to say, our community is about paper science and paper ecology; if you want to talk about auto tires or recycling shoes or something else, go somewhere else. You’ve got to enforce that.

{audio:0:59:11} Is there anything else, in terms of what you’ve learned over the years about communities and building purpose, that we haven’t discussed?

{audio:0:59:26} My advice would be this is a nascent science. It’s almost always a good idea for the right reasons. Especially if you want your online community or your engagement strategy to be your retention play. A high growth company or a new company that’s in a very growth-oriented phase, in terms of timing, it might not really be the time. Once you realize who your repeat customers are and if you have something to say and if they have something to say about you, then why wouldn’t you own the conversation? Why wouldn’t you attempt to transcend the transactional so that the customer is in a relationship with your brand.

{audio:1:00:23} That comes with a lot of stuff. You’ve got to be more transparent. You can’t pick up the phone one time and hang it up. Actually, once the line is open, it’s open two ways and it’s open forever, so you’ve got to fund it. You have to have a strategy. I’d be happy to help you create that, find me on LinkedIn. You can start small. You can say, next week on our Facebook page, or on Reddit, from 3:00pm to 4:00pm our CEO will be there taking your questions in an ask me anything.  You can do all of that. Start small. See if there is interest. See if it’s not all anger. If it is all anger, then listen and come back with a response. Why wouldn’t you?

eBay & Zynga: Building Online Communities

How eBay launched and scaled the PowerSeller program to drive retention and higher GMV

How marketplaces approach serving both B2C and B2B suppliers

Why gamification is not crucial for all online marketplaces

How to think about driving engagement and retention in online communities

Risks for supplier revolts due to marketplace imbalances

Online community comparison between eBay sellers and Farmville players

eBay & Zynga: Building Online Communities

Former Manager, PowerSeller Program at eBay & Global Community Director at Zynga

inpractise.com/articles/building-online-communities-ebay-zynga

Why is this interview interesting?

Executive Bio

Shira Levine

Former Manager, PowerSeller Program at eBay & Global Community Director at Zynga

Interview Transcript

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eBay & Zynga: Building Online Communities(June 9, 2020)

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