Whitman Meg - The power of many: values for success in business and in life

W hat is the right thing to do here?

Looking back, I dont think I would have had to ask the question if my team hadnt been so exhausted.

It was June 11, 1999, and I was walking down the hall at eBay when I saw and heard a noisy group of my senior staff in one of our conference rooms. It had been, to put it mildly, a rough day and a half, and most of us still looked like the walking woundedgimlet-eyed, glum, both wired and tired from stress and coffee and lack of sleep. We had just experienced a twenty-two-hour system outage that had nearly propelled us to a prime spot on the list of the most spectacular business failures of all time. The crisis was far from over still. We had been publicly traded for only a short time but had a market capitalization larger than that of Sears, Roebucka fact one news commentator pointedly noted when he explained that our system shutdown was the equivalent of all the Sears stores in the country locking their doors simultaneously and admitting they didnt know when they might reopen.

Our technical team had at last brought the system back up. Sort of. Wed finally been able to pull down the huge sheets of brown paper that wed taped over the first-floor windows to avoid the hordes of camera crews from CNN and the local stations. Unfortunately, our system was still unstable, still crashing intermittently, still desperately in need of a thorough overhaul. The even worse reality was that we had thousands of frustrated and angry eBay community members. Our system crash had closed their doors as well.

I poked my head into the meeting room and asked what was going on. The group was discussing our service agreement with eBay sellersthose fine-print details that govern a transaction but which people tend not to read. One of the things spelled out in the fine print was that, under certain conditions, eBay would refund the listing fees on auctions that were disrupted by a system outage. At the time, eBay had more than 2 million active auctions. What did we owe those sellers? According to the agreement, we owed refunds only to the sellers in auctions scheduled to end during the period in which we were down. But we realized that all auctions, not just those scheduled to end during the outage, had been disrupted. The team figured that the difference between adhering to the letter of the agreement and offering a refund to every single seller could amount to almost $5 milliona significant number for a company whose total revenues the previous quarter were $34 million. A full refund to all sellers would mean we would miss our quarterly earnings projection, which could very easily cause Wall Street to lose confidence and the stock to plummet.

Listening to the conversation, it was clear to me that some voices in the group were trying to rationalize the smaller refund.

What is the right thing to do here? I asked, and then I left the room.

Rajiv Dutta, who was in our finance group at the time and later became our chief financial officer, subsequently told me that the debate ended immediately. We would refund listing fees to all sellers who had active auctions when the site crashed. Whats more, we decided that going forward, we would refund fees anytime we had an outage that lasted more than two hours. We also sent a letter to our users that said, in part, We know that you expect uninterrupted service from eBay. We believe that this is reasonable, and we know we havent lived up to your expectations. And we apologized.

People almost always know what they