The bloom has gone off the eBay rose recently, so it is interesting to think about what went wrong at what was almost the perfect start-up success. Many people critiqued eBay for buying Skype at too high a valuation, but that seems like a tactical error only. The big issue is that they lost sight of what made eBay special when they started selling mass-produced stuff. There is something about being a public company, with investor pressure for endless hyper growth well beyond the natural growth constraints of the market, that seems to drive this kind of brand-destroying diversification.
Selling off inventory from big companies (eBay’s diversification) may be a great business, but it was not what made eBay magical. Garage sales, antique shops, auctions… these all have a bit of magic and romance. It is about finding something unique and special.Handmade goods have the same appeal.
Distributed Mass Customization: Is Etsy the Next eBay? - ReadWriteWeb