Pierre Omidyar started eBay (EBAY ) with the hope of using the Internet to create a truly efficient market, open to individuals and not just large companies. But he never dreamed how much people would be able to empower themselves online. That experience got him thinking that the same dynamic could be applied well beyond the online marketplace.
Now, Omidyar and his wife, Pamela, are devoting much of their energies to a new field: philanthropy. But their Omidyar Network is also funding private companies that encourage the development of bottom-up power. In a recent interview with Robert D. Hof, BusinessWeek's Silicon Valley bureau chief, Omidyar talked about where his experience at eBay has led him and what's coming next. Edited excerpts of their conversation follow:
Q: Did you aim for eBay to have a social dimension, even a social value?
A:When I started eBay, it was a hobby, an experiment to see if people could use the Internet to be empowered through access to an efficient market. I actually wasn't thinking about it in terms of a social impact. It was really about helping people connect around a sphere of interest so they could do business. That's what our business model was based upon. That's where we got revenue.
But within months, I started to see the personal interactions between people. That's when I began to realize that I needed to help people understand that they could give the benefit of the doubt to somebody and that they wouldn't be disappointed. I needed to help people really understand that people are basically good.
Q: How did such a seemingly utopian idea work?
A:What makes eBay successful -- the real value and the real power at eBay -- is the community. It's the buyers and sellers coming together and forming a marketplace. It's really this "of the people, by the people, for the people" environment. It's a very bottom-up environment. It's not the kind of approach that's top-down, centrally directed.
Q: Are there certain ways of doing things at eBay that can be applied more broadly?
A:There are 120 million people who are members of eBay, and over the last 10 years, they've learned how to trust a complete stranger. eBay's business is based on enabling someone to do business with another person, and to do that, they first have to develop some measure of trust, either in the other person or the system. eBay's business could not have been successful unless it had that impact.
We looked at that, and we said, "Heck, eBay can clearly have this impact, maybe there are other businesses and other business models that can only be successful if they have a social impact." I think there's a potential for a lot of interesting business models that share with eBay the same principle.
Q: Omidyar Network has invested in several companies and organizations, such as Second Life, an online multiplayer world; SourceForge, a site for collaborating on open-source software projects; Socialtext, a social-software firm; and Meetup, an online group-forming site. What do they all have in common?
A:They're all about connecting people. That's the first step. It's enhancing the richness of connections between people. What's interesting about all these things is that once people are connected, they're discovering some power.
They're discovering that they can contribute to a community, which is an empowering experience. They're discovering that they can help influence ideas, that they can create powerful tools that other people can build on, that they can create content that other people value. It's the same human mechanisms at work across these very different entities.
Q: How's the Internet driving all that?
A:We have technology, finally, that for the first time in human history allows people to really maintain rich connections with much larger numbers of people. It used to be, your connected group was really your immediate community, your neighborhood, your village, your tribe. The more we connect people, the more people know one another, the better the world will be.
Everywhere, people are getting together and connecting. And using the Internet, they're disrupting whatever activities they're involved in. It's because it's a fundamental shift in power toward the bottom, toward the people as they organize themselves, and away from a small group of people who want to impose a policy top-down. That's really the promise of the technology, and we're seeing it in all these fields.
Q: A lot of the groups and companies you've been funding involve people cooperating and sharing talent, resources, whatever, using the Internet. How far can that go?
A:You frame it in a different way than I thought about. What I'm really focused on is connecting people around shared interests, so together they can make good stuff happen. I'm more focused on helping people discover their power as individuals, but through those connections with one another.
I think the real power is going to be people pursuing their own interests, connecting with others who share those interests, and having a combined impact on the world around those interests. They may do that through a commons structure, or they may not.
Self-interest is a powerful motivator. The nice thing about eBay is that it's very clearly based on self-interest. You've got sellers interested in getting the highest price for their item, and buyers interested in acquiring the item, yet somehow they agree on a price. So even through the pursuit of your own self-interest, by connecting with other people you do create some shared value.
Q: What's catching your eye lately?
A:We've done a little bottom-up media with OneWorld [a Web portal on social-justice issues that encourages people to contribute their own material]. I have a sense that the traditional media hasn't been aggressive enough talking about important issues. The empowering nature of people reporting their own news, speaking out, and challenging governments and even traditional media sometimes is a very powerful thing.
I don't think it's a panacea. What we see in the blogging community is that it's very easy to focus around radical points of view. I think that's totally fine. But it does tend to create centers of gravity around polar opposite points of view, and that's a challenge for our time.
Q: Do you think these bottom-up efforts will disrupt a lot of existing ways of doing things?
A:I'm not looking to be disruptive. We want to explore and support these new models that are bottom-up and empowering to people and hopefully advance the state of the world in that process. It doesn't necessarily involve removing the old players.
Edited by Patricia O'Connell