Thomas Friedman - The World is Flat

eBay

Meg Whitman, the CEO of eBay, once told me a wonderful story that went like this: “We took eBay public in September 1998, in the middle of the dot-com boom. And in September and October our stock would go up eighty points and down fifty in a single day. I thought, 'This is insane.' Anyway, one day I am minding my own business, sitting in my own cubicle, and my secretary runs over and says to me, 'Meg, it's Arthur Levitt [chairman] of the SEC on the phone.'” The Securities and Exchange Commission oversees the stock market and is always concerned about issues of volatility in a stock and whether there is manipulation behind it. In those days, for a CEO to hear that “Arthur Levitt is on the line” was not a good way to start the day.

“So I called my general counsel,” said Whitman, “who came over from his cubicle, and he was white like a sheet. We called Levitt back together and we put him on the speakerphone, and I said, 'Hi, it's Meg Whitman of eBay.' And he said, 'Hi, it's Arthur Levitt of the SEC. I don't know you and have never met you but I know that you just went public and I want to know: How did it go? Were we [the SEC] customer-friendly?' And so we breathed a sigh of relief, and we talked about that a little bit. And then [Levitt] said, 'Well, actually, another reason that I am calling is that I just got my tenth positive feedback on eBay and have earned my yellow star. And I am so proud.' And then he said, 'I am actually a collector of Depression-era glass, post-1929, and so I have bought and sold on eBay and you get feedback as a buyer and seller. And I thought you would just like to know.'”

Every eBay user has a feedback profile made up of comments from other eBay users who have done transactions with him or her, relating to whether the goods bought or sold were as expected and the transaction went off smoothly. This constitutes your official “eBay reputation.” You get +1 point for each positive comment, 0 points for each neutral comment, and -1 for each negative comment. A colored star icon is attached to your user ID on eBay for ten or more feedback points. My user ID on eBay might be TOMF (50) and a blue star, which means that I have received positive feedback comments from fifty other eBay users. Next to that is a box that will tell you whether the seller has had 100 percent positive feedback comments or less, and also give you the chance to click and read all the buyers' comments about that seller.

The point, said Whitman, is that “I think every human being, Arthur Levitt or the janitor or the waitress or the doctor or the professor, needs and craves validation and positive feedback.” And the big misconception is to think that it has to be money. “It can be really small things,” said Whitman, “telling someone, 'You did a really great job, you were recognized as doing a great history paper.' Our users say to us [about eBay's star system], 'Where else can you wake up in the morning and see how much people like you?'”

But what is so striking, said Whitman, is that the overwhelming majority of feedback on eBay is positive. That's interesting. People don't usually write Wal-Mart managers to compliment them on a fabulous purchase. But when you are part of a community that you feel ownership in, it is different. You have a stake. “The highest number of feedback we have is well over 250,000 positive comments, and you can see each one,” said Whitman. “You can see the entire history of each buyer and seller, and we have introduced the ability to rebut... You cannot be anonymous on eBay. If you are not willing to say who you are, you should not be saying it. And it became the norm of the community really fast... We are not running an exchange-we are running a community.” Indeed, with 105 million registered users from 190 countries trading more than $35 billion in products annually, eBay is actually a self-governing nation-state-the V.R.e., the Virtual Republic of eBay.

And how is it governed? EBay's philosophy, said Whitman, is, “Let's make a small number of rules, really enforce them, and then create an environment in which people can fulfill their own potential. There is something going on here besides buying and selling goods.” Even allowing for corporate boosterism, Whitman's essential message is really worth contemplating: “People will say that 'eBay restored my faith in humanity'— contrary to the world where people are cheating and don't give people the benefit of the doubt. I hear that twice a week... EBay offers the little guy, who's disenfranchised, an opportunity to compete on a totally level playing field. We have a disproportionate share of wheelchairs and disabled and minorities, [because] on eBay people don't know who you are. You are only as good as your product and feedback.”

Whitman recalled that one day she got an e-mail from a couple in Orlando who were coming to an “eBay Live” event at which she was speaking. These are big revival meeting-conventions of eBay sellers. They asked if they could come backstage to meet Whitman after her speech. “So after the keynote,” she recalled, “they come back to my green room, and in comes mom and dad and a seventeen-year-old boy in a wheelchair-very disabled with cerebral palsy. They tell me, 'Kyle is very disabled and can't go to school, [but] he built an eBay business and last year my husband and I quit our jobs, and now we help him—we have made more money on eBay than we ever made on our jobs.' And then they added the most incredible thing. They said, 'On eBay, Kyle is not disabled.'”

Whitman told me that at another eBay Live event a young man came up to her, a big power seller on eBay, and said that thanks to his eBay business he had been able to buy a house and a car, hire people, and be his own boss. But the best part, said Whitman, was that the young man added, “I am so excited about eBay, because I did not graduate from college and was sort of disowned by my family, and I am now the hit of my family. I am a successful entrepreneur.”

“It's this blend of economic opportunity and validation” that makes eBay tick, concluded Whitman. Those validated become transparent as good partners, because bad validation is an option for the whole community.

Bottom line: eBay didn't just create an online market. It created a self-governing community-a context-where anyone, from the severely handicapped to the head of the SEC, could come and achieve his or her potential and be validated as a good and trustworthy person by the whole community. That kind of self-esteem and validation is the best, most effective way of producing dehumiliation and redignification. To the extent that America can collaborate with regions like the Arab-Muslim world to produce contexts where young people can succeed, can achieve their full potential on a level playing field, can get validation and respect from achievements in this world-and not from martyrdom to get into the next world-we can help foster more young people with more dreams than memories.

India

If you want to see this same process at work in a less virtual community, study the second largest Muslim country in the world. The largest Muslim country in the world is Indonesia and the second largest is not Saudi Arabia, Iran, Egypt, or Pakistan. It is India. With some 150 million Muslims, India has more Muslims than Pakistan. But here is an interesting statistic from 9/11: There are no Indian Muslims that we know of in al-Qaeda and there are no Indian Muslims in America's Guantanamo Bay post-9/11 prison camp. And no Indian Muslims have been found fighting alongside the jihadists in Iraq. Why is that? Why do we not read about Indian Muslims, who are a minority in a vast Hindu-dominated land, blaming America for all their problems and wanting to fly airplanes into the Taj Mahal or the British embassy? Lord knows, Indian Muslims have their grievances about access to capital and political representation. And interreligious violence has occasionally flared up in India, with disastrous consequences. I am certain that out of 150 million Muslims in India, a few will one day find their way to al-Qaeda-if it can happen with some American Muslims, it can happen with Indian Muslims. But this is not the norm. Why?