March 2004
Product Management as a Service Organization
Speaker: Judy Kirkpatrick, Global VP, Product Management, eBay

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Judy Kirkpatrick, VP Global Product Management eBay, presented at the March 3rd event of the SVPMA on Product Management as a Service Organization. Judy described the service mindset and how it fits in with eBay's business structure. She then provided a number of examples to illustrate how it works in practice.

Judy started her career as a sales person. It was in sales that she developed her passion for service and learned the value of listening to the customer. She then formed the product marketing team to launch Adobe Acrobat and is responsible for putting that product on the map. Her internet career started at high-tech book seller FatBrain, which was sold to BarnesandNoble.com. Before joining eBay, Judy then worked at Palm tackling the challenge of selling Palms at the enterprise level.

Judy defines service as the contribution to the welfare of others. The product management group applies this to working with buyers and sellers to remove the friction from trade, set the product vision, and ensure that eBay's platform scales. Product Management serves three main groups, the US unit, the International Unit, and PayPal. The group works with their cross-functional partners to improve trust and safety, billing and collections, and customer support. Their mission is to design and build the people's most efficient and abundant marketplace.

eBay has three key levers for achieving growth:

One example of increasing activity is to allow multi-item checkout. This removes the aggravation of purchasing multiple items and having to checkout multiple times. eBay also moved the "bid" button to the top of the screen next to the price, making it easier for users to place bids.

So what does it take to offer excellent service and how does eBay put this into practice? Judy recommends avoid failing the customer twice, basing decisions on what the customer wants and expects, and thinking and acting in terns of the entire customer experience. With this in mind, eBay releases an average of 14 improvements to the site every week. eBay calls this a train. The trains rollout on a consistent basis. New features have seats on the train. A train has a fixed amount of development capacity. One seat currently equals 15 days of development. eBay supports about five million lines of code and rolls out 60,000 lines of new or updated code per train. They support 90 million registered users from more than 200 counties. Every day, these users view more than 700 million pages and transact more than $70 million of business. eBay's quality is currently at greater than five sigma with only a few hundred open production bugs.

Projects start at the Business Unit level with a Business Requirements Document (BRD). Product Management translates the BRD into a scope request with high level requirements. The technology group then scopes the project. Next, the business unit manager develops the business justification (i.e. NPV) and works with the product council to get it approved. Once approved, product planning works with development to ensure that resources are available and the project is "booked" on a train. Product Management writes the PRD and then works with a User Experience and Design Manager to create the interface, graphics, and conduct usability testing: a couple of design principles include don't make the user work and provide a well lit path. Development and architecture code the feature, and QA tests the feature. Finally, It is rolled out the end user. Feedback is received and NPV is assessed against the original target.

With an intense focus on serving their constituents and end customer, eBay's product management group has assisted in the company's meteoric growth and creating a product of which customers can't get enough.

Understanding and defining customer value is a real challenge. The basic value equation is benefit realized minus cost. Some companies like to look at total cost of ownership as one method, but this is difficult because everyone sees it differently. Susan recommends going back to product management basics and following the customer around. While at AT&T she once spent six weeks at a customer site understanding how AT&T’s systems fit into the larger whole of the customers operations.

Companies achieve leadership on one of three dimensions, operational excellence, customer intimacy, and product innovation. Examples of operationally excellent companies are Dell and Starbucks, while Nordstoms focuses on customer intimacy, and Intel is a product innovator. To win, a company must master one of these value dimensions and be proficient in two.

The third step is identifying market-anchors. Having this lens enables employee teams to retain focus and act autonomously. Starbucks, for example, excels in a number of areas, including branding, merchandising, and atmosphere, to list a few. But its anchors are convenience (location and ordering) and quality/consistency. Starbucks has redefined the living room.

Market anchors can then be used to move towards market leadership. This starts by identifying where you are now and where you are relative to your competition. Next starts a value chain analysis. Pulling from Michael Porter, Susan defined the primary activities as Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales, and Service. The support activities are Procurement, Technology Development, Human Resource Management, and Infrastructure. Product managers can have a significant influence over the primary activities.

Susan ended by asking everyone to consider what the one area on which their company should really focus.