HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS HIS INC. MAGAZINE COLUMN ON EBAY

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

The 1 Crucial Innovation Lesson Every Business Owner Should Learn From eBay

The company I first encountered as a Pez dispenser trading post serves as a fascinating case study for what businesses need to do to retain users.   

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

Jul 15, 2025

 

Having collected Pez dispensers since I was a kid and having an embarrassingly large collection at the age of 50 (which my daughters and granddaughters had no interest in), I was excited to learn in 1995 about what came to be called eBay—an online auction platform where you could buy, sell, and swap Pez dispensers relatively securely with total strangers from anywhere in the country. I became one of its earliest and most enthusiastic participants, bought and sold plenty of Pez, and made some new friends along the way. I also had dozens of classic lunchboxes, but that’s another story.  

The eBay founders thought they were building a marketplace for their friends and family. What they also created was an amazing discovery tool whereby passionate collectors could find similar souls who were just as crazy about these little plastic devices (and zillions of other collectibles) as they were. Entrepreneurs are constantly trying to develop new businesses and to create, exploit, and sustain demand and desires for their products and services. The beauty of dealing with collectors of any kind is that there’s already a built-in passion for the objects which the exchange experience merely needs to facilitate, channel, and monetize. It’s always easier to ride the horse in the direction it’s already headed.

Most people know some version of the eBay origin story—founded by Pierre Omidyar as a side project to help his girlfriend trade Pez dispensers online—and everyone knows that it grew rapidly from an auction site into a global e-commerce marketplace because it tapped into an underserved analog population and pulled those folks into the digital age. The speed and scale of the immediate nationwide adoption was amazing. 

What far fewer people appreciate is that eBay is yesterday’s news—cluttered, dated, and slow. It’s afflicted with the same disease as one of Yogi Berra’s favorite restaurants: It’s “so crowded that nobody goes there.” In an age where time is everything and patience is scarce, eBay looks, operates, and feels like molasses. It turns out that trying to be all things to everybody, fulfilling at best by FedEx, and making its connections to its users a mile wide and an inch deep might have been a great formula for volume and growth metrics, but over time, it made the site cumbersome and unfocused. 

These days, everyone wants just what they’re looking for, right when they want it, and instantly deliverable. EBay opted to go wide instead of deep and never really owned its customers in a world where alternatives were only a click away. Without constant change, innovation, and site improvements, eBay was never going to build lasting connections, a committed community, or loyal long-term users.   

EBay opened the digital marketplace but didn’t keep pace with the nature and needs of the new breed of collectors—especially passionate sports fans who were searching for community and interactivity as avidly as they were for commerce, and just as interested in buying something scarce and brand new as they were in owning decades-old hats, helmets, jerseys, shoes, and uniforms. It turns out that nostalgia is totally pliable—collectors can long for products created in their youth just as fervently as for goods unpacked and shipped yesterday.   

These newbies weren’t the hermits, housewives, cat ladies, and hoarders of old. They were millions of solitary kids, DIY techies, and fanatical sports fans (often all three rolled into one) who were looking to be a part of something that played to their passions, connected them to their peers, and encouraged them to engage and participate. Not surprisingly, the opportunity to create new venues and marketplaces to serve today’s hordes of hyped-up young collectors and dramatically speed up and streamline the buy-sell process was far too good a prospect to be overlooked for long. 

First eBay, then e-sports

An early instance of the demand for new experiences was the explosion of e-sports as a spectator event. Although I never understood why watching others play a video game could be a contagious and addictive experience, it’s clear that the next several generations don’t agree. Starting in 2017, we saw whole stadiums like the Bird’s Nest in China or the Barclay’s Center in Brooklyn converted into viewing venues where players sat on a stage in front of computers while the gameplay was projected on huge video screens throughout the entire space. Fans bought tickets, merchandise, and gaming equipment, while millions of additional fans watched the competitions at home online through Twitch or YouTube. These players and viewers were ripe for the digitization and gamification of collecting and online retail.  

EBay created static stores, but not stirring streams; illustrative images, but not live videos; and collector interest, but not real-time excitement and interactivity. Text-based auctions simply made no sense for the Twitch generation. The need for speed, sound, and action was clear, so into the void stepped Fanatics Live, a dedicated, live-streamed collectibles and trading card platform which moved online retail to the next level and made it a gamified, community-based, compelling experience. In some ways, Fanatics Live is just the newest instance of the web’s ability to smash together context, connection, community, and commerce.  

Cameo was an early case of connecting fans and followers (especially in sports) with their favorite athletes, performers, and celebrities and monetizing the experience. Bemyfriends was a platform provider offering bands and other acts the ability to build, own, and control their own platforms, finances, and destiny by owning the IP and also directly connecting with their fans. 

And now, Fanatics Live will enable the most entrepreneurial fans and fanatics alike to build their own online mini businesses. The formula is simple—virtually no barriers to entry, modest production costs, all underlying technology provided by third-party platforms, immediate action and gratification, and a chance to make a decent living on their own as well. 

Fanatics Live reports that there are already mini-merchants like Stephanie from MamaBreaks and Joel from Soccercrds who are allegedly making six-figure incomes while working from home. This is one impressive side of their multi-channel marketplace. And to be very clear, the success of the overall Fanatics Live venture will have a lot to do with the performance, professionalism, integrity, and customer service provided by these micro-merchants.  

But the most critical metric—and the real path to the long-term success of this venture—is the degree, depth, and scale of the engagement of the participants. Connecting passionate peers to other peers thru real-time video events like card reveals and pack openings; enabling direct chats between and among buyers, sellers and traders; and facilitating swift and easy transactions create exceptional levels of cost-effective engagement.

On a global basis, Fanatics Live users spend more than an hour a day on the site, which is 25-30 percent longer than Instagram’s comparable numbers. More than 70 percent of the Fanatics Live users take advantage of the chat feature, and this consistently leads to sales. On a monthly basis, loyal and committed users make an average of more than 15 transactions a month.  

Letting the fans drive the majority of the action and the transactions, relying on substantial amounts of user generated content, turning motivated users into platform advocates, and building positive word-of-mouth are all critical to inexpensive global expansion and to consistent user retention. But all of this activity and goodwill is predicated on a foundation of authenticity and trust which, like it or not, the team at Fanatics Live will need to assure, adjudicate, and otherwise backstop, just like Amazon regulates and manages its third-party vendors. It’s not an easy undertaking, and I’m not sure that the guys running the Fanatics Live shop understand that becoming referees is an inevitable part of the deal. 

They’re focused at the moment on generating buzz, growth, excitement, and millions of happy fans. But in the long run, to stay in business, it’s far more important to be trusted than to be loved—and much harder.

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

How Collectibles Got Co-opted by Online Gambling--And Why It's Now Spreading to Diet Drugs

Collecting objects like maps or coins used to be a passion. But social media and online gambling behavior has turned everything into a competition. Welcome to the Ozempic Olympics

 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JUL 9, 2024

As a lifelong collector of stuff -- stamps, coins, lunchboxes, mechanical banks, Pez dispensers, magic tricks, CDs, laser disks, bizarre pop bottles, and figurative paintings, drawings and sculptures -- I get the mindset.  I have been exposed to most of the classic and crazed behaviors of the frantic folks who pursue their precious collectibles with an inexplicable but persistent passion. I confess to having made some ludicrous pilgrimages of my own in search of promised treasures.

One of the more obvious things you learn is that whatever desires and emotional needs drive collectors, it has very little to do with the actual economics or the likely long-run value of the investments they are making. Most of us are in it for the moment and the memories rather than the money. Thinking otherwise is a delusion.

By and large, collectors are knowledgeable and serious adults and their pursuits are well-structured into trips to recognized and reputable dealers, shows and galleries, aficionado gatherings and, of late, web-based auctions. They compete for the most prized items, but generally in a dignified and gentile manner and in accordance with the long-standing rules and customs that govern their particular niches. Form and fairness are an important part of the style and substance of the search. As in every business, there are fakes, phonies, and scammers galore, but they rarely last for long.

However, with the advent of new social media driven frenzies, collector competitions, sneaker drops and other promotional and demonstrably commercial activities - be it shoes, bags, bracelets, t-shirts, caps, dolls, action, toys or anything else designated to be of the moment -- the environment and gathering process has been radically changed and not for the better. A great deal of the emotional investment in the collecting and aggregating process today has much more to do with bragging rights, notoriety, and loving the competition than it does with loving the things being sought.

These people are aggressively driven not because they want to collect notable objects but because they're captive to certain brain chemistries that exist somewhere between FOMO (fear of missing out) and the same kinds of fantasies that sustain lotteries and sweepstakes. They might just end up being the one who wins the big prize or finds the golden ticket. We're seeing similar mindsets and behaviors with millions of young men who've migrated from gaming to mindless and non-stop online gambling. These guys will tell you with a straight face that sports gambling is a reasonable investment vehicle for their excess funds, at least until those funds disappear.  

Sadly, in these newer, feckless quests, it's become obvious that almost any means now justifies the ends. Stories regularly abound about desperate, devious and grasping collectors bribing suppliers and store employees, hacking and manipulating online stores, lying, cheating and stealing from their peers.  And, especially today, victimizing the constant flow of incoming and inexperienced newbies who are ripe for picking. All of this wouldn't matter terribly much as long as it involved fast-fashion, footwear and handbags, cheap plastic products, deformed and distorted dolls and a population of fools and suckers who might very well deserve whatever treatment and comeuppance they ultimately receive.

But we're seeing a frightening migration of these types of reckless, all-consuming behaviors into a new area with far more threatening and destructive consequences and where the actions are likely to impact the health and well-being of millions over the next few years. I'm talking about the exploding competition for the scarce (and costly) GLP-1 drugs such as Ozempic and Rybelsus which are rapidly becoming the daily compulsion of millions of consumers. Forget the rising issues with counterfeits, or black-market channels for obtaining them, and just consider the likely and obvious behavior of current users who are desperate to get their shots.

Driven by many of the same needs and desires as other contemporary "collectors," these are normal, law-abiding folks who are beyond anxious and utterly consumed by the effort to get their hands on their next Wegovy doses. They are discovering that ready and dependable access has become a weekly competitive war and a brutal battle to track down doses that appear without notice and promptly disappear into the hands of the lucky few patients whose timing was fortunate that week. But the searches are getting harder and the successes fewer.

There's a cruel irony to this situation. The drugs, initially targeted at type 2 diabetes patients, eliminate one set of mental demands and cravings relating to food but have created a different set of needs and emotions at the same time. The semaglutides work extremely well by suppressing the brain chemistry that creates the reward structures for constant or excessive eating. And it's pretty clear that scientists will also discover that the same kinds of drugs will help address other kinds of cravings that drive problematic, troublesome, unhealthy and even illegal behaviors. All to the good. If, and only if, there are enough of these drugs to go around and prices can be reduced to more commercially reasonable levels.

No one expected or anticipated that the very scarcity of these wonder drugs and the exponentially growing demand for them would instantly create -- not simply scarcity and material shortages in the materials -- but also trigger other chemistry in the brain leading to quasi-addictive and competitive behaviors by the current and fortunate users which closely resemble the actions and behaviors of smokers, drug addicts and other dependent individuals. Sadly, as the scarcity persists, there's little to suggest that any of these behaviors will improve. That's not an inviting or encouraging prospect, but it's another case of a problem we see coming, but don't do anything to address or mitigate.

It's hard to imagine at the moment, but pretty soon we may see your obese Uncle Albert sulking and lurking around the shady parts of town trying to score his Mounjaro shot for the week. You can't always get what you want. But if you try sometimes, well, you just might find, you get what you need.

PEZ DISPLAYS AT THE LOFT