As annoying and expensive as losing good employees may be, there are advantages to the source company. Investors may place more trust in the projections of those companies whose managements are highly regarded both for their skills and their abilities to execute strategy. Such companies also attract talented young people looking to hone their craft in an organization which will purposefully provide them with most up-to-date tools and procedures, then encourage them to demonstrate their ability in a demanding environment. This improves the company's performance by enabling it to secure people it might not otherwise attract, exponentially increases the value of the individual's personal marketability and creates an alumni network for the organization from which it can draw a variety of benefits - such as more good people and advantageous deals - over time.
That eBay has now joined the ranks of such companies known for their repositories of talent may be a surprise to some who do not understand its innovative component pieces like PayPal or the gifted leadership that has served it, especially when compared to some of the high-wire egos running other Silicon Valley firms. But that the tech industry is now becoming known for the talent it produces in fields indirectly related to technology also speaks to the centrality of that experience in this economy. JL
Emily Chasan reports in the Wall Street Journal:
EBay has become a hot house for CFOs in part because it has enough resources to invest in grooming up-and-coming financial talent and enough breadth to offer the best prospects hands-on experience running their own operations.
Meet the eBay Mafia.
That is the tongue-in-cheek name for the at least 20 executives who have become chief financial officers in Silicon Valley and beyond over the past three years after training in the big e-commerce company's finance department.
Many of these eBay Inc. alumni stay in touch with one another, regularly sharing tips about the growing pains of startups and initial public offerings, while waxing nostalgic over a bottle of Cabernet Sauvignon at a trendy San Francisco restaurant.
The list of eBay veterans who now are corporate-level CFOs includes Rob Krolik at Yelp Inc., and Sean Aggarwal at Trulia Inc., who have all taken their companies public in the past two years. Startups with former eBayers at the financial controls include the online clothing retailer ModCloth Inc., digital-video company Roku Inc. and online ticketing company Eventbrite Inc.
"A whole bunch of us have come out of the eBay and PayPal fold," said Trulia's Mr. Aggarwal, who was a vice president of finance at eBay's PayPal subsidiary. "We're all helping each other out."CFO Factory
EBay has become a hot house for CFOs in part because it has enough resources to invest in grooming up-and-coming financial talent. Learn more about the executives who have moved on from eBay to manage successful businesses.
Source: the companies, LinkedIn
Chief Financial Officer EBay Unit Role at eBay New Company New Company Start Date Sean Aggarwal PayPal VP of Finance Trulia 12/2011 Nabeel Ahmed eBay Finance Director, Technology Wanderful Media ( former CFO MarketTools Inc.) 2/2013 Erik Bardman eBay CFO for eBay Marketplaces Roku Inc. ( former CFO Logitech International SA) 4/2013 Adam Castleton Shopping.com International Finance Director, Shopping.com French Connection ( former Acting CFO at O2 UK) 5/2013 Glen Ceremony eBay Corporate Controller Travelzoo Inc. 6/2011 Jonathan Chadwick Skype CFO, Skype VMWare Inc. 11/2012 Michael Chao eBay Director, Finance Famous Brands International 8/2013 David Clarke PayPal CFO, Paypal EMEA Lebara Mobile 4/2013 Matthew Gustke StubHub & eBay CFO and Head of Strategy, Stubhub TheRealReal 4/2013 Mary Hentges PayPal CFO of Paypal Yapstone ( previously CFO at CBS Interactive) 9/2012 Douglas Jeffries eBay Vice President of Finance and Chief Accounting Officer at eBay RetailmeNot Inc. ( Previously CFO of Taleo Corp., Palm Inc.) 1/2013 Rob Krolik eBay & Shopping.com Vice President, Global Finance Operations at eBay Marketplaces division Yelp Inc ( Previous CFO of Move Inc., Previous CFO Shopping.com – sold to eBay) 7/2011 Dinesh Lathi eBay Vice president of managed marketplace and seller experience One Kings Lane 10/2011 Caroline Moon eBay Analytics Manager 99designs ( former CFO adBrite Inc.) 1/2012 George Redenbaugh Skype, eBay Skype Group Treasurer and Head of Risk Management Kiva.org 2/2013 Scott Rosenberg GSI Commerce ( now known as eBay Enterprise) CFO of GSI Commerce Purchasing Power 9/2012 Mark Rubash eBay Principal Accounting officer EventBrite ( former CFO HeartFlow Inc., Shutterfly Inc.) 4/2013 Jeff Shotts eBay Sr. Director, Marketplaces Strategy and Business Incubation ModCloth 3/2012 Servaes Tholen eBay CFO of eBay North America Elance 8/2012 Aman Verjee eBay, PayPal CFO, eBay North American Marketplaces Collective Media Inc. ( former CFO Sonos Inc.) 8/2012
The company says it has about 1,000 financial executives around the world and more than a dozen divisional and regional CFOs.
Rookies get both theoretical and practical training in finance, analytics and leadership. And, as part of a two-year program, eBay rotates star performers to a different division every six months to expand their professional networks across the company.
Sitting in on quarterly earnings calls with Wall Street analysts and eBay's executive team, Mr. Aggarwal recalls, helped him learn how to focus on the key points he wants to make to investors, and served him well during Trulia's IPO roadshow.
EBay considers minting CFO as part of its mission. "We recruit people who aspire to be CFOs," says Robert Swan, eBay's finance chief since 2006. "If along the way there are opportunities outside, that's OK.…We have a deep bench." Mr. Swan says he does annual assessments to identify potential candidates, in case of a vacancy, and any skill gaps employees might have. He also stays in touch with executives who have moved on "to understand how well they did and how well we did at preparing them to be top notch at what they do."
Tech-industry CFOs tend to hop from startup to startup. They are among the least likely to harbor ambitions of replacing their chief executive, according to a survey this month by Deloitte & Touche LLP.
Of course, companies also regularly poach finance executives from Amazon.com Inc., and Salesforce.com Inc., especially those who have helped the company expand, says Joe Riggione, co-founder of executive-recruiting firm True Capital Partners Inc.
But eBay's training programs are specifically designed to turn out CFOs. For example, the company's finance employees often gain some dexterity with big data, so they can sift vast amounts of information to uncover trends in sales, shipping or other areas of operations. They also get classroom training from in-house experts on taxes, audits, investor relations and treasury.
Several of the eBay alums dine together a few times a year, often at Flour + Water in San Francisco's Mission District, where favorites include the margherita pizza and pappardelle with braised lamb. Matt Gustke, the new CFO of online luxury reseller RealReal, Inc., who spent a dozen years at eBay and used to have a weekend home in Napa Valley, typically chooses the wine.
"We call it the Chief's Dinner," says Mark Rubash, the finance chief at Eventbrite, which he joined in April after a few years as CFO at Shutterfly Inc., and a long career at eBay.
One of eBay's early auditors at PricewaterhouseCoopers in the 1990s, Mr. Rubash recalls that the company was initially described to him as a neat way to sell old golf clubs. He bought into the idea and switched employers in 2001. At that time eBay had about 800 employees. When he left in 2005, as its principal accounting officer, the company had grown over tenfold, and he had hired many of the future members of the eBay Mafia.
Among the qualities that make the former eBay executives most attractive to fast-growing young companies is their familiarity with e-commerce and Internet advertising, and tested strategies for building marketplace businesses.
Mr. Rubash says he wants to use his background in those areas to build Eventbrite into a major marketplace for concerts and events. "One of the learnings from eBay was that you have to get critical mass first. If you put that front and center, it starts driving all of the strategic decisions," he said.
The eBay gang is a kind of cousin to the PayPal Mafia that formed after eBay's acquisition of the online-payment service in 2002, when dozens of executives moved on but kept in contact, including PayPal co-founders Peter Thiel and Max Levchin. They went on to build or invest in new companies, including Facebook Inc. and the local-review site Yelp. Sometimes the two groups overlap. At Yelp, the CEO is PayPal alum Jeremy Stoppelman and the CFO is eBay alum Mr. Krolik.
About half the eBay Mafia are serial CFOs on their second or third job. Many held internal CFO roles at eBay that gave them broad responsibilities, such as running international acquisitions, and the freedom to decide how to allocate capital among operations with millions of dollars in annual sales. They say they were able to hone their skills so well because finance was crucial to eBay as its business model grew and became more global.
For example, Dinesh Lathi spent years in finance and operations at the company, working to encourage its top sellers to do more business on the site. Now, as chief operating and financial officer at One Kings Lane Inc., a flash-sales site for furniture, he is implementing a similar strategy. At eBay he says he learned you have to be "relentlessly customer-focused."
Experienced CFOs can be as hard to come by as superstar engineers. The bulging number of tech companies preparing to go public has increased the demand for their talents, which has spread beyond Silicon Valley. Brick-and-mortar retailers including French Connection Inc. and Famous Brands International, parent of frozen yogurt chain TCBY, both hired eBay alums as CFOs this year.
"You can usually pluck a finance head out [from eBay], put them in a CFO job and have them make that transition nicely," said recruiter True Capital's Mr. Riggione.
Jeff Shotts, spent more than a decade at eBay, taking turns at running its business-incubation team and managing product development and finance for its French unit. Now, Mr. Shotts, who became CFO of ModCloth last year, is using his analytical skills to manage the company's fast-growing supply chain.
Still, he says some of the most valuable tools he picked up at eBay were on the softer side: learning how to recruit and retain talent, do good performance reviews, and bring different groups of people together.
"There's a foundation you build up as you go through the organization at eBay," he said.
For him, the eBay network also has been a way to learn the ins and outs of developing a startup. His former colleagues "have different models and different situations, but those tips and tricks play pretty well."
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