AuctionBytes is running a series of interviews with people who have had an impact in the online-auction industry in order to get their views on the current state of the auction world. In today's Industry Profile, we interview Scott Samuel, who founded Honesty.com. In 2000, Scott sold Honesty to Andale, where his auction counters are still offered for free. Scott more recently launched AuctionEthics.com, an online discussion board, and is founder of a new company, Ethical Technologies. He shares his vision and gives us a peek into his own plans for the future.

AuctionBytes: Tell us a little bit about yourself. What did you do before you became involved in the online auction industry?

Scott Samuel: Hoo boy! :) Well, Let's see... I'm 37, and have been a member of the online community since roughly 1980, having run some of the earliest BBS systems in the nation back in the days of 300 baud modems. Right after that, I started my first for-profit Internet business, a real-time chat system in 1983, one of the world's first.

Now here's the kicker. I didn't plan it that way. I just happened to enjoy talking with people via my PC, yet I also recognized, as it was happening, that I was watching a medium unfold before me.

During that time, I went to North Central College in Naperville, Ill. graduating in '90 with a BA in History, with an emphasis on English, communications and psychology. By trade, I was a high school teacher. However, while in school, I'd started a national sports memorabilia company, and for a decade was the President of "Dr. Defunct," which I sold in 1994.

Overall, I consider myself a "full-time professional modem user," since really, the Internet and the people that use it, are truly the love of my life.

AuctionBytes: When did you discover online auctions and how did you become involved in them?

Scott Samuel: In mid-1996. At least that's when I first noticed something significant was happening on, what was back then, the AuctionWeb site. By late that year, I found myself spending a majority of time either buying, selling or helping someone out, especially a new user with a question. What initially blew my mind was how engaging it was, not only on a fiduciary level, but even more so from a community perspective. You could feel it. In early '97, I registered and it wasn't long after that, in many ways, it became a daily ritual.

Wake up, sit down, say hello, check one's auctions, go look at what else was for sale. That was seven years ago, and really, it's been a pretty wild ride ever since then.

AuctionBytes: Can you tell us a little bit why you started Honesty.com and how that came into existence?

Scott Samuel: Well, actually, it began out as a basic tool which I gave away to a handful of friends on eBay's Q&A board. By the end of '98, around 20,000 people were using Honesty counters daily. Around that time I started to look at it seriously as a business, especially after a set of discussions with G. Patton Hughes.

Three months later there were roughly 100,000 folks, and by June of '99, Honesty was ranked as high as #22 by Media Metrix. When we saw that statistic, we licensed the USA Today article text for $250, scanned it, and then posted it on the Honesty home page, thanking all of our users.

Really, that's who built it. The customers. That's something we never forgot.

AuctionBytes: What gave you the idea for Honesty auction counters?

Scott Samuel: Right from the start, when I was on eBay's Q&A board, I wanted to know how many people were looking at my early auctions, so I mentioned it and had a shareware version made for myself. From there, a few folks on the forum asked if they could use them, and I said sure. I also said there would never be a cost for them, and we never did charge for the counters.

Nowadays, I also look at the Andale counter as a bidder tool. If one watches a counter near the end of an auction, by watching the count increment, a person can determine if there are other bidders looking to snipe a given item on eBay.

Well, it's not perfect, but as long as the other bidder isn't using an automated "snipe" program or service, it is fairly accurate in detecting other snipers.

I don't think many people knew that facet of counters until just now. (smile)

AuctionBytes: What are some of the most memorable experiences in this industry?

Scott Samuel: Ouch! Tough question... there are a ton of them.

Naturally, things such as signing our initial counter deal, making Honesty one of the very first third-party services to work with eBay. That was a pivotal event.

And then there are the "internal" situations, such as July 4th '99. That evening, we designed the original Honesty One-Step lister software on the driveway of my home, while melting iceblocks with road flares since we couldn't afford fireworks. Another one that sticks is the time John Berry, our EVP of special products drove 200 miles on Christmas day to help answer the customer support mail when it fell behind.

But truly, corny as it may sound, I'd have to say the most memorable experiences would be the various close and personal friends I've made over the years.

Thanks to eBay and Honesty, and since then, both OTWA and Auction Ethics, I've been fortunate to become very close with a significant number of people who comprise the online auction industry.

AuctionBytes: How has the online-auction industry changed since you first became involved?

Scott Samuel: It's harder to start out as a seller, today. That's always the first thing that comes to my mind. A lot of the various aspects of the auction process, even registration on eBay, is much more difficult than it was, heck, for that matter even two years ago.

Sure, with the increase in size of our industry, and the upgrades on various technology, a learning curve is to be expected. Yet there are times that I long for the days when I could mention eBay or auctions to someone walking down the street, and when they got home, they'd be using the website.

Now, a person has to take a block of time to actually learn how to use the software, even before they can familiarize themselves with the online auction process and the nuances of buying and selling online.

Also, I've seen a wholesale change in the customer service mentality. That is, how entities and individuals approach and communicate with their customers. Today, it seems that a majority of the communication gets sacrificed. Not always, mind you. Yet, it does happen from time-to-time. Nowadays, on occasion, I'll spend a few hundred dollars, and hear nothing from the seller until after the product has arrived. Or, when dealing with a corporate entity, I'll get an obviously canned answer, or none at all.

Back at Honesty, we answered every customer support mail personally, usually within minutes.

Even as the CEO, I'd answer customer mail. I think it kept me in touch more than any single facet. Also, it really went over big with the customers who used our services, because they knew we truly cared. They could always reach us.

And, when a customer came to us, they'd knew that we'd give them a straight answer and solve their problem.

AuctionBytes: Do you feel that online merchants are in a better position now than 4 or 5 years ago?

Scott Samuel: Actually, yes, because there are many more choices, and not just in a venue capacity.

EBay, too, is much stronger as a corporate entity. And whereas one can see that as a detriment (since it's infinitely harder for a large entity to communicate) the fact that it is so incredibly successful, I feel, works to everyone's benefit.

Back in '97 or '98, when I'd explain to someone that I was selling on eBay, or that I was the CEO of a company that creates tools and services for e-commerce businesspeople, I'd get a lot of funny stares.

I still get the stares, but more often than not, people understand what it is that engulfs all of my time and energy.

Naturally, there are new pitfalls that didn't exist five years ago, such as the communication aspect I mentioned above. But as a whole, I think the people that make up industry are much better positioned today. Online auctions, effectively thanks to eBay, are no longer viewed as a "fringe" or "cottage" industry in the perception of the mainstream public.

At the end of the day, that's a very critical factor.

AuctionBytes: Where do you see the industry headed?

Scott Samuel: Over a twenty year period, I think we're headed to full-scale e-commerce as a part of daily life.

Granted, that won't happen tomorrow. But when one realizes that roughly 70% of households in the US alone aren't wired as of yet, well, it shows the untapped potential.

I also a see a time-management push from buyers, sellers and the various entities in the space. Volume alone dictates this factor. So, streamlining and "efficiency of the sale process," will, I believe, become central issues once again in the near future.

Short term, I think we'll see a shift to more of a fixed price format in terms of day-to-day ecommerce. It's easier to standardize and manage when it comes to traditional merchandise, especially on a technical level.

However, that has an impact on those selling non-traditional goods, such as collectibles, which many folks still see as the core strength to 'Net commerce. In many ways, they're absolutely right, too.

The ability to find any given item or service online, especially one that can't be found at any store, well, that's really is an integral part of shopping online and often what draws someone to make their first online purchase.

AuctionBytes: What are some of the biggest challenges facing online-auction sellers in the next 5 years?

Scott Samuel: Really, more than anything, I think the learning curve needs to be reduced when it comes to transacting in general. That's not something an individual can often change on their own, either.

Not a week goes by that I don't speak with someone who really doesn't want to be involved in e-commerce simply because of the complexity, or perception of online commerce being difficult and cumbersome. I think, if anything, this lends credence to the idea of drop-off centers, and again, back to time management.

I also think individuals and entities need to reaffirm a push towards communication on an online level.

One cannot sell effectively to someone they never encounter.

Be it via email, or for that matter, an auction listing, the initial impression one sets is often a buyer's only contact. It should be their first. And, if that website or listing is going to be the only customer contact point, then it had better be effective and clear.

If any single part of the communication process breaks down, a transaction runs a greater risk of not being completed successfully, which in turn costs both time and money.

AuctionBytes: Can you tell us about your current Web site, AuctionEthics?

Scott Samuel: AE, simply put, is different than most of the other message/forum sites in the online auction industry.

Basically, the idea came to me close a year prior to its release, but as a press pin (my personal hobby) collectors forum. From there, I started to fiddle with Infopop software, and along the way, I showed a few folks screenshots via email. In July of last year, after talking with Mike Rudi, we decided to launch it as Auction Ethics without any real fanfare.

It was initially a lark, but the forums did catch on and currently, it ranks in the top 100,000 sites on the web. The most interesting thing about Auction Ethics is that, even without any set of guidelines, people are generally kind to one another and don't often argue.

The URL is http://www.auctionethics.com, and I'd consider it a good entry community for anyone, simply because it's more passive than most message bases.

AuctionBytes: Are you working on any projects for the future?

Scott Samuel: There probably isn't a day that has passed in the last few years that I've not been asked that question. (smile)

And now, actually, the answer is yes.

Since February of this year, myself and a number of folks from the original Honesty team, as well as some new additions, have been in the process of developing a full suite of Second Generation auction service tools.

As it stands now, Ethical Technologies, or Ethical as we call it, plans to have a series of services fully functional before the end of year. And yes, we'll be using the same ideology we pioneered at Honesty, that being straight talk and a customer driven company focus.

And naturally, we'll keep AuctionBytes informed as we move forward.