Craigslist CEO: Profits!? We don’t need no stinkin’ profits!
David Johnson December 18th, 2006
So OK, I’m putting words in Jim Buckmaster’s mouth, but it is better than Forbes’ headline: Newspaper Killer. The lords of finance may scratch their heads over the business plan at the Web’s open source classified superpower, but craigslist users haven’t asked the company to start capitalizing on their massive unique user count (47th overall) and stunning page views (7th overall, 3.35 billion in October). So what do Craig and Jim and their two dozen other staffers do? They ask their users what they want, and then they give it to them. Asks UBS analyst Ben Schachter, “Is maximizing profit not part of the equation?” “That’s definitely not part of the equation,” Buckmaster answers. “That’s never been a goal … We have been fortunate to do well by doing good, whatever phrase you want to use, by focusing only on improving the service for users.” Forbes says “the business plan, by any rational standard, is completely insane.”
11 Comments Add your own
1. Rex | December 18th, 2006 at 1:29 pm
Ya know, I don’t usually get all commie like this, but fuck Forbes. Dude makes millions and some fuckwad calls him “insane” for not trying to stretch it to billions.
And it completely ignored the counter-argument: that Craigslist is successful purely because it isn’t trying to drain its users for ad dollars.
2. discreet_chaos | December 18th, 2006 at 1:53 pm
Hey - It worked for Google and YouTube, so though I really don’t understand it, it’s not a completely untried concept. It’s just that someday, they’re going to have to let go of their baby and somebody else will need to capitalize on it.
3. Rex | December 18th, 2006 at 3:33 pm
Why? What?
4. Joe | December 18th, 2006 at 4:30 pm
The way to beat Craigslist is to create a better Craigslist, and it shouldn’t be hard. Craigslist’s search feature is horrendous. You don’t search for a house the same way you search for a date, and you don’t search for a date the same way you search for a job, and you don’t search for a job the same way you search for a lamp. Yet Craigslist gives you the same feeble search field regardless. Want a house with at least three bedrooms? All you need to do is run forty separate searches:
three bedroom
three bedrooms
3 bedroom
3 bedrooms
three bed
three beds
3 bed
3 beds
3 bd
3bd
four bedroom
four bedrooms
4 bedroom
4 bedrooms
four bed
four beds
4 bed
4 beds
4 bd
4bd
five bedroom
five bedrooms
5 bedroom
5 bedrooms
five bed
five beds
5 bed
5 beds
5 bd
5bd
six bedroom
six bedrooms
6 bedroom
6 bedrooms
six bed
six beds
6 bed
6 beds
6 bd
6bd
That’s pathetic, Newmark.
5. Safran | December 18th, 2006 at 6:27 pm
Ya know, I agree that Craig’s search is lousy. Everything is still posted by most recent date. It should be easy for them to do better. And I imagine they will.
This is a very funny argument. Can anyone else think of precedent for someone bringing down massive competition by *refusing* to compete with them? Rex is right on - part of what makes the site successful is its stick-to-the-DIY model.
More proof that you need to know what business you’re in. Newspapers thought they were in the newspaper business. Turns out they’re in the information business like the rest of us. There is no reason why any newspaper (or TV station, or radio station or other website for that matter) couldn’t start their own local Craigslist-style site - even a better one. They just don’t want to “give it away.”
Compare any given free car ad on Craigslist to a *paid* ad in the paper. On Craigslist, you’ll get a full page of descriptions and a couple of color pictures. Free. For $40, the newspaper will give you this (From an actual paper, today): ‘91 Chevrolet S-10 Blazer, 4dr, V6, auto, cold a/c, extra clean, dependable, $2600 obo.
Lesson: Quality and quantity of information trumps site design.
Note to Forbes: There is no “newspaper killer.” It was an assisted suicide.
6. David Johnson | December 18th, 2006 at 6:28 pm
ya know, it occurs to me that with the whole open source thing at the heart of craigslist, rather than try to beat craig, why aren’t people trying to build hooks into and mash up with him? now, i haven’t looked for any apis or legal agreements or even searched this, but just thinking/typing aloud here, why wouldn’t you build a script that sends all those searches to craigslist, make a nice, friendly interface and pull his listings into your nice, friendly templates. i’ve often thought that it is crazy for newspapers to try to beat craigslist, and instead they should simply offer to post their clients’ classifieds in craigs for them. is anyone out there trying stuff like this? (and craig, if you’re lurking, love to hear your thoughts)
7. Erik | December 18th, 2006 at 7:42 pm
I find it humorous that so many big business people are baffled by Craigslist. It’s really just a very small business that has particularly broad reach. Newmark started Craigslist to scratch an itch, and he rapidly discovered that it was taking care of that itch for a lot of other people too. The media titans are so entrenched in bureaucracy think that they can’t even conceive of a business being operated on any basis other than profit maximization. When they say “community” it always comes out sounding like “strip mall.” When a community is actually grown organically, according to the dictates of participant needs, it obtains a stamp of authenticity that can’t be bought for any amount of money.
Attempts to jump on the Craigslist bandwagon and overwhelm it with massive budgets and legions of astroturf-laying marketers are bound to fail. Safran nailed it: The newspaper folks need to figure out what business they’re really in, then execute. Give people what they want, rather than sticking to a dead business model. Pining for the good old days won’t help.
8. Safran | December 18th, 2006 at 7:56 pm
>> When they say “community” it always comes out sounding like “strip mall.”
OUTSTANDING quote. I intend to steal it. Oh, wait - you’re a law student…
9. Tim | December 18th, 2006 at 8:42 pm
Give the customers what they want has always been an _excellent_ business plan! I’m sure they’re profiting from it too. It’s just that the current Wall Street idea for “successful business plan” is: “make the stock price rise so we can ride the rocket and jump off just before it explodes!”. Of course it seems insane to people who make their living by speculating on stocks, because people who care about customers and decent profit don’t make speculators rich. On the other hand, if Craigslist were offered publicly I’d bet Warren Buffet would invest, because he invests in companies that do their thing well.
10. lucy | January 19th, 2008 at 5:01 am
Wow, thanks for the excellent information!
11. AriesInDallas | March 6th, 2008 at 2:21 am
When I moved to Dallas I started an Escort Agency. Hell, I was anything but a pimp, My previous job being a horseshoer. That said, CL made it emensly easy to run ads for erotic providers with minimum interference in the beginniong. Now they decided they hate us, and require a legit phone number to verify person with account before allowing the ad to post. Looking like the free gravy train for escorts has slowed down, but someone will build another and things will keep right on a trucking like they have since the dawn of time. Thanks for reading, Aries.
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