{"id":282,"date":"2007-05-05T11:22:00","date_gmt":"2007-05-05T18:22:00","guid":{"rendered":"http:\/\/paulgillin.com\/2007\/05\/nantucket-conference-day-two-craigslists-curious-success-formula.html"},"modified":"2007-05-05T11:22:00","modified_gmt":"2007-05-05T18:22:00","slug":"nantucket-conference-day-two-craigslists-curious-success-formula","status":"publish","type":"post","link":"https:\/\/gillin.com\/blog\/2007\/05\/nantucket-conference-day-two-craigslists-curious-success-formula\/","title":{"rendered":"Nantucket Conference Day Two: Craigslist's curious success formula"},"content":{"rendered":"

\"\"<\/a>Craigslist.org<\/a> CEO Jim Buckmaster was interviewed this morning on stage. Craigslist drives a lot of Internet and media companies crazy because it cares to little about profits. Its free classified ads undercut newspapers\u2019 most profitable business and its remarkable growth (it\u2019s one of the top 10 most trafficked sites on the Web with a staff of just 24 people) shows no signs of slowing.<\/p>\n

Craigslist is a true social media disruptor. It has leveraged user interactivity and self-publishing to create a service that people love. In staying focused on user needs, it has pummeled its newspaper competitors who have historically offered expensive and slow services. Craigslist\u2019s refusal to live by the almighty buck also makes a stirring example of how a service that keeps its eye on the ball \u2013 its users \u2013 and experience spectacular success.<\/p>\n

The following is a more-or-less verbatim transcript of what Buckmaster said.<\/p>\n

On why Craigslist doesn’t have advertising
<\/b>“We\u2019ve been told by sales people that we could bring in many millions of dollars by adding text ads but our users aren\u2019t asking us for text ads so we don\u2019t have them. Paid search can create a conflict of interest with site search. The better your site search is, the less need there is for paid search.”<\/p>\n

On building community
<\/b>“Something we learned early on is the more we can get out of the way and let users do things for themselves, it sounds lazy but laziness is part of it. The less you have to depend on someone in an office, users are better positioned than staff to serve themselves and help each other. The other thing is following up on feedback. The site has been hammered into shape by millions of requests over 12 years. Everything you see there today is the result of user feedback.”<\/p>\n

On the site’s trademark boring text interface
<\/b>“You might look to a boring interface as a reassuring thing to cling to as you\u2019re looking at some of the outlandish things you see out there. We\u2019re open in letting people use HTML in their postings, almost to a fault. People aren\u2019t looking for the interface to be exciting. They\u2019re looking to it to be fast, reliable and easy to use.” <\/p>\n

On preventing inappropriate material from appearing on the site<\/b>
“We\u2019re approaching 20 million new classifieds per month. The answer (to inappropriate material) has been to let users flag something that\u2019s inappropriate. If enough users flag it, it comes down automatically. Inappropriate ads usually come down within a few minutes. It\u2019s not perfect, but it\u2019s far more effective than a centralized staff could do.”<\/p>\n

On a recent lawsuit over classified ad content
<\/b>“A group of attorneys in Chicago filed a suit, tried to take us to task over a small number of postings they thought ran afoul of fair housing laws. Mostly they wouldn\u2019t strike you as inappropriate. For example, the mention of a church in an ad was said to be discriminatory to people of a particular faith. That suit was dismissed. The group was attacking the law that exonerates service providers from being responsible for the content of their sites. If there wasn\u2019t that law, a lot of sites like MySpace couldn\u2019t function.”<\/p>\n

On why the company isn’t more focused on making money<\/b>
“This is where the descriptions like ‘communist’ and ‘anarchist’ come in. It seems to make no sense to let a site be as useful as possible and pay no attention to the monetary side. But it hasn\u2019t been tempting. We enjoy working at Craigslist. Users like it and we\u2019re not sure what we would do with a big surplus of cash. We\u2019d probably look at ways to give it away.<\/p>\n

\n

<\/b><\/span> “We give away at least 1% of revenue, but we haven\u2019t had a chorus of users suggesting that we should run ads to generate funds for charity. People have that money now and they can give it away. We\u2019re not in a position to be an arbiter of where that money should go.”<\/p>\n

\n

On keeping the business simple
<\/b>“We\u2019re in the top 10 companies in traffic with a staff of 24, whereas the other companies on that list have staffs of more than 1,000. Early in the Internet boom, you tried to raise a lot of VC money and invest in esoteric hardware and expensive software. That never appealed to us. We invested in open source software from the beginning. We don\u2019t have sales and marketing. We mainly have engineers. We don\u2019t have meetings. We\u2019re not trying to maximize revenue. When you\u2019re not trying to maximize revenue, it\u2019s surprising how little staff you need.” <\/p>\n

\n

On EBay’s 25% ownership stake
<\/b>“That ownership is from an early shareholder who decided to sell his stake. EBay has been helpful to us in a few areas, like consumer protection. But on a day-to-day basis, there hasn\u2019t been a lot of interaction.”<\/p>\n

\n

At this point, audience questions begin<\/i><\/b><\/p>\n

\n

Q: How about cranking it up a little bit? If you went from 24 employees to 50 you could provide better services.
A: <\/b>We are planning to hire more tech staff and customer service staff. But we\u2019re not constrained by capital now, so it\u2019s not necessary for us to look for ways to make more money in order to hire people. We\u2019re not looking to become a mid-sized company. We\u2019re happy being a small company.<\/p>\n

\n

Q: Do you intend to do anything internationally?
A: <\/b>We have sites in 50 countries. They\u2019re in English now but we\u2019re laying the groundwork for multi-language support. For a small company to be prepared to offer support in languages you don\u2019t understand is a big job. We\u2019ve taken the approach we\u2019ve always taken, which is to listen to user requests and when there are enough user requests, you do what they ask.<\/p>\n

\n

Q: How do you deal with regulators\u2019 requests for information?
A: <\/b>We\u2019re interfacing with regulators on a weekly basis. It runs the gamut from the Secret Service to local law enforcement to the FBI. We try to keep things small and simple internally and we have good external council. Hiring lawyers would be a, and while I\u2019d like to have that, we also want to maintain a small company that people like to work at.<\/p>\n

\n

Q: What can companies like ours (entrepreneurial firms) learn from you?
A: <\/b>We don\u2019t have meetings. People can work from wherever they are whenever they want. The tech model is built on alpha geek principle. We\u2019re fortunate to have some fairly brilliant technical people. The one aspect of Craigslist that\u2019s behind the scenes is how we manage to run a rapidly growing site with page load times that are among the fastest of any company. Open source is a big part of it.<\/p>\n

\n

Q: Who is Craig and what\u2019s his role today?
A: <\/b>He splits his time between being a hands-on customer service rep and a variety of media-related roles. In the Bay Area, he\u2019s become a kind of celebrity. He was on a game show, for instance.<\/p>\n

\n

Q: Have you ever had to fire anybody?
A: <\/b>It\u2019s been more than five years. We had
\na rough patch where we had to do layoffs on our small scale. At the height of the bubble, more than 90% of our revenue was coming from dot-com job listings. Those declined by about 95%. By post-9\/11, virtually all of the business we had had at the height of the boom was gone. We ended up letting some folks go who seemed to be contributing the least to our performance. That\u2019s the last time that occurred.<\/p>\n

\n

Q: Have you ever thought of acquisitions like Angieslist?
A: <\/b>You see so many mergers and acquisitions go awry and you rarely see a case where companies are better off after a merger. Plus you spend so much time looking at legal documents, and that\u2019s one of the things I enjoy least about the job.<\/p>\n

\n

Q: What are principles of someone who would make a worthy partner?
A: <\/b>Probably someone who\u2019d be 100% focused on creating goodness for the end user without being clouded by sharp business interests that would cloud that. The dynamics of the Internet industry are so powerful that companies increasingly have the luxury of choosing a business model where they don\u2019t come in to an adverse position with their customers. That\u2019s been difficult in the past but you can do it now.<\/p>\n

\n

Q: Are you worried about competition, especially internationally?
A: <\/b>We don\u2019t even look at what other companies are doing. We\u2019re not setting out to conquer the world of achieve any particular market share. We\u2019re just following up on what our users want us to do. We\u2019ve got plenty of things to occupy our thoughts about how to do better by our users. That crowds our thoughts of fighting competition. <\/p>\n

\n

Internationally, there are a lot of companies that have copied our model years before we got there. As long as they\u2019re providing the good things that Craigslist tries to provide, we don\u2019t have a problem with that. We try to be there in a the background as an insurance policy in case they try to turn the screws on their customers. We\u2019ll be there if necessary.<\/p>\n

\n

Q: If you rolled back the clock to 1999 or 2000, what have you learned?
A: <\/b>Our lives have gotten more complicated as the site has gotten bigger. Regulatory scrutiny is something we never had to consider in the past. The fact that it\u2019s such a large marketplace invariably draws \u201cbad guys\u201d like spammers and wire transfer con games. It\u2019s very hard to keep those people at bay. Both spam and scams are easy to avoid if you use the site as it was intended. <\/p>\n

\n

Q: What\u2019s on your agenda for this year?
A: <\/b>Internationalization is a large project. Also a less clunky geographical dimension to searching and browsing. Each site is an island under its own. Take Massachusetts: we\u2019ve got a separate site for Boston, a separate one for Cape Cod, a separate one for Worcester. It\u2019d be nice if there were a little more flexibility in the geographic vector. And combating spam and scams is an arms race we\u2019ll always be stuck with. The spammers are resourceful people, they\u2019re technically quite competent, they\u2019re making their living exploiting the big sites. Those are the big areas.<\/p>\n

\n

Q: If you were running a newspaper, what would you do? They don\u2019t like you so much.
A: <\/b>To me, a newspaper\u2019s role is to get high-quality, accurate information in front of readers. Long before I got to Craigslist, I felt that the big newspaper chains had gotten away from that by taking on debt and focusing on how to increase their profit margins. If it was me, I\u2019d try to get back to the principles of how do I serve the role of the Fourth Estate well and keep from falling into this ridiculous war that we\u2019re in. I was very disappointed with how newspapers dropped the ball in avoiding our getting into this war. I love newspapers and I read lots of them, but once you get away from what you\u2019re about, it becomes difficult. You can\u2019t serve Wall Street while you\u2019re also trying to assist the public. If I were to choose, I\u2019d try to serve the public and let the money side take care of itself. <\/p>\n

\n

Q: What are your guiding principles?
A: <\/b>We have a strong sense of laissez-faire: To each their own between consenting adults as long as you\u2019re being legal and not taking advantage of people. And the philosophy of letting people use the site as they want. You have to comply with legalities, but beyond that, in our minds the moral side is largely subjective and users have a much richer sense of morality than we do and they\u2019re empowered to make decisions about what should be on the site and what shouldn\u2019t.<\/p>\n

\n

Q: If your users decided they liked another site better and trickled away, would that be okay?
A: <\/b>If were so inept that we couldn\u2019t provide a value proposition that users found important, yeah, I\u2019d probably encourage them to go away.<\/p>\n","protected":false},"excerpt":{"rendered":"

Craigslist.org CEO Jim Buckmaster was interviewed this morning on stage. Craigslist drives a lot of Internet and media companies crazy because it cares to little about profits. Its free classified ads undercut newspapers\u2019 most profitable business and its remarkable growth … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":""},"categories":[29],"tags":[67],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pTy95-4y","_links":{"self":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts\/282"}],"collection":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/comments?post=282"}],"version-history":[{"count":0,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/posts\/282\/revisions"}],"wp:attachment":[{"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/media?parent=282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/categories?post=282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gillin.com\/blog\/wp-json\/wp\/v2\/tags?post=282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}