Craig's List aims to 'stay small'

Craig's List CEO does not seek maximum profit

"No venture capital, do only what users ask for, stay small, be patient," does not sound like a typical pitch from a dot-com CEO.

But Jim Buckmaster, and the 22 other employees at Craig's List, a classified ads site, were far from the typical dot-com start-up.

Their site, the seventh most popular English-language page on the web, is free for most users.

Digital Planet spoke to Mr Buckmaster in London.

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During the boom, at virtually every company it was: raise as much venture capital as people are willing to give you, spend it as quickly as possible to try to reach as large a size as possible, so that you could sell to the public or to an acquirer.

There was this notion of internet time where you had to grab market share, or that it was a land rush of some kind, and first-mover advantage.

All those things, we absolutely ignored to the point where we were in some ways ridiculed a little bit.

'I mean, these Craig's list guys really seem to be out to lunch, what are they even doing here? They're so out of step with what everyone else is doing.'

But the bust had a humbling effect on that other way of doing things.

The thousand or so dot-coms that were founded exclusively for the purpose of making as much money as possible, virtually all of those went out of business without making a nickel.

Whereas Craig's list, which never had money as a primary object, has been in the black since sometime in '99.

Top-ten

In the English-language world Craig's List is number seven for page views currently.

One of the interesting things is that out of the other top-ten in that list they all have 10,000 or more employees, whereas we have 23 employees.

As it turns out if you're not in the business of maximizing profit, there's all kinds of functions that you no longer need like sales, marketing, business development, etc.

All we have is technical people and customer service people.

Our headquarters has been described as a dilapidated Victorian house, which is a fair description, but it's quite comfortable and cosy for us. Jim Buckmaster CEO, Craig's List

The amount of revenue we make is absolutely insignificant compared to the money taken in by the other large sites, but it's certainly significant for a small company of 23 employees.

We've kept our costs low using free software and keeping a very simple operation, such that a relatively small income stream is plenty for us.

I should say all of us at Craig's list make very healthy livings, we have about everything that we want in our lives.

It's just not attractive to trade away a service that means a lot to us in exchange for putting some extra zeros on our bank account that likely we would never have an actual use for.

User feedback

We built our entire business model on requests, or responding to user feedback.

Initially it was mostly coming in via email which we would reply to, but we've grown so much that now the more common thing is you set up a series of discussion forums in which users bring up various things that they think are important to change or modify in some way.

Users talk amongst themselves about things we're doing poorly or could be doing better, and then we're able to observe that interaction. It proves to be a very kind of efficient and interesting and useful way, nowadays, of digesting that feedback.

The other important aspect that you might not imagine initially is that all of the feedback is coming in as 'voting with their feet'. We just watch how people are using particular categories.

If we see that, 'oh users want to do this and we're not currently enabling this', then we try to code up some changes to better enable them to do whatever that is.

Newspapers

The internet at large and Craig's list in particular, poses some challenges for the way newspapers have operated over the last several decades.

In reality newspapers, at least in the US, are still twice as profitable as the average industry and are hitting all time highs in revenues and profitability.

The problem lies in Wall Street. They expect a publicly traded chain of newspapers to continually increase that profitability. And that has become more difficult in recent months and years, not exclusively due to Craig's list of course.

So, you know, I think it's overblown that newspapers are reaching an early demise, but I'm sure there are challenges.

An online community?

You could say that it's just online classifieds, but at certain moments it does feel like a community.

For instance in the wake of the Katrina hurricane, all of the things that people did to try to reach out to the victims.

We had a New Orleans site, and the structure of a general purpose classified site lends itself to the things people needed. Initially there were thousands of missing-persons type ads, following that offers of free, temporary housing started to flow in from the local area, and basically all around the US.

Then literally thousands of job offers directed toward people displaced by Katrina.

And just about anything else you can imagine, whether missing pets or ride-shares in and out of the area.