Craig Newmark is a fascinating soul. He’s either a real, genuine gentleman or the world’s greatest fraud. Clearly, I’m biased into thinking that he’s in the former - and not latter - camp. Craig Newmark has built Craigslist.org into the most powerful thorn in the newspapers’ industry side, the strongest classifieds business and a profitable machine, without even trying to.
Well, not so fast, while Newmark confides in his latest interview that he built CL’s with no vision, the truth is that Craigslist.org’s success comes as a result of a few major decisions, or no-decisions.
[check out our video profile on Craigslist.org, by the way, here.]
1. Like Yahoo! before it, Craigslist.org really started off as something useful, that then benefited from the explosive growth of the Web to become a business. Yahoo! was a directory created by Stanford Ph.D. students Jerry Yang and David Filo, named initially Jerry’s Guide to the Web, then remaned Yahoo!, an acronym for Yet Another Hierarchical Officious Oracle.
2. Unlike 99% of SF-based projects/business ideas, Craigslist never rose a penny in financing, and if it did, it was not from investors with a short time horizon and a pre-determined ROI target. Craig was essentially free to manage as he saw fit, with no one to answer but himself.
3. Keep it Simple, Stupid: Craig never added too many bells and whistles, he did not launch emails, did not offer maps. He kept his focus razor sharp on classifieds but expanded peripherally into new cities, new categories etc.
4. Principle of Specialization: Craig is a self-described “customer service rep,” knowing that he’s no Jack Welch, he lured a professional to run his company, that being Jim Buckmaster.
5. He’s human: he gave 25% to an employee, who then sold it to eBay, but eBay - unlike other VCs, investors and companies - accepted in the deal because others wanted some kind of control, liquidity preferences etc. In his own words: eBay shared a moral compass, and that mattered to him. But that 25% stake could have hurt him had the buyer and seller been more scrupulous.
6. He’s unapologetic: While the newspaper industry considers Craig Newmark to be their Pol Pot, Newmark is keen to defend himself and point out the fact that the newspaper industry still generates billions in profits.
7. He’s coy: maybe not in a cunning way, but while Craigslist is listed as a .org, CL is a profit machine, generating upwards of $25M with margins that would make any VC envious.
8. He’s not greedy: while he could run ads and make hundreds of millions in profits, he doesn’t.
9. He listens to his clients: When asked why he won’t run Google Ads, he and Jim answer: “our clients never asked for it.”
10. He runs a business: CL has never gotten ahead of itself. The company has about 20 employees and runs out of a victorian house. There’s no opulance, no waste.
What other lessons come to mind?
Donna Bogatin, formerly of ZDNet fame, adds some thoughts on her new blog.
Related:
:: How much Could Craigslist be Worth?
:: 13 Most Explosive Web Startups
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June 6th, 2007 at 9:20 pm
[…] Craig Newmark is no visionary. He’s no guru. And he’s no soothsayer. He’s a guy who lucked into his business, and it continues to […]