Tweet

Creating the World’s Most Popular List: Craigslist is Born

Article Overview: “We don’t have much in the way of a business strategy,” says Newmark. “Like no business plan. Which I say to torment all my friends who are VCs or MBAs. That’s always entertaining. The deal is, it’s a mixture of luck and persistence.”

Creating the World’s Most Popular List: Craigslist is Born

"We don't have much in the way of a business strategy," says Newmark. "Like no business plan. Which I say to torment all my friends who are VCs or MBAs. That's always entertaining. The deal is, it's a mixture of luck and persistence." When Newmark's simple email listings reached over 240 subscribers, he could no longer carry on as he was; even his cc field would not accept anymore email addresses. Instead of shutting down, Newmark decided to move his list to a public server for all to access. He wanted to call his new website "SF-Events" but some of his closer friends suggested calling it "Craigslist" to emphasize the personal and down-to-earth nature of the list.

In its first few years, Newmark ran the site as a part-time hobby, continuing his consulting work full-time during the day. He tried to bring on some volunteers, but they did not pan out as Newmark expected. That is when he had an epiphany. "I saw that we needed to get serious and run it as an actual company," says Newmark. After all, until that point, Craigslist consisted solely of one single 128 MB hard drive computer in Newmark's living room.

It was Newmark's decision to hire Jim Buckmaster as CEO that signaled a new era for the young company. "In 1999, Craigslist was running on a PC," recalls Buckmaster. "I took it to a multi-server environment. I took it to a number of other cities."

In addition to expanding the site, Buckmaster worked with Newmark to change the way the site was run. Up until that point, there was no search engine on the site, no discussion boards, and every user-submitted post was reviewed and uploaded manually. Together, the two moved Craigslist towards the direction of self-service. Users could post material directly online, and a new flagging system would be introduced in order to let users moderate and police their own community.

As a consequence of hiring Buckmaster, Newmark says, "I now own less than 50 percent. It was a good investment."

Following those changes, Craigslist started to boom. Despite its sole source of revenue coming in the form of paid employment ads in three cities ($75 per ad in San Francisco, and $25 per ad in New York and Los Angeles), Craigslist was earning over $10 million in revenues by 2004. Then, in 2005, for a price tag of $15 million, eBay purchased a 25% stake in the company from a former shareholder. "Although I never figured that part of Craigslist might be owned by a public company, Meg Whitman and Pierre Omidyar (eBay) showed that they were interested in us for all the right reasons," says Newmark.

Still, despite the tremendous success of Craigslist, the company and its founder remain humble. It has fewer than 20 employees, and Newmark says he plans on keeping it that way. "Our philosophy is that we're basically making enough money to pay the bills, with a little left."

After all, for Newmark, the company serves a higher purpose than profit. Through Craigslist, he says he has met people naïve enough to believe that using the Internet, they could together save the world. "I share that naïveté," he says.

Related Articles
  Lesson #1: “There’s no genius behind it. It’s persistence and listening to people.”
  Yes, Craigslist is Pretty Amazing, But You Might Not Know the Whole Story
  Craigslist Marketing
  Beyond Excellence: The "Berserk Standard"
  An Easy Way to Make Money With CraigsList

Article Tags: business plan, business strategy, cc field, craigslist, discussion boards, drive computer, email addresses, email listings, first few years, flagging system, jim buckmaster, new era, newmark, persistence, public server, self service, server environment, service users, sf events, time hobby



Related Forum Posts
Re: New Famous Entrepreneur - Craig Newmark - Craigslist has got both positive and negative feedbacks although I admit I've used Craigslist as also one of my good references for finding listings, jobs, etc that'll benefit my business. Well, Craig has done a great job setting up this website and it was the people around who makes the bad impressions. I hope that won't hurt the whole Craigslist reputation though.
Re: Craigslist/Kijiji Sales - From my understanding, Craigslist is known as more of a place to buy/sell and find deals on products, rather than services. Personally, I would never buy a service from a seller on Craigslist (eg. a tutor, tennis instructor, etc) because there's nothing to measure credibility.
Re: Using Craigslist SEO to Promote Your Website - Hi Trent, I did do some of my own research and a lot of what I found was quite similar to what you said. They do have the no follow on links and flagging has become a problem. Since you've written a book on the subject, have you found an alternative to Craigslist in terms of using it as a tool for promotion? I know Craigslist is hard to top with its SEO-friendliness and traffic, but as entrepreneurs when a door closes we must open another!
Craigslist/Kijiji Sales - Would like to know who on this forum is having any success with generating business through Craigslist or Kijiji by posting ads there? What kind of business do you run and what do your ads state? I've been using the sites to generate leads for Foreclosure properties and I've been having some success. One of my Business Coaching client is a software developer and he's been having a lot of success with Craigslist - almost $7000/month. what's your view on it ?
I think Craigslist is better than Ebay - As a relative novice to selling online, I found that Craigslist is a very effective tool. In less than a month, I've sold over $800 worth of my excess tennis gear (which I was planning on getting rid of) and I haven't really lost much from my original purchase price. The postings on Craigslist are very search engine friendly on Google and I feel it's an easier site to use than Ebay (as a seller). Unlike Ebay there's no seller/posting fees on Craigslist and you're not even limited to selling to "local" consumers. I've had international buyers contact me and pay for the shipping costs. These buyers will pay me first via PayPal, and then I'll simply ship out their product and provide a tracking code (and the parcels are automatically insured for up to $100). Do any of you have any selling experience on either platform you'd like to share?


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

When Living the Dream isn't enough!

The Future of Online Marketing

10 Steps to Excelling at Franchise Sales

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.