Craigslist - a success story

The CEO of the most influential classified ads site (classifieds) of Craigslist.org, Jim Buckmaster, is known for his unusual approach to business: to do everything as simple as possible and not to strive to maximize revenue. Site design has not changed since the late 90s of the last century. No advertising banners. Only 24 employees.
Craigslist.org is visited by 20 million unique visitors per month; it occupies 46th place in the ranking of the world's most popular Alexa Top 100 sites. On May 5, 2007, Jim Buckmaster was interviewed by BusinessWeek.

Once they have not called Craigslist.org CEO Jim Buckmaster: the enemy of the establishment, the communist, the socialist anarchist. The traditional business people accepted in the company business model is confusing. However, the site of classified ads managed by him has for many years maintained its position among the most visited Internet sites, although Backmaster resolutely rejects the path of translating the success of his site into big money.
Here are some basic facts related to craigslist . The site serves as a platform classified ads for 450 cities. He publishes more than 750 thousand job ads per month. Total users independently publish about 14 million new ads monthly. According to Backmaster, the site has been profitable since the end of 1999. He gets his income by charging a nominal fee for posting job ads in 7 cities and for realtor ads in New York.
No subscription fees. No banner ads. According to analysts, the site earned $ 25 million last year, but it is clear that it could earn more — incomparably more.
How did the site manage to create such a dedicated user community? On May 5, at the Nantucket Conference, the annual congress of venture capitalists and entrepreneurs from New England, Backmaster gave an interview to Jessi Hempel, editor of the Innovation Department of BusinessWeek magazine (BusinessWeek).
Why do not you make great efforts to monetize the site?
We were told many times that we could receive many millions of dollars by placing advertisements on the site, but our users do not ask us about advertisements, and therefore we do not have them. The paid search results would create a conflict of interest with the search on the site. The better the search on your site, the less need for a paid search.
How did you manage to create such a dedicated user community?
From the very beginning, we realized that the more we get away with ourselves and give users the opportunity to do what they need, the less we will depend on our employees. Users are much better than regular staff, both in site positioning and in helping each other.
The second important thing is feedback. The site was brought to its present state by millions of inquiries received over 12 years. Everything that you see today is the result of this feedback.
The site looks about the same as in the late 90s, although you added new cities and categories. It is densely saturated with text and looks very boring. Have you ever thought about redesign?
Some people suggested making a redesign, but as a rule, they were web designers. You can look at the boring interface, on the contrary, as giving confidence in comparison with all outlandish interfaces that you can meet today. We allow to use in postings HTML. Users do not need an exciting interface. They are waiting for the interface speed, reliability and ease of use.
How do you prevent unwanted postings?
We are approaching 20 million new ads per month. The only answer to incorrect posting is to give users the ability to tag what they think is incorrect. If enough users do this, the ad will automatically go out of sight. This usually happens within a few minutes. This process is imperfect, but it is incomparably more effective compared to what a centralized approach could have been done with the involvement of specialized personnel.
You recently won a lawsuit that may be important for free speech on the Internet. Can you tell us more about this?
A group of lawyers from Chicago began the process of trying to hold us accountable for publishing a series of announcements that contradict housing laws (fair housing laws). As a rule, these ads are not perceived as incorrect. For example, the announcement referred to the church, and the lawsuit claimed that it was discriminatory against people professing another religion. The claim was rejected. This group has attacked the law, which protects online service providers from liability for the content that users publish. If there was no such law, then many sites like MySpace would simply not be able to function.
Don't take that as an obsession, Jim, but still, aren't you interested in getting more money from the site?
Labels like "communist" or "anarchist" usually appear in this place. It seems meaningless to make the site as useful as possible and not to pay attention to the monetary side of things. But generating as much income as possible is not an incentive for us. We love working at Craigslist. The site is popular with our users, and we do not quite understand what we would do with a lot of money. Most likely we would have to find a way to distribute them.
But then, like Google and other business-supported charities, you could have more influence on the world, wouldn't you?
We donate at least 1% of our income to charity, but for some reason our users do not come up with proposals for advertising on the website in order to create charitable foundations. People have their own money and can send it to charity themselves. We are not going to act as an arbitrator - to collect other people's money and decide where to send them.
An important motive in business is simplicity. How do you interpret it in your work?
In terms of traffic, we are in the first 10 companies, while our staff is 24 people. Other companies from the top ten have more than 10 thousand employees. At the dawn of the Internet boom, everyone tried to collect more venture capital money and invest it in equipment and expensive software that only the dedicated ones could understand. It never attracted us. From the very beginning, we bet on open source software.
We did not have and do not have a sales and marketing department. Mostly we have engineers. We have no meetings. We are not trying to maximize revenue. It’s just amazing how little you need employees if you don’t strive to maximize revenue.
How about to increase the number of employees? If you had not 24, but 50 people, you could raise the quality of services.
We plan to hire more technical staff and customer service staff. But we are not trying to make more money so that we can hire more people. We do not want to become an average company. We like to be a small company.
What experiences can you learn from you?
We have no meetings. People can work from anywhere and whenever they want. The technical team is managed by the most capable people. Fortunately, we have several brilliant technical specialists.
Another aspect that usually remains out of sight is how we cope with a fast-growing website, while maintaining a very high page loading speed. The main merit in this belongs to the software with open source.
Does competition, including international, worry you?
We do not even look at what other companies are doing. We do not seek to conquer the world or to seize any certain market share. We just do what our users expect from us. Our thoughts take a lot of things related to how to best serve our users. There is no time or place for thoughts of competition.
There are many companies in different countries that copied our model before we got there. As long as the quality of their services corresponds to ours, we are simply present there in the background to be on the safe side in case they suddenly tighten the screws on the users.
If you published a newspaper, what would it be? Newspapers do not particularly like you.
For me, the purpose of the newspaper is to provide readers with high-quality and accurate information. Long before my joining Craigslist, I already felt that big newspaper syndicates were moving away from this and setting business expansion and increasing profits as their main goals. If I had taken up this, I would have tried to return to serving the principles of the “fourth estate”, and would try to save the United States from the absurd war into which we were engaged.
I was very disappointed with the way the newspapers retreated from their debt when we started this war. I love newspapers and I read a lot of newspapers, but it becomes difficult when they try to lead you away from the gist of the matter. You cannot simultaneously serve Wall Street and express public interest. If I could choose, I would try to serve the community and give the money to take care of themselves.
What if your users find another site to be the best and start leaving you?
If suddenly we would be so incapable that we could not provide users with what is important to them, then I would probably be the first to encourage them to leave.