Success Stories – Craigslist the Anti Profit (Yet Hugely Profitable) Company

April 13, 2016

Craigslist was started in 1996 as an online classified site. Since then it has grown by leaps and bounds yet still remaining true to its core functionality. The only real changes have been to add sections to the site, some rudimentary functionality. They have also expanded to additional cities, states, countries and languages.

What makes craigslist unique is they are a massive site with massive amounts of traffic and they have largely refused to monetize their traffic. They now charge for certain listings that originate from businesses. These fees serve two purposes. The first purpose is they help to limit the amount of spam submissions to high traffic categories. Secondly, and I believe less importantly to CL, is the fees help to generate revenue.

Craigslist Facts

So what can we learn from Craigslist?

#1) Focus on the user.

Their design has been criticized as basic and boring.

In actuality Craigslist’s highly functional design is evolved and perfect for their users. It allows them to either post or jump directly to the section they are interested in browsing with one click. Their homepage is basically a simplified sitemap. From a usability perspective the site is as straightforward as possible. Links are blue. Visited links are purple. Headlines are black (or blue when they are also links). It’s website 101 and it works amazingly well. Craigslist is a functional/utility site. Any stylized design or bells and whistles would just get in the way.

“We try to stick with what the user finds useful”
Jim Buckmaster – In response to a question about why the design has remained so simple.

#2) Money isn’t always everything. Having full control is more important.

Their distinct lack of monetization has been criticized. After all they could easily place one ad across their site and make millions. Currently, they are only receiving payments for the following:

What nobody will ever know is what would have happened if they choose to monetize (especially early on).  It is possible that they have actually earned more over time because they didn’t monetize.

What we do know is that they have been hugely successful with their current approach. What we can surmise is if they slapped ads all over and charged people (not businesses) fees when they were just starting their story would have been much less successful. Once you aggressively monetize it’s almost impossible to go back.

The larger point to this section isn’t money. The unique factor is to consider with awe is their total control of every aspect of their business. Take a moment to glance over Alexa’s list of the top sites in the US. This list is filled with sites that are owned by huge for-profit companies (with the exception of Wikipedia). These companies actively try to milk every penny of traffic from their users. They only stop throwing another thousand fucking ads all over their site when their marketing consultants use A/B tests to prove that placing another ad will actually reduce their engagement and therefore revenue.

Craigslist has maintained control of their company. This has allowed them to only make changes that align with their business philosophy. As employees and entrepreneurs we often dream of “fuck you money“. Craigslist’s massive traffic and loyal user base means they are sitting on a gigantic pile of corporate level fuck you money. They can do what they want, wear what they want and say what they want.

The great thing for us (as users of Craigslist) is they continue to use their power and control to continue making an awesome and highly valuable website for us to enjoy.

#3 A handful of talented people can accomplish a lot.

Less than 50 people manage and run one of the highest trafficked sites in the world. The team is quirky. What about their leaders allows Craigslist to embrace its uniqueness and to thrive?

Jim Buckmaster (CEO)

Here are some insights into Jim’s management philosophy:

From the Financial Times interview.

Craig Newmark (founder and original CEO)

Here are two quotes that say volumes about Craig’s management style.

Do something real, and keep it simple.
– Craig Newmark

In business, there are times when you disagree, and sometimes it turns out that you’re just plain wrong. Humor takes away tension and helps you realize you’re wrong.
– Craig Newmark

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