THE SCALE OF CRAIGSLIST: Did you know that Craigslist
is the 79th most visited website in the entire world? In fact, Craigslist beats out several heavy
hitters including Target, Yelp, Shopify, and even Snapchat. With 250 million monthly active users,
Craigslist isn’t that far behind Amazon themselves who boast just over 300 million
monthly active users though it should be noted that Amazon shoppers are likely way more trigger
happy. It’s not clear how many dollars worth of transactions happen on Craigslist every year. But
with that much scale and market share, Craigslist could easily be a multi deca billion company even
if they just charged a modest fee of 3% per transaction. If they charged something more
substantial like Amazon of 8 to 45%, they could probably be a $100 billion company.
But in reality, Craigslist is nowhere near those figures. In fact, Craigslist is lucky to even pull
in $1 billion per year because they don’t make a single cent on the vast majority of Craigslist
transactions which is by design. Craig Newmark, the founder of Craigslist, definitely wanted
the venture to be viable and profitable, but he was never looking to create a tech juggernaut.
His primary goal was always to just connect buyers and sellers with no BS or thrills for
as cheap as possible. And given that north of a billion dollars translates to nearly $20 million
in revenue for each of his 50 employees, Craig has never tried to take monetization to the next
level. In fact, that’s why Craigslist looks like it hasn’t been updated in decades. It’s because it
hasn’t been. Of course, Craig’s team addresses any UX issues or bugs as soon as possible,
but in terms of playing the UI game and maximizing user retention, they’re just not
all that interested. As far as they’re concerned, they’ve created a reliable platform that serves a
purpose. If that interests you, great. If not, no worries. As you can see, Craigslist is basically
the antithesis to everything big tech stands for whether it’s infinite growth, maximum profits,
or unlimited funding. But while they may not be the most lucrative website in the world,
they’re no doubt one of the most impactful. So here’s the insanely humble rise of Craigslist.
HUMBLE BEGINNINGS: Taking a look back,
the story of Craigslist dates back 70 years to December 6, 1952 to Morristown, New Jersey. Craig
was born to a middle class Jewish family that was pretty ordinary. His parents held jobs like
being a bookkeeper, an insurance agent, and a meat salesman. That was until Craig turned
13 and his father died of cancer at which point everything became a lot harder. If this was a Dhar
Mann video, this might’ve been some sort of insane pivotal moment. The point at which Craig realized
that he had to fend for themselves and start a business and work his way up. But, in reality,
this was nothing more than a sad and depressing time for Craig. He didn’t have much of a social
life to begin with, and now without his father, he was not only a nerd but a broke nerd with thick
glasses held together with tape. I don’t think being part of the school choir, the physics club,
the debate club, and the honor society really helped Craig’s case either. According to Craig
himself, he was possibly nerd patient zero. To help him with his social troubles and the
passing of his father, Craig was regularly sent to have therapy sessions with his school counselor,
but his counselor eventually gave up on therapy and just taught him chess instead. Over time,
things got much better for Craig financially. After graduating high school in 1971, Craig would
attend Case Western Reserve University. There, he earned a bachelors and masters in computer
science and entered the burgeoning industry of tech. Craig would score a programming job
at IBM straight out of college where he helped enterprise customers like Bank of America and
Sun Microsystems implement IBM solutions. This was akin to landing a job a Google today. So, little
to say, Craig never really had to worry about broken glasses or really money ever again but
other aspects of his life didn’t quite improve in the same manner, specifically his dating life. And
it’s not like Craig didn’t try either. In fact, Craig would join ballet and jazz dance classes
to meet women but given that he wasn’t exactly in the best shape of his life, he would end up at the
hospital with a hernia. Before you knew it, Craig had been working at IBM for 17 years and he was
in his early 40s. At this point, it seemed like Craig’s fate as a lost geek who spent his entire
career at a legacy tech company was basically sealed but Craig wasn’t willing to accept that.
He felt that what he needed was a completely fresh start in a new city with new surroundings. So,
with a burst of energy, in 1993, Craig would quit his job at IBM, get a new job at Charles Schwab,
and relocate to San Francisco. And just as Craig hoped this would indeed turn into a major turning
point in his life. Unlike Detroit where he used to live, in San Francisco, computers were not
the nerd thing to do but the cool thing to do. Craig started socializing with a bunch of computer
geeks who hung out at cafes and discussed the revolutionary future of tech. And it was during
one of these sessions that one of his coworkers from Schwab would introduce him to something
called the World Wide Web, and this would completely change the trajectory of Craig’s life.
HUMBLE RISE: Jeff Bezos was introduced to the internet
around the same time. He saw that the internet was growing by hundreds of percent every year
and saw massive opportunity. Craig on the other hand saw something completely different. From his
perspective, the internet was the perfect gateway to network with other like minded individuals and
finally build a social life, and that’s exactly what he did. He started regularly emailing all of
his friends from work about tech events that they could attend together. Oftentimes, his friends
would forward these emails to more friends who in turn forwarded them to even more people. Pretty
soon, Craig’s emails started reaching dozens of people most of whom, he didn’t even directly know.
Seeing this interest, Craig came up with the idea to create an email list that people could
easily join to stay up to date with local tech events. And that’s why it’s called Craigslist,
it started off as Craig’s personal email list. Pretty soon, Cragislist would grow into a strong
local community of hundreds of people who suggested that Craig turn the email list
into a website. And with that, Craig would whip together a simple site that let people post about
local events and craigslist.org would go live in 1996. To Craig’s surprise, people would start
using the site for things other than social events almost immediately. We’re talking job postings,
recruiting, discussions, and so much more which brought in a lot more people. Despite this massive
influx of users, to Craig, Craiglists was still very much just a social thing. It had made him
somewhat of a legend within the Silicon Valley community, and he loved it. All of a sudden,
he was being invited to the best parties around allowing him to meet tech leaders that he had
never even dreamt of meeting. But by morning time, Craig was back at his desk at Schwab as a hardcore
Java engineer. It wasn’t till years later in 1999 that Craig actually started pursuing Craigslist
full time. In classic Craig fashion though, it was nothing flashy. He basically just rounded
up 9 engineers in his apartment coded away, and it turned out that one of these engineers was
a super star: Jim Buckmaster. Jim had a very odd background as he had basically spent his
entire adult life at college. He didn’t have a bunch of degrees to show for it though. You see,
Jim was actually a medical student at the University of Michigan but he had stopped
seriously pursuing that by 1986. However, he would spend the next 10 years at college just taking one
class per semester while doing odd jobs so that he could keep all of his student perks. Eventually,
he would stumble his way into California at which point he would post his resume on Craigslist in
hopes of finding a job. And it just so happened that Craig himself would hire him. Truly quite
an odd back story, but don’t let that fool you. Jim was an absolute beast. In fact,
he was the guy who took Craig’s hobby website and turned it into a serious business. He created a
robust search engine, added discussion forums, developed flagging features, designed the home
page, and most importantly led nationwide expansion. Seeing this rising super star,
Craig would give Jim the reigns to the company and promote him to CEO in November of 2000,
a position that he’s held eversince. Over the next couple of years, Craigslist would grow a massive
nationwide presence but there was still one major issue: the company didn’t make any money.
HUMBLE DOMINANCE: In 2004, Craigslist would
begin charging users of certain categories for the first time. Craig very much wanted the website to
stay a free community resource, so he they mainly started monetizing users with profit incentive.
For example, users who were posting job openings or apartment listings. They started charging $75
per job listing in San Francisco and $25 per job listing in other leading American cities. They
also charged $10 per apartment listing in New York City. Many users started fearing that this was
the beginning of the end for Craiglist: it’s slow descent into in maximizing proifts. And honestly,
if that’s the direction that Craig took it, I don’t think anybody could really blame him. He had
created a massive marketplace connecting hundreds of millions of people, so wanting to monetize such
a community is only natural. Not to mention, he had a bunch of pressure to do so as well. You see,
after Craigslist started charging for postings, eBay decided to get involved. They would purchase
a 25% stake in Craiglists from ex employees, hoping that Craigslist was gonna double down on
monetization. But, Craig never went down this path which really pissed off eBay. In fact,
eBay would actually end up suing Craigslist for not doing right by their shareholders
and not focusing on revenue and profit growth. But after years in court, eBay would just give
up and sell their stake back to Craigslist in 2015. And to this day, select job and apartment
listings are the only way that Craigslist makes any money. That’s why they don’t even cross the
billion dollar mark in revenue despite having a quarter billion monthly active users. That isn’t
to say that Craigslist isn’t lucrative though. While they may have an insanely high top line,
they do have an insanely high bottom line given that they run an extremely lean operation. With
only a few dozen employees, Craiglist is often able to boast net margins of 70-80%. So not too
surprising that Craig has crossed the billion dollar mark over the years. And most of his
employees are quite well off as well. As such, Craig has largely stepped back from his role
at Craiglist and his mainly been focusing on philanthropy for quite some time now. In fact,
it’s not uncommon for him to donate more than a $100 million in any given year. And most of his
donations don’t go to your classic save the African kids or save the environment
type efforts either. Rather, his donations are often much more nuanced. He likes supporting
efforts that create a more fair and free internet, less biased journalism, greater cyber security,
and more support for veterans. For example, if you’ve ever wondered what type of person makes
large donations to websites like Wikipedia, well you’ve got your answer. But putting all
that aside, I think what makes Craig truly unique is that he’s still just regular old
Craig. If you saw him walking down the street, you would have no idea that he is the Craig from
Craigslist. He was never really interested in becoming super rich or super famous or anything
eccentric like that. Craigslist was just kind of something that happened by accident and he ran
with it as wholesomely as he could. And I think this statement really captures Craig’s entire
mission. “I am committed to customer service for the rest of my life... Death is my exit strategy.”
And that is the insanely humbling story of Craig Newmark and Craigslist. Unlike Craig, big tech has
decided to go in the complete opposite direction and it turns out that they’re now running out of
people to convert onto their platforms. Check out this video to learn more about big tech’s endgame.