Practical Ecommerce

Craigslist.com’s Craig Newmark

Back in the mid-20th Century, painters like Ellsworth Kelly and Agnes Martin were making names for themselves practicing a form of art emphasizing extreme simplification of presentation – primary colors, basic forms, fewer details. This simple approach had devotees in other realms as well; architect Ludwig Mies van der Rohe adopted the motto “Less is more.” His buildings were basic, functional, uncomplicated. It was a minimalist movement. Minimalism has always had devotees, and it had critics who said the lack of “real design” was not art or was the sign of an untrained mind.

A latter-day devotee of minimalism is Craig Newmark. Newmark is the founder of the intensely successful Craigslist.com, and, as far as he is concerned, less is definitely more when it comes to website design and his business. Craigslist is minimalist by design, or perhaps the lack thereof, since the only thing the self-proclaimed nerd from New Jersey wanted to provide his visitors was service and convenience – and he wanted to do it free of charge, if it was at all possible.

Like those forward-leaning minimalist artists, the service-minded nerd had his critics, but he had, and has, a lot more fans—about 15 million every month, give or take a hundred thousand. That’s how many people use the worldwide network of 300 Craigslist sites, all anchored at Craigslist.com.

Classifieds and more

Craigslist consists of local classifieds and forums for Internet communities worldwide. According to the site’s FAQ page, it is “a place to find jobs, housing, goods and services, social activities, a girlfriend or boyfriend, information, advice and just about anything else—all for free, and in a noncommercial environment.”

The Wall Street Journal notes that Craigslist’s annual revenue is about $25 million. That comes from charging for a small portion of the users’ postings on the site. The Journal estimates that the laid back, service-minded creator of Craigslist misses out on about $500 million annually for not allowing paid banner ads on his site. Newmark isn’t concerned and says money has never been the motivation for operating his site.

Nowadays, two fellows who refer to themselves “dead-weight fat cats” run Craigslist. Jim Buckmaster joined Newmark in 1999 to run the “business side of the company, for which Craig is eternally thankful. This whole business and revenue thing just isn’t his bag. In fact, Craigslist really wasn’t supposed to be a business at all. This is a guy who is minimalist in everything he does and says.

Craig Newmark

Craig Newmark

Newmark: For the first few months we didn’t have a name—I didn’t think we needed one. I was using a simple computer to serve the site. I was posting events and information for people in the Bay area of California. I was to call it San Francisco Events. But people who were smarter than me said I should call it Craigslist because that is personal and quirky.

Minimalism was rampant. There was no Craigslist business plan, no bank financing, no hierarchy, no goals or aspirations other than offering a growing list of fans an excellent simple service.

Newmark: It was all a hobby. We didn’t have a business plan then, we don’t have a business plan now. We’re just fairly serious and follow our instincts. In particular, Jim Buckmaster, who really runs this place, has great managerial instincts. I don’t, which is why he is the CEO, and I’m, ahhh, working as customer service rep.

The early Craigslist was totally altruistic. There was no “revenue stream,” no business projections, no hopping on the dot-com bandwagon.

Newmark: The first few years it was just a hobby. Then the time came around when I needed some help, and I tried to do things with volunteers, and that failed. The idea of revenues and income didn’t come along until, I guess, we decided to make the company into a real company, which was in early ‘99. The volunteer thing hadn’t worked, and some folks helped me get out of denial and get serious. That meant making it a real company.

Still, the Craigslist concept remained minimal. No big capital-raising venture, no public stock offerings, although, truth be known, the site and business warranted such an offering more so than many of those that got massive Wall Street funding. No, it was simpler than that.

Newmark: Mostly it was just a matter of revenue to pay the bills. We didn’t have a strategy, per se. We just continued offering good customer service and plugging away. We were still just serving San Francisco and the Bay area. Five or six years ago, when I talked to a lot of people about how to generate revenues, they told me to charge people who are otherwise paying more money for less effective ads (elsewhere). They also told me to charge job posters for help wanted ads, and we were told to charge for real estate ads. In practice, we charge for help wanted ads in seven cities and apartment rental ads only in New York. We charge people in markets where they have asked us to charge them.

Craig is clear about the fact that the Craigslist network is really run by those who use it. Those who run it and use it depend on him and the 24 folks who work in the restored Victorian house in the Cole Valley of San Francisco (inner Sunset District). In the markets where levies for ads are charged, users thought that charges were warranted to thwart scam artists who have caused Craigslist problems over the years.

Newmark: Scams have become a problem, but we deal with them pretty effectively. When we see people “spamvertising,” running thousands and thousands of ads of a dubious nature, we start doing some blocking. If they persist, we talk to their ISP or hosting company, and if they still don’t stop, they usually find themselves “unhosted” or unable to get on the Internet.

The universal appeal of the site is the simple format, ease of navigation and the ability of the customer to quickly find what he is looking for. With 99 percent text and few graphics to slow loading, the site looks more like one that you might have seen in the days of dial-up and 28.8K modems. The minimalism is still by design, even though connections and computers are substantially faster than they were in 1995.

Newmark: We really don’t have any changes in mind. Oh, we get suggestions for redesign. But when I asked around, our users seem to be pretty happy with our site. The only people who are excited about a redesign are the design people.

Oftentimes, design seems to only follow the needs and interest of the designer and not those of the user, which could spell disaster in the fast-moving, fickle-user world of the Internet.

Newmark: I’m pretty sensitive to that matter because I realize I have no design skills. All I know is to keep it simple. I used to be a pretty good programmer, but there are a lot of people now who are much better at it than I am. I just focus on customer service and my real skill right now is persistence and commitment.

Another skill our minimalist webmaster possesses is a pragmatism that serves him well and would serve anyone who gets caught up in the hyperbole of the those trumpeting new technologies that seem to exist just for the sake of them being there.

Newmark: The web right now does a great deal of things for people. There are lots of new technologies coming online, some of which sound very exciting, some of which would help us out and some of which won’t really do very much. I don’t really know which ones won’t be useful, but I do see people using the Net as a vital communication tool. For example, right now some people are using it to expose crooked voting machines and prevent them from being a real problem. It used to be that when the powerful wanted to do something crooked, you couldn’t do much about it. But if a lot of people get together and do something over the Net, then we can do something about it.

Security is still a big issue on the Net. Craig is a fan of the open source operating systems such a Linux, on which the Apple OS is based, to get around problems that he sees in server systems based in the Windows environment.

Newmark: We’re pretty paranoid about security, so our preference is to run Linux or Mac machines. I think that if you’re serious about security issues, you have to do something. I have just been burned too many times—maybe they’ll fix it in Vista, I don’t know.

Besides security, the Craigslist engineers have another issue to deal with—speed. With something like 500,000 visitors jamming the servers everyday, 24/7, the traffic load presents some issues, even in a minimalist environment.

Newmark is pretty active when it comes to causes and things he views as important. He blogs (Cnewmark.com) on a regular basis, and his blogs may or may not have anything to do with his business. What the blog does is put him closer to his constituents and allow him to add his voice on matters that are important to him. One of those matters is what he calls the misuse of the Internet by PR people with what he considers less-thanhonest goals.

Newmark: There are firms that do dirty tricks (on the Net), particularly political ones. There are people who do things like “swift boating” and PR people who work with lobbyists who fight fairness on the Internet. For example, there are a lot of sites opposing Internet neutrality, but are all fronts for a big telethon. I would like to see people present their positions honestly.

Even though he denies his business acumen, Newmark has a heightened sense of what it takes to be successful in the Internet business arena. Ask him what makes an Internet business successful, and his minimalist side shows through again.

Newmark: I’d talk pretty much about the principles that worked for us. Provide really good customer service; don’t just give it lip service. And, try to treat people the way you would like them to treat you, which I guess is another way of saying provide good customer service.

Michael A. Cox
Michael A. Cox
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Comments ( 8 )

  1. Legacy User January 4, 2007 Reply

    Interesting article but I would have concern that it may be giving the wrong message about business planning and careful management of resources.

    Craigs list certainly is an amazing story to behold, but its an example of an oddity that gained great success by factors and luck outside of the mainstream.

    — *Joel Griffin Dodd*

  2. Legacy User January 9, 2007 Reply

    Isnt Mac OSX Unix based?

    — *Zen*

  3. Legacy User January 9, 2007 Reply

    Yes, the article mis-spoke. Apple OSX is a UNIX-based operating system. It is a flavor of Unix that I believe started at BSD but has been heavily modified by Apple.

    Linux is an operating system that is basically UNIX but was written in C+, so its not technically a UNIX system. Hopefully that clears some things up.

    — *Brian Getting*

  4. Legacy User January 11, 2007 Reply

    I am trying the same concept with http://www.allaboutsingles.com
    we are trying to offer best costumer service and very low prices. lots of fun things chat, speed dating, local events etc.
    would like to add a shopping cart for singles regarding diet products etc.

    any ideas

    — *Scott*

  5. Legacy User February 25, 2007 Reply

    Nice article. I have found another one about Craigslist. Awesome.

    — *Lukas*

  6. Legacy User May 15, 2007 Reply

    Our company, Bytheowner.com, invites our customers to also post their home for sale on Craigslist. It's a good way to increase traffic to their listing (depending on which city).

    — *William*

  7. Legacy User January 27, 2008 Reply

    I am a big fan of Craigslist.org
    However, I have wondered what it takes to run a site out of nothing to something?

    I am looking forward on working on my site and going public soon.

    Moreover, I wish all of you guy's at Craigslist.org more success!

    Yours,

    Jorge Morales (College Student at Cerritos City College)

    — *Jorge Morales*

  8. Legacy User February 20, 2008 Reply

    craig newmark is my idol…..im going to be like you 1 day….

    — *cornell sullivan*

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