This week I saw a posting on the Fast Company site about Craigslist. The post talked about how a segment on Nightline posited that the site is hurting the newspaper business. Craig Newmark, the site’s founder, said that “his site was serving customers in a way that newspaper classifieds can’t”.
For those of you not familiar with Craigslist, it’s an online listing of classified ads where users manage their own content. They have more traffic on their job boards than Monster and Career Builder combined. According to the Fast Company posting, Craiglist can also boast 3 billion page views per month. They have been in the black since 1998.
Jim Buckmaster, the CEO, was interviewed by David Kirkpatrick of Fortune Magazine at the SIIA conference I wrote about in my last posting. David estimated annual revenue for Craiglist to be about $20M. He also said that, according to a recent article in Fortune, Craigslist could be monetized to the tune of over $500M. He asked Jim why he was leaving this money on the table. Jim said that he and Craig are “not in pursuit of insane wealth” and “have enough revenue as it is”. He went on to say that they value their users and just want to keep listening to them and providing them with a valuable service.
David asked him if print papers should be worried about Craigslist and what advice might he have for print publishers. All Jim would say was that there was room for everybody, 90% of classifieds are still in print, and that he would hesitate to tell newspapers what they should do.
Regardless of whether or not you agree with Jim’s position on the accumulation of wealth, it’s hard to disagree with his focus on the customer. That focus is so sharp that Jim said they don’t even worry about competitive threats. Consider that for a minute. He invests no corporate resources in competitive analysis. He seems to regard it as unnecessary overhead. Instead he invests in providing his listings to more customers and using their feedback to enhance the site.
Craigslist is approaching classifieds with little or no overhead, with a focus on the customer, with users managing their own content, and with tools that are good enough. On top of that their business model requires little or no payment. In fact, recently some of their users ASKED to be charged (for real estate listings) so that they could re-list automatically and get some other features built into the site.
It is very clear what value Craigslist adds to classifieds. Instead of taking aim at Craigslist, traditional media should be determining what value they add. Who are their target customers and what could they be doing to serve them better?
Craigslist focuses on their customers’ well-being and Jim “can’t think of a better strategy” to pursue than doing just that. Maybe that’s the lesson here.