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February 26, 2011

Craigslist's Success Story

Craigslist CEO Jim Buckmaster
Craigslist's CEO Jim Buckmaster has an unusual business approach for the popular classified advertisements site. Keep it simple and don't try to maximize revenue.

Craigslist serves classified advertisements to 450 cities. The site receives more than 750,000 job listings a month, and users self-publish about 20 million new classifieds a month and has been profitable since 1999. It generates revenues by charging nominal fees for job posts in seven cities and for broker's apartment listings in New York. No user fees. No banner advertisements.

Some of the CEO’s Jim Buckmaster views

About users: Users aren't asking for text advertisements so Craigslist does not have them. Paid search can create a conflict of interest with site search. Deliver what the customer wants.

Business policy: let the users do things for themselves. Thus was there is no dependence on someone at Craigslist office. Users are better positioned than the Craigslists's staff to serve themselves and help each other.

Feedback: Craigslist loves feedback. Millions of requests have poured in over the 12 years. Everything that one sees today on Craigslist is because of user feedback.

Bells and whistles: People aren't looking for the interface to be exciting. They're looking to it to be fast, reliable, and easy to use.

About inappropriate material:  The way to deal with Inappropriate material is to let the users flag something that's inappropriate. If enough users flag it, it comes down automatically within a few minutes.

About monetization of site: Generating more revenues hasn't been tempting. Craigslist is not sure what it will do with a big surplus of cash. It might probably look at ways to give it away.

The speed of delivery at Craigslist: Craigslist is in the top 10 companies in traffic with a staff of 24, whereas the other companies on that list have staffs of more than 10,000. This is because Craigslist has invested in open source software from the beginning.  

Secret of success of low cost and speed of operations: Craigslist does not  have sales and marketing teams. it mainly has engineers. They don't have meetings.  People can work from wherever they are whenever they want. The technical team is managed on the alpha geek principle.

Views about competition: Craigslist is not setting out to conquer the world or achieve any particular market share.  It is just following up on what its users want it to do. Craigslist tries to be there in the background as an insurance policy in case the competition decides to turn the screws on their customers.

Views about newspapers: Craigslist feels that the newspapers have gotten away by taking on debt for acquisitions and focusing on how to increase their profit margins. The newspapers should try to get back to the principle that they should serve the role of the Fourth Estate effectively.

Customer loyalty issue: If Craigslist is so inept that it couldn't provide a value proposition that users find important then Craigslist itself would probably encourage the customers to go away.

1 comment:

  1. craiglist works as customer point of view and for public comfort.instead of following the strategy he follows his own principle.