December 24, 2007 (Computerworld) Twelve years ago, Craigslist.org founder Craig Newmark was still a software programmer at Charles Schwab & Co. But that changed after he began sending out self-composed e-mails to a small group of friends to tell them of cool art exhibits and high-tech events going on in his adopted city of San Francisco. Newmark quit his job, did freelance programming and dove into what he saw as the promise of the Internet as a place to share information. From those original, e-mailed events lists arose Craigslist.org, a mostly free site for online classified ads. It's now grown into listings for some 450 cities and towns around the world, where people can buy and sell, find a date, and barter for goods and services. Newmark, 55, founded Craigslist -- it was incorporated in 1999 -- as a for-profit company, and works there today as a customer service representative. More than 30 million people globally use the site each month. He talked with Computerworld recently about how his site began and where it's going.
Excerpts from that interview follow:
So how did it happen that you created Craigslist? The effort started in 1994 when I was at Charles Schwab, working then on overall security architecture. But I also saw people using the Internet and figured it was going to be important eventually for anyone in the brokerage business. So I started evangelizing that at Schwab. While I was looking around at the Internet, I saw a lot of people helping each other out and thought that I should do something, too. So in 1995, I began to e-mail a bunch of friends about art and technical events in San Francisco. Over the months that followed, people kept asking if I could add the occasional job posting and listings for things to sell, too. Then I said, "Let's add apartment listings, too." It was all done through a very simple e-mail, a cc: list. This is the sort of pattern we still have today -- people suggest stuff to us, we do what makes sense and then we ask for more feedback.
I left Schwab around the same time I began Craigslist. Soon I went freelance and had a lot of fun, while working on Craigslist as a hobby. One milestone was hit in the middle of 1995. At that point, I was sending my e-mails to about 240 people, but the list at that point had gotten around to friends of friends as well. At 240 addresses, though, the cc: list mechanism broke. Then I had to use a listserve. I was going to call it SF Events, since it was still mostly events, but friends told me that they already called it Craigslist, that I had created a brand unintentionally and that I should keep calling it that because it was personal and quirky.
The thing just kept growing. Later on in 1995, I remembered that I was a programmer and that I could turn code into HTML, so I would be able to do instant publishing. It suddenly occurred to me that I could write code and that I could make Craigslist into a Web site where the code would do most of the work for me.
Was making the move from the listserve to a Web site a big transition for you? Not much at first. People started using the site, but the mailing list was still the big deal then for users. In a sense, back then it was not much different than it is now. At that point, the mailing list was still more popular than the Web site, but I have no idea when the crossover occurred. I'm guessing in the early 2000s.
You began this on a whim. Was leaving your job at Schwab a risky thing or are you a person who doesn't have such fears? The first three years of Craigslist I ran this by myself and it somehow built critical mass. At the end of 1997, there were three milestones hit: hitting a million page views a month; then the folks from Microsoft Sidewalk wanted to run banner ads on the site. And at market rates, that would be all the money I needed to live. So I figured, hey I'm an overpaid programmer, I don't need the money, and many banner ads are pretty dumb, so I decided not to run them. And the third milestone, [occurred when] a few people approached me about running Craigslist on a volunteer basis. I tried that in 1998, where we would all work together on a volunteer basis. We tried it, but it failed. Things just didn't get done. It just started slowly dying.
How did you not suffer the fate of many businesses that make unsuccessful changes, then never recover their initial momentum and eventually shut down? Why did Craigslist survive that tumultuous period of experimentation? Well, when I'm committed to something, I'm committed. Then at the end of 1998, some people approached me and helped get me out of denial about what was going on and then I made Craigslist into a real company in the beginning of 1999. I did a mediocre job at best, because I'm not very good at it in terms of the business end of the operation. I had the first ideas about it, but most of what we do is based on what people in the community suggest. Fortunately, in 2000 I hired a guy named Jim Buckmaster. He's turned out to be a natural manager and he does a great job with it.
Is it crazy to say that it's an accident that you created this site? In a way, this site is a happy accident. We built critical mass and made things happen just by doing what feels right. That statement reflects the first five years of running it. Then, when Jim took over, he made it operate much more smoothly. We're on a very firm footing right now.
Tell me more about that footing. How does the company make money? The idea is that we're a community service. Almost 100% of the site is free, but we do charge for job postings in 11 cities. We charge for brokered apartment listings in New York.
Why only in New York? I mean, in Seattle, San Francisco and other places, you'd make money. I understand, but the apartment brokers who we charge asked us to charge them because they figured it would cut down on the perceived need to post and repost the same places and they figured it would get rid of some of the scammers. The principle behind this -- in 2000 I asked a lot of people, "What's the right way for us to pay the bills, and maybe do better than that?" People told us to charge people who already paid too much for less effective ads. Specifically, the consensus was it was OK to charge employers and recruiters and to charge apartment brokers and real estate agents. And so we've done that, but only a little.
And this makes enough money for the company to survive and for your 25 San Francisco-based employees to get their paychecks? Right. It ain't bad. We just do what feels right and plug away.
So you founded Craigslist, but you aren't an executive? Why is that? Inside the company, my job is customer service. Jim is a much better CEO. And my skills are not management skills; however, I'm a really good customer service representative. I'm part of a customer service team and we handle things like cases of abuse from users of the Web site.
OK, so here you have Craigslist at your disposal. How do you use Craigslist? Do you buy things or list things for sale? Once in a while I do all the above. I do so a little gingerly because it kind of feels like a conflict of interest because when I do that I have to disclose who I am. That isn't a conflict of interest, but it still to me feels a little bit like one. I feel the way I do and so I do things gingerly and that seems to be fair.
Five years from now, what do you see changing at Craigslist? Where else can you take this? It's going to be more of the same, more cities, more languages. It's now in English and we've recently introduced Spanish, starting with Madrid. We're just starting. We have to improve technologies like multicity search. In some cases, we need to be able to search in nearby cities rather than doing multiple searches. We always need to improve customer service -- for example, we need better tools to detect and remove spam listings. One thing we found doing customer service is that there are not that many bad guys out there, that the people with good will far outnumber the bad guys. However, the bad guys make a lot more noise.
Is there anything you'd personally like to see happen with the site in the future? Will we ever see a massive redesign from the white, mostly text-based listings to something with more pizzazz and color? We're pretty much not really changing. We do one thing well and we don't want to screw it up. And regarding our look and feel, someone said that our site has the visual appeal of a pipe wrench and that was intended and taken as a compliment. We don't need much new fancy stuff in general. We need tools that get the job done.
Why has Craigslist been so successful? How did you get the whole world to know about it and use it? There are some easy reasons. We were an early mover doing what we do and it does help that the site is almost all free. We think we have a really good culture of trust and that's because without consciously doing so, we have stood by some core-shared values. The fundamental value is that we feel you should treat people like you want to be treated, which means that you provide good customer service and it means that you should have a "live and let live attitude," and it means that now and then you give the other person a break. These are values that most everyone in the world shares. The problem that a lot of people have is following through with those values. That's hard to do sometimes. And I do want to add, that there's nothing noble or altruistic or pious about this; it just feels right.
That's an interesting approach. A lot of companies, though they rake in fortunes from consumers, may not care as much about their own customer service. So why do you have this approach? Good point. I do feel as the world changes and people get together on the Internet more and more, the companies that don't provide good customer service will either change or will go out of business.
There have been ongoing concerns and criticisms from the newspaper industry that free online ad sites like Craigslist are eating them alive and drastically reducing their revenues. What's your reaction? No one in the newspaper industry seriously says that. I've spoken to a lot of publishers, editors and industry analysts. They say that our site does have a small but measurable effect on classified revenues. But they say the bigger problems are those niche-classified sites which go after the more profitable classified categories, specifically cars and jobs. There's Autotrader.com and Monster.com. Newspapers have much bigger problems. Newspapers are going after 10% to 30% profit margins for their businesses and that hurts them more than anything. A lot of things are happening on the Internet that never happened before because the Internet is a vehicle for everyone. The mass media is no longer only for the powerful, and that's a huge change for the entire newspaper and news industry.
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