Craigslist CEO: Be Successful In Business By Pleasing Customers

Craiglist’s CEO, Jim Buckmaster, gave a fantastic interview to Marketplace’s Kai Ryssdal yesterday in which he explained that Craigslist runs its business by simply doing what its users want. Why doesn’t Craigslist have ads? The users never asked for them. How do they decide what cities to introduce? They wait for the users to tell them. Is he crazy?

From Marketplace:

Ryssdal: How important is remaining ad free to your business model?

Buckmaster: The way we look at it is our users aren’t asking us to put banner ads or text ads on the site, so we don’t consider putting them there. That’s kind of the way we make all of our decisions.

Ryssdal: Based on what the users want.

Buckmaster: Yes. Certainly we are approached from time to time and it’s explained to us the massive amount of revenue that would come should we put text ads and banner ads on the site, but the simple reality is that users aren’t asking for it so we don’t consider putting them there.

Ryssdal: Do you find people who you interact with in your professional life . . . business consultants, and other CEO’s and who knows who else you talk to . . . do they just kind of shake their heads when you say, “massive revenue opportunity but we’re just not interested.”

Buckmaster: Certainly there’s been a lot of head shaking. If you go back to the Internet, the original Internet or dot com boom and bust going back to 98, 99 . . . people were very skeptical of..we were a company who at any time could have gone public or sold ourselves to someone else, or the thousands of Internet companies that were started for the purpose of making a killing, they shook their heads at our approach. And the ironic thing is virtually every one of those businesses that was founded on the Internet to make money went bust without making a nickel and we’ve just kind of chugged along and been profitable even though we never really set out to make money.

Later Rysdall asked how the company chose which new markets to introduce Craigslist into. Turns out, they make those decisions the same way they make all of their decisions, based on what users want:

Ryssdal: What is your criteria other than a whole bunch of people asking for a city?

Buckmaster: That basically is the criteria.

Ryssdal: That’s it?

Buckmaster: Yeah. Like a lot of stuff we do, we’ve found it to be very effective and basically fool-proof to just prioritize our activities according to what users are asking for.

Ryssdal: Seems bizarre in this economy to be so democratic.

Buckmaster: Well, it certainly makes our lives simpler since we just have the one criterion to go on. We don’t have to sit in rooms trying to figure out how to conquer the world because basically we are not trying to achieve any particular market share or world dominance. We’re just trying to follow up on requests that we get from users.

Ryssdal: And yet you have enormous market share and very nearly world dominance.

Buckmaster: Well I guess irony is . . . well I think maybe it’s not ironic in way that . . . what better way to operate is there than to just follow up on what your customers or users are asking for and to just block out everything else, you know, everyone else who is asking for your time? Much of it just takes away from what you should be doing, which namely, is trying to please your users and customers and, I guess the general public.

Ryssdal: And make a buck or two, right?

Buckmaster: It is important for us to make money because we don’t want to have to borrow or sell ourselves.

You can make money by pleasing your customers? Really? You can listen to the interview or read the entire transcript here.

Service comes first for Craigslist CEO [Marketplace]

Comments

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  1. BlazerUnit says:

    Paying close attention to actual users instead of consultants? Who does Craigslist think it is?

  2. laserjobs says:

    Now lets hear what Craig Newmark has to say. Actually don’t bother, you can read all Craigs posts under various aliases in the Man to Man forum.

  3. b612markt says:

    @laserjobs: How classy. Thanks for bringing your eloquent insights to the comments.

  4. b612markt says:

    @laserjobs: How classy. Thank you for your adding your eloquent insights to these comments.

  5. SkokieGuy says:

    @laserjobs: Spend a lot of time there reading the posts?

  6. Munsoned says:

    I heard this on the radio last night. The CEO said they’re up to 10 billion page hits a month (I think), yet only have 25 employees.

  7. GenXCub says:

    I remember when moving to Vegas in 2001, after San Francisco and really missing craigslist. I offered to create the Las Vegas site for them, I wanted one so bad. Thankfully they said they’d make one for Vegas at that point.

  8. RickinStHelen says:

    I may be naive, but how do they make money?

  9. Trai_Dep says:

    Shh.
    Laserjob’s a bit sensitive on the subject because Craig rejects him. Repeatedly, publicly, and as of late, with an accompanying restraining order, in the M4M forums.

    I like Craig’s because it’s the antithesis of flash and Web 2.0-edness, simply delivering a valued product in a cunningly subsidized fashion. And listening to customers.

  10. RandomHookup says:

    So, the readers asked Craigslist to start charging my company for job posts? I demand a recount!

  11. Pylon83 says:

    @RickinStHelen:
    They charge for certain ads, such as employment in certain cities, apartment listing in certain cites.

  12. Trai_Dep says:

    @RickinStHelen: Unicorns and puppies frolicking in fields of buttercups.
    And they charge for real estate ads and for posting Help Wanted ads in the larger cities.

  13. mbprice says:

    @Trai_Dep: You know, you laugh, but unicorns and buttercup-frolicking puppies are a freaking goldmine right now.

  14. Ninjastorm66 says:

    @RandomHookup: Actually, yes, they did.

    They asked for it because in the big cities the job postings were becoming flooded with hiring agencies and whatnot, instead of actual employers. It was becoming impossible to find a job posting that directed you to the actual company that was hiring. There was also lots of scamming (On Craigslist… Imagine that)

    So the users butted the scamming/spamming agencies out by making them pay for ads.

    Granted it was probably Craiglist’s idea, but they made a forum devoted to it and decided after months of debate to charge a fee. (This is the Chicago experience at least)

  15. TechnoDestructo says:

    I wouldn’t mind seeing ads on Craigslist…or anywhere…if the alleged targeted ad revolution had ever actually happened. If I saw ads for things I might ever conceivably want. The technology may exist to match me with appropriate ads, but I don’t think the ads exist.

  16. LikeYourFace says:

    @TechnoDestructo: Google fanboy. Stop drinking the kool-aid.

  17. spinachdip says:

    @Ninjastorm66: That turned out to be a win-win for everyone. Charging a small fee tends to be a decent bozo filter, while legit placement firms and apartment brokers don’t mind since their commissions more than pay for the ads.

  18. typetive says:

    Hmm, “be excellent to each other.”

    [www.imdb.com]

  19. econobiker says:

    Ebay, is anyone there or Pierre listening?

  20. bjarmson says:

    @econobiker: Yeah, but it only makes them want to start a legal suit.

  21. pc-vip says:

    Here’s the thing: What Jim is saying makes PERFECT sense. Ever try to reach anyone at CL when you have a problem, though? Not possible. E-mail only, and they don’t respond, period.

    So yes, customer service IS what makes a business grow. AND Craigslist doesn’t do it.

    Jeff Yablon
    President& CEO
    Virtual VIP

  22. @pc-vip: Hey Yablon, how about Yablow me?

    Craigslist does have a major advantage over a lot of companies in that it has very little overhead as far as inventory, etc.

  23. sgodun says:

    “Craigslist” and “pleasing customers”? Sorry, I just threw up in my mouth a little.

    If Craigslist is at all interested in pleasing customers, they’d PROACTIVELY get rid of all the fuckin’ spammers, scammers, drug dealers, prostitutes, and thieves that populate CL by the thousands each and every day.

  24. RandomHookup says:

    @Ninjastorm66: Interesting info. I’m not surprised, but how was Craig paying for things when it took off in SF? I know he started charging for jobs, I’m just wondering what he would have done if they said “NO”.

  25. Gann says:

    @pc-vip: So I guess what they’ve been doing since their inception is not ‘growing’ in your opinion? Spoken like a true bureaucrat. Craig’s list has been extremely successful for the same reason the google has been. It provides a simple service, provides it well and that’s it. No, you cannot talk face to face with someone at CL, but they do actually respond to their user’s needs, which is a step above and “customer service” system I have ever dealt with. I’m glad they don’t have “customer service” so my problem can get lost in a maze of paperwork and frustration. That’s just my opinion, but I’m no VIP so I probably don’t know what I’m talking about.

  26. coraspartan says:

    I ♥ craigslist!

    It has seriously changed my life. I can go to CL and find pretty much anything I want–a job, a house, a car, people to talk to–and it’s all FREE!!! What a concept.