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?
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]