Craig “Craigslist” Newmark – Your Everyday Millionaire
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by Bryan Clark – EJ News
I don’t know about you, but I nearly kicked myself when I found out how much Craig Newmark was making for setting up an ultra-simplistic classified service called Craigslist. It rakes in millions per year for listing FREE classified ads. How did that one skip past me?
It all started for Craigslist in 1994 when Craig Newmark, a java programmer by trade, moved to San Francisco. Feeling isolated from the rest of the world, Craig began fiddling with the primitive version of Craigslist in mid-1994 hoping to create a social community for locals that would divulge information about pending local events, and provide a social environment for networking and posting classified ads.
There wasn’t a whole lot of growth out of the gates for Newmark or Craigslist, which was directly attributed to bad software. Newmark made the switch to Majordomo in 1995 after several months where the site lay dormant. This is where the growth began. To kick-start the site he began collecting business cards from everyone he knew in order to create a massive email database. This database would prove to be the turning point for the Craigslist that we have become accustomed to.
By 1999 the site had grown so much that Craig Newmark had to volunteer his flat on Cole St. to his “hobby” and it’s nine employees. The same year the site was declared a non-profit and turned down many requests from ravenous venture capitalist firms. Rather than taking the venture capital money, Newmark embarked on his own mission to keep his creation free for everyone (mostly… more on this in a minute), and to provide a friendly, trusting, and social community that was available to the masses.
Even without the Venture Capital money, and with the site being labeled as a non-profit, conservative estimates put Craigslists earnings at about 18 million a year. How is this possible for a simplistic site that is run from the same home that it started in and has only 23 employees? Some cities (New York, Los Angeles, and San Francisco) have to pay to post job listings. That’s it. That’s the whole formula! 18 million a year for charging companies to list job openings… brilliant!
However brilliant, Craigslist isn’t without opposition. Today it is catching more heat than ever for it’s “downfalls”. Prostitution, sale of stolen goods, fraud, and more have some calling for radical changes to the way Craigslist does business. Craig Newmarks response?
We cannot and will not police Craigslist. It’s an open community made to be shared by everyone. We assist law enforcement in any way we can when these situations come to our attention. But it’s not our place to decide what people can and can’t do… we just provide the place for them to do it.
Although Craig Newmark is still the face of Craigslist, he now owns less than 50% of the company. In 2001 he sold a stake of the company to the current CEO Jim Buckmaster. Another big (and recent) investor in Craigslist is eBay; who bought a 25% stake in the company in 2004.
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[...] made a post about how Craiglist was successful and how it made millions! Interesting success story that rings even [...]
Just like millions of other users I am a fan of craigslist as well. One sad thing though, I didn’t even know that the site was non profit. Still making 18 million dollars being non profit is something outstanding , kudos!!
Also, not policing craigslist is the way to go. its an open community for anyone to enter and exit. if we can’t police stores we certainly can’t police craigslist as it is an open community.
We will just have to see where craigslist heads with ebay being involved and probably more giants coming along. by the way, craigslist is a prime example which shows its not the design that catches the eyes, its the service that deserves recognition and craigslist has been able to provide that.
I always wondered how craigslist made money, I didn’t realise that some cities had to pay for listings.
That is an amazing success story that has not just happened overnight but one that has grown over years – it is good to read stories like this.
thanks for sharing.
That’s a great story. I love hearing success stories like this. It’s very inspirational to see people that have created so much success for themselves out of little ideas that they made realities.
Craigslist is a very cool tool – worldwide. Here in Thailand I’ve used it many times already in 3 years to find jobs, sell my computers, phones, and to get business for site development and blog development. The beauty of it is how fast it is and simple to use. Awesome idea that is still very successful.
Much like Google, Craigslist works because it’s simple. A lot of sites just confuse the visitor with flash and bang, while my non-web-savvy mother has no problem searching on CL.
As far as policing the site, the community (with its flagging power) tends to do a pretty good job, at least on the popular city pages.
You know, I must be one of the few people on the planet who has never actually seen Craig’s list. I’ve heard of it but never tried it. I think I’m going to have to add it to my list of things to check out
I had heard of Craigslist but didn’t know the story behind it…Its interesting how Craig stuck to his initial goal and aim and doesn’t seem to be pressured by other external factors…
I have not used craiglist before, it was something new to me, though it started in 1994. I must be dreaming then. Going to give it a try on some of my items.
I absolutely love CL. I’m not sure when I first even discovered it but I’ve literally purchased everything from writing desks to workout equipment.
I’m all about great success stories!
Good stuff:)
Craigslist is just amazing , so simple yet so awesome
The first time that somebody told me about Craiglist was just few months ago. I had no idea that it would be that huge. 18 million? WOW!!!
18 million for a non profit. Not bad at all! Craigslist is a great example of social entrepreneurship.
I was wondering how it made money, sounds like a good mission statement for Craig.
Simplicity is the key to success in majority of cases and craiglist is one of those. It is a lesson for all those out their looking to make some money with their online ventures to keep the things simple and easy to use for its users and success will follow, of course only if you are providing what people need.
Simple sells.
His secret was and still is in his MASSIVE email database. If you want have a massive clientèle ,then you must have a Massive email database.
Big fan of CL. I love the fact you can visit other cities and see what they have to offer.
I love Craig’s List. There are many opportunities on it here in NYC. Craig seems like a really good guy. I’ve heard him speak and have GREAT admiration for his abilities and his vision. Having the community monitor itself has good and bads factors. The good is obvious. What I don’t like is that people can tag your post as having bad content and it’s removed without anyone checking. It’s happened to me twice, with innocuous posts. It took a week till they straightened it out. Then it happened again. I wrote to Craig and got a response that he’d look into it. Never heard anything again and I gave up on it. But I’d definitely rather have it the way it is than not to have it at all. Craig has helped many millions of people with his venture.
The Craigslist story has always fascinated me. I’m amazed that this guy is able to make tons of money by only charging to post in “one” of the categories.
I’d love to see an interview with him.
I’ve had great things happen with Craig’s List. Amazing site. It demonstrates that “simple works”.
Yes it is impressive that craigslist have managed to become so successful. The 8th most trafficked site in the US. I have heard of a new site offering a similar service called traveluzion but it hasn’t really got off the ground yet. It will be interesting to see if Craig can keep control over the company. I would imagine ebay would be wanting to integrate is somehow with their own service. Interesting.
i’ve zligged your post as it talks about making money online. head over to zligg.com to see it rise in rank.
A very interesting profile piece, but i think the better story will be in what happens in the future.
Trying to keep it true to its not-for-profit roots is a noble ideal, but all start ups reach a point where they need to get the proper processes and structures in place not just to thrive, but also staying afloat or even imploding and withering away.
facebook, myspace, google, it goes all the way back to the first tech boom, there’s a point they all reach on their own before the business guy comes in and takes it to another level. it’s a simple fact of the tech business and i will be watching with earnest how this plays out with craigslist.