You can’t help but think that the world could learn a little from Craig Newmark. Simply put, he is a nice guy who has good values. It’s a rare compliment in the often cut-throat business world. Through him Craigslist, which started as a free online notice-board helping people find babysitters and re-home old sofas, is now a global phenomenon.
Craig Newmark embodies almost every creaking stereotype of the office-bound, gadget-obsessed computer geek. He likes to tell people that he’s ‘a nerd in recovery’, (inspired in turns he says by Homer Simpson and George Costanza, the fictional neurotic, self-loathing character in Seinfield).
In truth it’s been a very long convalescence. Although born into the analogue world of the 1950s, Newmark has spent almost his entire life working with computers. He was raised in New Jersey, where his mother was a book-keeper and his father a travelling salesman, variously peddling insurance, promotional pens and, for a while, wholesaling steak to butchers’ shops; he died when Craig was 13. As a child, he wanted to be a palaeontologist, and then, when he was 11, a theoretical physicist: ‘Because back then nuclear power was cool. But then I realised I wanted a job some day, and I started looking at computer sciences.’
In 1976, at 23, Newmark left university with two degrees in computer science and was immediately offered a job at IBM’s giant IM Pei-designed campus complex outside Boca Raton, Florida. Personal computing was still in its infancy and IBM’s mainframes were the standard equipment in business and industry: ‘These were computers the size of refrigerators,’ he says, ‘and far less powerful than a PC.’
In his spare time, Craig began to try to get out more; he signed up for a photography course, took up yoga and, most improbably, enrolled in a ballet class: ‘I thought I’d meet interesting women,’ he explains. ‘There were only two other guys. Both, ah, gay.’ The ballet didn’t last long: ‘I’ve never been athletic in my life … I just ended up hurting myself, twice.’ Doing stretching exercises on the barre, he suffered a painful strain; it was diagnosed as a hernia: ‘When the doctor told me, I passed out and fractured my jaw.’
First, run and persist running
a site that’s a genuine community
service, without specifically intending
to get rich at it. Then, surround
yourself with people who are smarter
After IBM he took up with the investment bank Charles Schwab in San Francisco. ‘I was looking a lot at the Net for Schwab, seeing a lot of people helping each other out. In early ’95 I decided that I should do something, so I started emailing friends about cool events in SF. People asked for more, like job and apartment postings and the list grew via word of mouth,’
He realised he was onto something ‘maybe around the end of ’97, when I saw that the site had some kind of critical mass, and the Microsoft Sidewalk people asked me to run banner ads. That’s when I decided that we wouldn’t do banner ads.’ Newmark wanted to call the site ‘sf-events’ but more PR-savvy friends suggested calling it ‘craigslist’ to reinforce its personal and down-to-earth nature.
Gradually, through some combination of the crude utility of its design, the frankness and wit that characterised its postings, and the all-encompassing scope of its ad departments and discussion groups, it became more than that, encouraging a unique sense of community, trust and loyalty in its users.
As sites were introduced to other US cities – first Boston, then Chicago, Los Angeles, New York, and later another 196 throughout the country – Craigslist slowly became embedded in the public imagination.
Newmark still finds it awkward that such a hugely successful visible site is named after him and despite becoming a regular on guest lists of the fashionable and influential, remains painfully shy and socially maladroit. He struggles to make eye contact, has difficulty reading people and speaks hesitantly, pausing often over ‘ah’s and ‘uh’s; conversation with him can be a desolate landscape cratered with uncomfortable silences, which he fills by muttering ‘Yeah … yeah …’
So what did he do right, that so many others failed at?
‘First, run and persist running a site that’s a genuine community service, without specifically intending to get rich at it. Then, surround yourself with people who are smarter than you.’
Does he consider himself a revolutionary then, perhaps even an accidental one?
‘Hey, no. I’m just following through with basic values, like ‘treat people like you want to be treated’
Today the website is used by more than 20m people a month and is now in 50 countries, including Britain and Ireland.
His typical day starts at home, monitoring Craigslist’s message boards and advertising postings from his home office. He describes his main job as ‘customer service’.
‘I like to be in contact with what’s going on,’ he says. ‘A lot of chief executives or higher political officials are surrounded by people who filter things so much that they have no idea of what is really happening.’
On his own, Newmark can’t hope to do anything but scratch the surface of Craigslist’s ever-expanding universe. And anyway, as he proudly points out, the site is largely self-policing. Craigslist’s users root out miscreants – sneaky real-estate brokers, serial fraudsters, prostitutes posting in the casual-encounters section.
The users recruit customers by telling their friends about the site; they tell their friends, and so on and so on. Beyond a bit of customer service and some public appearances, Craigslist doesn’t really need Craig.
Newmark shares his office with Jim Buckmaster, Craigslist’s chief executive. It’s a scruffy room in a house next to a 24-hour doughnut shop in a glamour-free area of San Francisco.
It is a marriage grounded in similar beliefs. The primary one is that Craigslist is a public service as much as a private company. For Newmark and Buckmaster, the internet has a higher calling than money-making.
It’s a view many shared at the start of the dotcom revolution. But one by one, Craigslist’s contemporaries at firms like eBay and Google have joined the rat race and made billions. The Craigslist duo could easily join the dotcom rich list if they chose to sell the company but the idea is anathema to them.
They employ just 25 people, spend no money on ads, relying on word of mouth (the best reputation provider there is) and has been profitable since 1999. Craigslist doesn’t disclose how much money it makes, but industry estimates put expected revenues for 2009 at around $100m (Â£61m) and costs at no more than $6m. The site’s devoted users provide all the content for free.
Craigslist doesn’t follow the common dot-com company practice of dumping truckloads of new features on a site to impress investors and wow users because Newmark says ‘We’re driven by community needs, which has to do with effectiveness and speed.’
But then they don’t need to impress investors even though it’s a business that has Silicon Valley venture capitalists and Wall Street bankers understandably salivating. With its huge and loyal customer base expanding rapidly, so much more money could be made by adding adverts or by charging fees for other parts of the site. But there are no plans to introduce any social media tools (free or paid-for) into Craiglist.
The bursting of the dotcom bubble seems to inform Newmark’s moral stance. He and Buckmaster had front-row stalls for the first internet gold rush in the run-up to the new millennium. When the dotcom bubble burst, Craigslist was left standing – a largely free, low-maintenance community site used by, among others, former dotcom workers looking for jobs. Now internet companies are hot property again. And the second coming of the internet has shaken mainstream media just as hard as the first wave.
In the US, newspapers earn over a third of their revenues from classified ads. Nationwide classified revenues continue to grow, albeit slowly, but in cities where Craigslist is well established, the website is burning up the market. Classified Intelligence Report, an industry newsletter, found that in San Francisco the main newspapers lost over $75m in classified revenues in 2004 because of the Craigslist effect.
Newmark is looking to up the stakes in the media war and is a passionate advocate of ‘citizen journalism’.
Last year the New York Times reported that a number of in San Francisco people were raising money to commission a piece on investigative reporting. Once the piece had been written up it was up to the commissioning group to decide what to do with it – most likely give it to the newspapers to publish for free to promote their issue, or maybe sell it to one newspaper as an exclusive. Can he see this model catching on as a viable business?
‘I like the model, but don’t have a clue regarding its viability.’
He says he’s happier than he’s ever been. He has a low-key local fame and – better yet – influence. His moral stance gives him more say and makes him more influential (and disruptive) than he could ever hope to be if he sold out.
Newmark has his issues, but they are not about money. ‘I guess I could be really rich if that was what interested me,’ he says. ‘My instincts tell me I could do more good following the path I have chosen.’
A Democrat by nature (he supported Obama in blogs amid the suspicion his candidate might actually be willing to change the business of politics once elected) and is a passionate supporter of the new administration’s $50m Social Investment Fund. So how will he be pressed into service?
‘I have some real experience in human behavior that could be useful, like in the moderation of online discussions. Also, enough people in Washington are Craigslist fans that I can talk to them about helping them serve the public better.
‘Over the next year I’m committed to substantial customer service work at Craigslist but I’ve got much time left over, and I figure public service would be good, done in my own way.’
There’s not many web entrepreneurs who could say the same.