Success Stories: Craigslist’s Craig Newmark

UPDATED: August 31, 2009
PUBLISHED: August 31, 2009

There’s a vintage Saturday Night Live bit where Al
Franken, pre-U.S. Senate, plays a one-man band
of media. He’s wearing a satellite transmitter on
his head and holding a mic while reporting live
for SNL’s Weekend Update. This image of Franken
comes to mind as Craig Newmark—the Craig of—is conducting a magazine interview
at the same time he is snapping digital photos of a
hummingbird in his backyard. Immediately after
the interview, he will post the bird on his Facebook
page. Seconds later, he will e-mail a "thank you" to
his interviewer.

Newmark, 56, of San Fransisco, not
only Facebooks, but blogs and tweets.
He is all things to all of the new media.
He also handles customer service for
Craigslist, the online trading post giant he
created where you can find anything from
a free fridge to a date for Saturday night.

just have a very odd business model… We can do well in business by doing good for people."

Today, the market value of the company
is estimated at $1 billion. Yet the for profit
company is not motivated by profit,
Newmark says. "We just have a very odd
business model. Our business model, in a
sense, is we can do well in business by doing good for people.
We don’t run MBA style."

Newmark founded the company in 1995 as an e-mail list of
San Francisco social events sent to his friends. Later that year,
he launched the first community site for San Francisco.

Born in New Jersey, Newmark originally studied to be a
physicist before switching to computer science. He went on
to receive a master’s degree in computer science from Case
Western Reserve University in Cleveland and started his
career at IBM, where he worked for 18 years. He also was a
programmer for Charles Schwab, Bank of America and various
consulting firms.

In early 1999, he gave up software contracting and went
full time with Craigslist. It wasn’t much of a leap of faith for
Newmark. "Since I live simply and am pretty frugal, it wasn’t
an issue financially. Also, I had rather marketable skills," he
says. He also hired Jim Buckmaster as CEO, and credits him for
the company’s effortless success. Buckmaster, then an unemployed
Web programmer, got the job by posting his r´esum´e
on Craigslist.

Craigslist is privately held and doesn’t disclose financials,
but one study, from the Classified Intelligence Report, estimates
the site will conservatively generate $100 million this year,
a 23 percent gain from last year’s estimate. With Craigslist’s
success, you understand the reach and breadth of the Internet.
The low-tech site, with listings and occasional
photos, is able to hit an estimated
$100 million with advertising that is free
to users in more than 570 areas in 50
countries, except in 17 major U.S. cities,
such as New York, Los Angeles, Dallas,
Atlanta, Portland, Seattle, etc.

Craigslist charges recruiters $25 in the
major cities, $75 in San Francisco, for
help-wanted ads. The company says the
recruitment ad charge wasn’t designed
to generate profit, but to deter scammers
who posted what sounded like real jobs
but were actually work-at-home, stuff-envelopes-type cons. In
New York, real estate brokers have to pay $10 to post individual
housing listings. The company also charges for adult service ads.
Craigslist says money from that category is donated to charity.

To understand the significance of Craigslist’s achievements,
consider that the site is consistently ranked in the top 10 in
page views for English language Web sites, with Google at No.
1, according to Alexa, a Web information company owned by
another online giant,

Then, consider that Craigslist has just 30—yes,
30—employees, working out of a Victorian house in San
Francisco, managing more than 570 classified-ad sites in 50
countries. Google has nearly 20,000 employees; other companies
in the top 10 have nearly as many as Google.

Craigslist can accomplish so much with so few employees because
it operates under the Golden Rule, Newmark says. "We believe that
we should treat people like we want to be treated, and that applies to
employees as well as customers."

When Newmark says he’s been working four hours every day on
Craigslist’s customer service and four to six hours on his volunteer
or public service work, he means it. "Speaking as a nerd, part of the
dysfunction is we’re very literal. Every day is every day," he says.
Seven days a week? "Yes," he says.

Philanthropy is part of Newmark’s "iconic responsibilities," as the
company calls it. He does it because "it feels right." Craigslist reportedly
gives away 1 percent of its profits, and Newmark, personally,
is active in a variety of causes from veterans’ rights, to Middle East
peace, to good government and investigative journalism. Newmark’s
contributions can be both financial as well as active, and he’s interested
in using the power of the Internet to ramp up grass-roots
efforts for the causes he supports. "Mostly, they want me for two
things: Help them work on social media, Facebook and Twitter, and
help them get the word out better on what they’re doing. I figure I
can help."

In his blog, Newmark explains his role with charitable causes:
"Like most humans, I’d like to save the world, but I figure I need
a nap. So, I figured it’d be much easier to talk you into doing
it by talking up the efforts of people who are really effective at
helping others."

And that idea of helping others
extends to the site, as well. Because
he is in customer service, Newmark
doesn’t hear too much of the good
stuff, but knows the company he
founded helps people find jobs,
romance, furniture, lost pets—what
have you. He knows of five kidney
donations and a number of marriages
brokered through Craigslist. Its job
listings typically get 51 replies, No.
2 after, which
gets 69 replies, according to a 2006
Yahoo Finance report.

But the site does more than let
people exchange goods or services.
It’s also a social network, with discussion
boards, rants and raves, missed
encounters and the like. And not
only does the site allow users to self-publish
ads but self-police as well.
Users will turn in scammers and listings
that violate the site’s terms. And those listings get pulled.

Before Craigslist, Newmark was more skeptical of people, he says.
Founding the company "eroded my cynicism. I see that people are
overwhelmingly good. Our culture is self-policing."

His goal for Craigslist is to do more of the same. "The deal is we do
a good job of some things. We need to keep doing it," he says. "We do
a great job of classified ads in a culture of trust."