Most Innovative Companies
Updates from the MIC alumni.
SOMETIMES, AMAZING businesses are built by a driven founder long obsessed with a single idea. Then there’s Craigslist. The ragtag online classified-ad operation happened by accident, threw every tenet of design out the window, and has always been run by individuals apparently allergic to virtually every dearly held belief of business and management. It nonetheless became one of the lasting icons of the early Web and is, by all reckonings, insanely profitable. Though its tightlipped founder, Craig Newmark, won’t talk about that, in his Inc. interview he still has lots to say about Craigslist’s rise, the power of listening, how he’s using his newfound influence, and why he’s such a terrible manager.
Newmark: I was a full-on nerd, and that was a lonely thing. I didn’t realize that wearing thick black glasses taped together and a pocket protector was not attractive.
My definition of nerd has to do with a lack of social instinct for people, a lack of learned and ingrained social skills. I was reasonably socialized sometime into grammar school, but around the fifth or sixth grade, my social skills didn’t develop. I didn’t gain the normal instincts people have for how you relate to others. I have since learned social skills and I can simulate them for short periods, but I do feel somewhat detached.
New-school nerds are cool. There’s nothing cool about me.
I learned that my social skills—or lack thereof—really held me back professionally. And when you have big organizations, people form factions or silos, which sometimes operate at cross-purposes—and there are people who want to do a good job, and some people who just want to advance themselves.
I realized the dividing line between small and big, when it comes to organizations, seems to be the Dunbar number [the maximum number of social relationships any person can manage cognitively] of 150. When I was CEO—which was only for a year—I tried to, let’s say, shape our DNA such that we would never grow big. [Craigslist currently employs “40-some” staffers, according to the company.]
In college, we were on the arpanet. I sensed it would be big, but I wasn’t passionate about it then.
It had immense potential, but I was too focused on class work. I should have focused on what I could do with the tools that were right there. I could’ve reached out to people with similar interests.
Later, in ’84, I read Neuromancer, by William Gibson. That vision of what cyberspace could be, and the way regular people—having no power or influence—could work together to accumulate power from the grass roots up kicked off the imaginations of many people. I started seeing that vision again in the early ’90s. I’d started spending time on the WELL, a small but highly influential virtual community. I left IBM and went to Schwab in 1993, and it had a brown-bag-luncheon series where I went around the company saying, “Here’s the internet. It’s going to be how we do business someday.”
The first ones had to do with two events: Joe’s Digital Diner, where people would show the use of multimedia technology. It was just emerging then. Around a dozen of us would come and have dinner—always spaghetti and meatballs—around a big table. And a party called the Anon Salon, which was very theatrical but also technology focused.
Ten to 12.
People just kept emailing me asking for their addresses to be added to the cc list, or eventually to the listserv. As tasks started getting onerous, I would usually write some code to automate them.
And I just kept listening. At first, the email was just arts and technology events. Then people asked if I could pass on a post about a job or something for sale. I could sense an apartment shortage growing, so I asked people to send apartment notices too.
By the end of 1997. It was still just me, and at the end of that year I hit about a million page views per month, which was big then. Microsoft Sidewalk [an ill-fated network of online city guides] wanted to run banner ads. But a theme coalescing in my head was: people were already paying too much for less-effective ads, so we could provide a simple platform where the ads would be more effective and yet people would pay less. That made sense at the time and has worked out pretty well.
I was getting increasingly serious about the site and had gotten some volunteer help, but at the end of 1998, some people who had been using the site for years told me at lunch, “Hey, volunteering isn’t working. You gotta get real. You gotta make the site into something reliable.”
I had been in denial. I could see things starting to not work. Postings didn’t get done in a timely way; the database didn’t get pruned of old listings in a consistent way. Trying to run a business collecting fees for job postings—I couldn’t make it work on a volunteer basis. Maybe someone with better leadership skills could, but I couldn’t. So I had to get real and go full time. I had to commit. I left what I was doing—programming for a company called Continuity Solutions, which was doing some interesting technology for customer service—and I made Craigslist into a company in early ’99.
I was talking to a lot of bankers and VCs, socially. They were beginning to fantasize about the way the internet could happen. They were telling me to do the normal Silicon Valley thing: monetize everything. They were saying that this could be a billion-dollar company. But I had already made the decision to not highly monetize when I turned down the banner ads.
That year, people helped me understand that, as a manager, I kind of sucked.
I had trouble making tough decisions. I was not any good at the job interview process, and I made mistakes. I found it very difficult to fire anyone. I didn’t make major decisions that required some boldness, like adding new cities. I knew we needed to expand in that way, but I guess I didn’t have the guts to do it. I thought, for example, that maybe we needed to do some advertising. In an HR magazine, for job postings. So I hired someone to do marketing, and put up a couple of ads, and that was just a wasted effort. Word of mouth is what really worked.
I made one really good hiring decision, which was choosing our current CEO, Jim Buckmaster. I saw his résumé at the end of ’99 and hired him around then, as a lead tech guy. I realized that he could run things better than I could.
I was able, to some extent, to divorce my ego from my CEO role. And I’d had a lot of lessons. I’d seen micromanagement be a big problem in the tech industry. I just saw lots of situations where people screwed up by interfering with people who could do the job.
I didn’t know how to do fancy.
I didn’t know how to design fancy. The evolution of Craigslist was based on listening to people as to what they wanted and what was needed. People consistently told us they didn’t want fancy stuff; they wanted something simple, straightforward, and fast. We listened to consensus rather than what someone was trying to talk us into.
Or sometimes you may hear, from 10 people who love fancy stuff, that we should do this fancy thing, and then you hear from a million other people saying keep it simple.
In the past two years, I’ve delegated more leadership to the customer service team. I realized that I was not helping. I was inhibiting. I do minimal stuff to stay in touch, because detachment from your thing is wrong and damaging.
I regard my life over the past 20 years or so as completely surreal. I didn’t expect that my hobby would turn into a successful business, and also a very successful way for people to help one another. And I never expected that would lead me to do a lot of other civic engagement and philanthropy.
What it taught me is that partners of any sort need to be trustworthy.
It’s all a collection of the ad hoc.
Doing well by doing good is a business model, and Craigslist is about having a business that helps people help one another out. Craigconnects is my civic engagement thing where, in a number of areas I believe in, people help people. One is veterans and military families. I’ve gotten behind voting rights groups in a purely nonpartisan way—people need to be voting. You have to have good information to vote, and I support the Trust Project, which is working to develop indicators of trustworthiness that can be done as HTML tags in articles. One could be a link to an ethics code; one could be a link to an accountability process. There could be tags to whether or not this is original reporting, maybe, to distinguish opinion versus factual pieces. So any news aggregator would look for these tags, and if the reporter or the news organization has committed to them, then that article would be ranked more highly than articles from outlets that haven’t made this commitment. I’m also going pretty big with Wikipedia. While it has issues, it has become a major source of breaking news. Like anywhere, something may go wrong, but in Wikipedia it gets corrected. [Newmark gave $1 million to the Wikimedia Endowment in June.]
I don’t have a sweeping vision. I just find cases that either have potential or are already working. Kiva [the microlender] and DonorsChoose are good examples of that. And I’m working with the Global Fund for Women. We’re talking about a campaign to help invent a new normal, when it comes to guys funding women’s charitable initiatives.
What I’m good at is telling people, “Hey, here’s good stuff going on.” I don’t think I’m going to be a big leader. The world is not right for one guy on a horse. It needs many great people across the world who will lead and accumulate power that will be mediated over the internet. I don’t think I’ll be one of them. I don’t have the energy, or the hair, and certainly not the charisma. But if I smooth the way, that’s pretty good.
Many are marginally articulate. I’ve found a lot of cases where people were doing good work but just didn’t know how to articulate it very well—like Blue Star Families and Consumer Reports. (I’m on CR’s board.) But much more distressing is the inverse. Once I thought that any charity that got 501(c)(3) approval would be doing good things. I now know that some are ineffective, and some are actively predatory.
From what my team and I have observed, such businesses are imperfect, but the world is better with them. If I contribute a thousand bucks and 800 is used effectively—well, that goes pretty far in parts of the developing world. Everything about finance and business is flawed. You do what you can to make things less bad, and then you do more to make things less bad.
I couldn’t have started earlier, because the timing is what mattered. I was very lucky. I got laid off from Charles Schwab in 1995. I’d been exposed to what the internet and the Web could be, and then Schwab dumped me into the geography that was the pointy end of the spear with a respectable buyout.
Sometimes businesses think, “If we build it, they will come.” They won’t. But when I built Craigslist, I was building something that people really wanted and there wasn’t much else going on. I didn’t understand the value of media and communications, identity, and branding. I wish I had known about them 30 years ago, but those things are never taught in computer science curricula.
And maybe I was ready to start learning social skills.
Jon Fine is an Inc. executive editor.
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