I’ve been thinking about hopeful Craigslist-crushing startups this weekend as a result of all the Padmapper drama over the past few days. Padmapper is my #1 site for apartment hunting and I really sincerely hope that Craig and Jim will at least consider coming to some sort of agreement that is beneficial to both. Even if they don’t come to an agreement, I am optimistic about Padmapper’s future because Eric is super talented and will figure it out.
This post isn’t about Padmapper though, it’s about all the startups you don’t read about that have struggled over the past however-many years because of this Craigslist-can-be-killed attitude that is pervasive in startupland. While I don’t doubt that perhaps the right person will come along someday, I also think that the formula for killing Craigslist will require so much beyond software alone (sorry nerdos) and will be a piecemeal game.
While a handful of companies like AirBNB and TaskRabbit have made some progress in their particular areas of focus, Craigslist is still incredibly dominant in the following 4 areas: selling used items, apartment search, roommate search, and jobs (other than the IRL task-focused jobs that TaskRabbit has cornered). Coincidentally these are also all the areas where craigslist makes their money.
Why do so many startups focused in the above four areas generally flounder? Here is my hypothesis: startups are failing most on the seller-side because of their inability to provide qualified buyers. Everyone has their own theory on 2-sided marketplaces and mine is as follows: if you provide a seller with a pool of qualified buyers, and a transaction happens, they will continue to sell through you. Otherwise, they will go elsewhere.
Over the past few years, I have done every one of those 4 things listed above as a seller. I have listed apartments, a roommate ad (that led me to one of the most awesome roommates ever), found several interns, and sold countless items – electronics, furniture, etc.
As a lover of startups, I will often list items on multiple platforms just to see if anyone is making a dent. C-list *ALWAYS* wins on pretty much all criteria: volume of responses, best price, best candidates, people who mostly reliably show up and always pay cash. Now look, I am not saying that Craigslist is free of sketchballs and criminals. That would be naive. What I am saying is that, from a seller’s perspective, I will take spammers, flakes, and weirdos any day of the week so long as you are bringing me legitimate buyers/options.
Nothing is worse than crickets. NOTHING.
If you are trying to compete with Craigslist in any of the above listed categories, you have to make life amazing for the seller. If that means driving a truck around “buying” couches and bookshelves and iphones for a year, consider it the cost of user acquisition.
I think we need to collectively get over the knee-jerk “problems” with craigslist:
1. that a new UI is the answer (it’s not…though maps on apartment listings would be <3 <3 <3)
2. that making the listing process “seamless” will make users switch (it won’t…the listing process is already seamless)
3. that sellers want better tools (this is party true. but what sellers really want is buyers, and they are not willing to sacrifice buyers for better tools)
4. that you can be competitive through software alone – you need SERIOUS community-building skills, potentially paid acquisition ($$$) and maybe even a logistics mastermind
I love startups and genuinely would love (and use!) a better solution.
But to be honest I kinda just want to sell my stuff and be done with it.
There’s an incredibly large and tragically unsexy opportunity hidden in all the excitement around consumer-facing “collaborative consumption”: the massive opportunity it presents for enterprise-scale logistics-driven industries like shipping, big box retail, energy and agriculture.
The same principles that apply to “Hey I have a snowblower, extra bedroom, car, desk in my office, or Chanel bag that I don’t use all the time and can rent in off-hours” apply equally well to the four industries listed above. Technology will allow farmers to connect directly with consumers to sell food and allow anyone with a car to become a one-person Fedex in the same way that AirBNB has made everyone a hotelier.
I like to think about it as distributed economies of scale. Previously, achieving economies of scale meant crippling up-front investment: warehouses, hubs, trucks, storefronts, employees, etc. Selling one frying pan costs a lot, but every additional pan sold costs you less.
We all took economics.
Yet the rise of web and mobile technologies has created an opportunity to eliminate so many of the costly steps before the actual sale happens. Up-front investment required is smaller and the economic benefits received from achieving scale come much more quickly because the risk/costs are shared amongst the entire network instead of taking on the entire burden yourself.
At some point someone made the assumption that consumers shouldn’t have to share the burden and are willing to pay more for that. I am not so sure that is true anymore.
While naysayers will point out that the theory won’t hold up for physical goods in the same way it has digitally, I am optimistic. Yes, the belief in such a system requires a rosy outlook on human nature – that the members of any given network won’t ruin the system for everyone. But just as Fedex trains its drivers not to steal packages, I think these emerging P2P systems will first learn some hard lessons and then construct incentive systems that punish bad behavior to the point where it just isn’t worth it. There will always be outliers, just like there are within the existing system.
In some ways the early successes of model suggest that we are at the very, very beginning of an emerging peer-to-peer world. Music to files to bedrooms to, soon, ALL THE THINGS. With properly constructed software, a suburban block can be Target, Costco, UPS, Exxon, and Whole Foods. Whether this will actually lead to more jobs or more efficient consumption or a better world is TBD.
I have been thinking about a succinct way to express this thought for a few weeks — that time and attention are valuable in a way that is just as measurable as real estate or oil or currency.
Saw Jonathan Harris talk at the Eyeo Festival this afternoon and he said it perhaps most eloquently: “human attention is a finite resource.” While it’s fairly obvious, I wonder why so many people have trouble applying this supposed truism.
For example, the fact that Facebook’s stock is imploding indicates to me that we dont value attention in the same way that we value commodities, when in fact they are quite similar – both are very limited and in extremely high demand.
The real problem here is pricing. The inability to determine the value of something does not mean the thing itself has no value. That is a dangerous fallacy. It simply means that there is no comprehensive system in place. Too many people understand that oil is valuable, and as a result a system developed to track the value.
How long will it be before such a system is developed around human attention? Will it be something in the future that we can buy, sell, trade and collect?
I wonder how close we are to such a reality.
Tech publications have been writing posts based on interesting Quora threads for a while – it’s great, cheap content that can be repurposed enough to be fashioned into an original story, and there’s usually a primary source involved.
But only recently has it become apparent (to me, at least) that Quora has in some ways inverted parts of the journalistic process and concocted a new kind of reporting entirely. It’s news that is different from the “social news” of years past and complements the existing status quo rather than disrupt it.
Let me be clear – I do not at all think that Quora will displace journalists/bloggers/your-term-of-choice. Instead, the site has carved out a sort of long-tail, peer-to-peer journalism that can satisfy niche audiences in an economical and scalable way that traditional journalism cannot.
Most journalists have a beat or audience that they cover, and it is their job to pick and choose stories that this audience will appreciate at scale. There is an unspoken but very real pressure to drive pageviews to these stories, as the pageviews provide revenue which is then used to pay the journalist.
By taking revenue out of the equation, the niche interests/stories now have a convenient home. It doesn’t matter if a question gets 10,000 pageviews or 10. Additionally, the most excellent thing Quora has done is create a community with the expectation that in order to consume, you must contribute.
As the site grows outside of technology (and I am pretty bullish that it will), I think we’ll see this peer-to-peer journalism evolve into an interesting and commendable force within the world of news as we know it.