June 25th, 2012
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.