If Craigslist cost $1(sethgodin.typepad.com)
sethgodin.typepad.com
If Craigslist cost $1
http://sethgodin.typepad.com/seths_blog/2009/09/if-craigslist-cost-1.html
22 comments
"Other factors he [Craig Newmark] cites are consistency of down-to-earth values, customer service and simplicity."
To me, those go away if they start charging for posts.
I'd like you to explain that one. Lots of companies charge money and have exactly those qualities.
I'd like you to explain that one. Lots of companies charge money and have exactly those qualities.
What if publishing a blog post cost $1? Would people spend more time thinking them through?
Possibly, maybe they would even have time to go and build that other classified ads site to prove the people at Craigslist wrong.
The number of people that are willing to tell you how to run your business that do not run a comparable business always amazes me (and then there are the ones that don't run businesses at all...).
The number of people that are willing to tell you how to run your business that do not run a comparable business always amazes me (and then there are the ones that don't run businesses at all...).
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Gosh, all that sounds amazing. Let me blow your minds, though: what if CL cost two dollars?
This is unbelievably weak. Godin's not exactly on a hot streak right now, is he?
This is unbelievably weak. Godin's not exactly on a hot streak right now, is he?
> Let me blow your minds, though: what if CL cost two dollars?
It's well understood that the psychological difference between free and $1 is much larger than the difference between $1 and $2.
It's well understood that the psychological difference between free and $1 is much larger than the difference between $1 and $2.
So you're saying your mind isn't blown? Hmm, might have to start shaving my head...
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Even worse is that the slant about being able to use that money to do good in the world (e.g. fund journalism, etc) is almost certainly a swipe from Spolsky's recent craigslist rant on stackoverflow. I guess they might have had the same idea at roughly the same time, but I'm disinclined to think that given Godin's shoddy writing/work lately.
Yup, incredibly weak. And it's written like no-one at Craigslist could _possibly_ have thought about this.
It's almost impossible to charge $1 for something.
As soon as you start charging you need, a secure site, a credit card processor, accountants, lawyers, tax accountants, tax lawyers - repeat for each state/province/country/jurisdiction.
You go from a company with a dozen programmers enjoying what you do to a company of 1000s of employees making sure you have met the requirements for an out of state advertiser in Nowheresville Ak
You go from a company with a dozen programmers enjoying what you do to a company of 1000s of employees making sure you have met the requirements for an out of state advertiser in Nowheresville Ak
But craigslist already does charge, for job postings in certain cities.
They're established, they can start charging and as far as I know they already are for some categories. They've not got a chicken and egg problem. So I'm not sure what's so 'unbelievably weak'.
On a side note, Joel Spolsky was arguing the same point a couple of weeks back on one of the SO podcasts. He obviously said a lot more, being Joel. I'm paraphrasing poorly but one of his better points was that there's a certain amount of potential money in CL that at the moment is being spent on the very small social good of totally free listings. But he lamented the fact that it used to be spent on the much greater social good of journalism, which is a waste as people don't really need free listings, but they need good journalism for a healthy democracy:
http://blog.stackoverflow.com/2009/09/podcast-67/
They went on to conclude charging on all categories in CL was inevitable to stop the spammers and perhaps they could use the extra revenue to start funding digital journalism.
On a side note, Joel Spolsky was arguing the same point a couple of weeks back on one of the SO podcasts. He obviously said a lot more, being Joel. I'm paraphrasing poorly but one of his better points was that there's a certain amount of potential money in CL that at the moment is being spent on the very small social good of totally free listings. But he lamented the fact that it used to be spent on the much greater social good of journalism, which is a waste as people don't really need free listings, but they need good journalism for a healthy democracy:
http://blog.stackoverflow.com/2009/09/podcast-67/
They went on to conclude charging on all categories in CL was inevitable to stop the spammers and perhaps they could use the extra revenue to start funding digital journalism.
That was a great podcast and it had me thinking. But what had me thinking more is when I found out that Joel is also subverting journalism with his million dollar plus in yearly revenue job board: http://jobs.joelonsoftware.com.
Revenue for the job board was found here: http://www.inc.com/magazine/20090101/how-hard-could-it-be-th...
Revenue for the job board was found here: http://www.inc.com/magazine/20090101/how-hard-could-it-be-th...
That's really a great point but Joel's board is not exactly the same as Craig's list. Joel's point was that Craig removed the revenue from classified ads, when the money was being used for the public good. He acknowledged that the classified ads market was fair game, but he disagrees with Craig's view that he's doing the most good keeping it free.
I think there's a notable difference to Craig's list being free vs Joel's job board costing hundreds of dollars to post. ($400 iirc) With Joel's board he's inviting competitors to under cut him, and there's still a thriving job market outside of his control. Craig's list on the other hand could be argued that by keeping the cost to zero he's making it difficult for anyone to make money off of classified ads because there's always a place to go for free ads. And if nobody else can make money at it then they can't have the option to fund Investigative Journalism and democracy and all that.
I do fail to see why any other industry couldn't fund reporting, but classified ads were a good fit.
Now I really enjoyed the argument he made, but I think Joel should put his money where his mouth is. Joel never argued that Craig should fund reporting as a good business decision, he argued that if Craig wants to serve the greater good (which Craig argues he does) funding reporting is a better way to do it. I'd like to see Joel take a % of his job board and fund the greater good. Part of the problem is how does one help fund investigative reporting? I'd say invest in a newspaper but they might not be the best source. He should run some experiments, hire an investigative blogger, start a grant program for reporter interns, stuff like that. It's his money, but this is obviously a topic he feels strongly about.
I think there's a notable difference to Craig's list being free vs Joel's job board costing hundreds of dollars to post. ($400 iirc) With Joel's board he's inviting competitors to under cut him, and there's still a thriving job market outside of his control. Craig's list on the other hand could be argued that by keeping the cost to zero he's making it difficult for anyone to make money off of classified ads because there's always a place to go for free ads. And if nobody else can make money at it then they can't have the option to fund Investigative Journalism and democracy and all that.
I do fail to see why any other industry couldn't fund reporting, but classified ads were a good fit.
Now I really enjoyed the argument he made, but I think Joel should put his money where his mouth is. Joel never argued that Craig should fund reporting as a good business decision, he argued that if Craig wants to serve the greater good (which Craig argues he does) funding reporting is a better way to do it. I'd like to see Joel take a % of his job board and fund the greater good. Part of the problem is how does one help fund investigative reporting? I'd say invest in a newspaper but they might not be the best source. He should run some experiments, hire an investigative blogger, start a grant program for reporter interns, stuff like that. It's his money, but this is obviously a topic he feels strongly about.
And there always will be a place to go for free ads, now that it's been noticed as a good idea for a website; whether it's Craig's implementation that survives or not makes no difference. The cat's out of the bag: classifieds can be free.
Yes, but sometimes free really sucks.
In general, the free things that are good still require some sort of commitment. Money is just one of the most fungible sorts of commitment.
In general, the free things that are good still require some sort of commitment. Money is just one of the most fungible sorts of commitment.
A lot of people are making money off of classified ads: it's just that they are individual small-time arbitrage entrepreneurs and small retailers, as well as people getting rid of extra stuff, not newspaper monopolists.
as far as I know they already are for some categories.
The fact that CL is already doing the thing that Godin just descended from the sky to tell us CL should do is, to you, evidence that this isn't 'unbelievably weak'? Will you start reading my blog if I promise to fill it with gems like "What if Google started matching ads with searches?" or "What if Amazon started up an affiliate program?"
For the record, I think Spolsky can be pretty unbelievably lame, as well. People have been talking about how CL should monetize for years.
The fact that CL is already doing the thing that Godin just descended from the sky to tell us CL should do is, to you, evidence that this isn't 'unbelievably weak'? Will you start reading my blog if I promise to fill it with gems like "What if Google started matching ads with searches?" or "What if Amazon started up an affiliate program?"
For the record, I think Spolsky can be pretty unbelievably lame, as well. People have been talking about how CL should monetize for years.
I have a better idea: what if it costs 1 cent?
That would generate no revenue, but harass posters enough so CraigsList would quickly go out of business.
If Craigslist charged $1 dollar I would have a really good Idea for an ad based website.
craigslistrefugees.com : For when your listing isn't worth a buck!
Advertisers: Please contact us to be put in touch with our userbase of people who take the castaway things of people who are such tightwads they wouldn't pay $1 to list. They combined the technical savvy of eBay users, the purchasing power of MySpace users, and the commercial tolerance of Slashdot users! Your CPM campaigns have never seen anything like it!
Advertisers: Please contact us to be put in touch with our userbase of people who take the castaway things of people who are such tightwads they wouldn't pay $1 to list. They combined the technical savvy of eBay users, the purchasing power of MySpace users, and the commercial tolerance of Slashdot users! Your CPM campaigns have never seen anything like it!
Craigslistrefugees.com:
Because you don't have to pay a buck!
I rather like:
Craigslistrefugees.com: Because you don't have to give a buck!
Craigslistrefugees.com: Because you don't have to give a buck!
eBay is a great example of how charging money does not curve bogus, repetitive listings or fraud for that matter. A reputation system might go a long way and make people more accountable.
eBay is a great example of how a reputation system does not curb bogus, repetitive listings, or fraud for that matter.
Well, of how their reputation system... There's a lot of room for experimentation.
What is the spam/gold ratio on ebay?
The reputation system and the monetary charges do help to curb problem users. The problems are still there, but not as bad as they would be. Or as bad as they are on Craigslist.
On the other hand, the Craigslist approach to fighting this sort of thing is "keep it local." But they've gone as far as they can with that.
The reputation system and the monetary charges do help to curb problem users. The problems are still there, but not as bad as they would be. Or as bad as they are on Craigslist.
On the other hand, the Craigslist approach to fighting this sort of thing is "keep it local." But they've gone as far as they can with that.
Apparently you have no memories of how ebay was before they started charging for listings. I have. It wasn't pretty.
When ebay started charging, the howls and cries for boycott were loud and numerous, but fact is, the quality of the listings soared, and ebay's competitors did not profit; instead, they disappeared one by one.
When ebay started charging, the howls and cries for boycott were loud and numerous, but fact is, the quality of the listings soared, and ebay's competitors did not profit; instead, they disappeared one by one.
Either that or they were bought out (marktplaats.nl for instance).
It seems of late everyone is trying to improve on something that is obviously working. ie. Craigslist
Love it or hate it, it's working for them.
Why not examine why it is working so well and take some lessons, and build better products?
Love it or hate it, it's working for them.
Why not examine why it is working so well and take some lessons, and build better products?
If you have nothing to say, say it anyway.
No objection to the usability assertions, but there's a huge problem with this idea that Craigslist will now always control the classifieds market no matter what they charge. This meme has caught on recently and it's time for it to die. It's not Craigslist's responsibility to provide journalism or to use their large size to extract profit and solve the world's problems.
If Craigslist charged $1, users would immediately flee to any new competing sites that only charged for job and real estate listings, just like Craigslist does now. Then Seth Godin and Joel Spolsky could complain about those sites' margins instead, and those sites could take those complaints all the way to the bank.
If Craigslist charged $1, users would immediately flee to any new competing sites that only charged for job and real estate listings, just like Craigslist does now. Then Seth Godin and Joel Spolsky could complain about those sites' margins instead, and those sites could take those complaints all the way to the bank.
If Craigslist charged $1, users would immediately flee to any new competing sites
People who post ads would, many of them. The question is whether people who read and answer ads also would, or whether the improved quality of ads would cause them to stay, making the competing sites unattractive due to the lack of an audience and finally forcing the posters to return to craigslist. This is what happened with ebay.
The question is not whether posting an ad is worth $1 to you, the question is whether having your ad read by enough people is - and for that to be true, enough people must find looking the ads on the site worth their time.
People who post ads would, many of them. The question is whether people who read and answer ads also would, or whether the improved quality of ads would cause them to stay, making the competing sites unattractive due to the lack of an audience and finally forcing the posters to return to craigslist. This is what happened with ebay.
The question is not whether posting an ad is worth $1 to you, the question is whether having your ad read by enough people is - and for that to be true, enough people must find looking the ads on the site worth their time.
Yeah... the fundamental cost of classified ads isn't zero, but is so close to it that anybody who tries to charge $1 will have trouble with the ones who do it for free. That's the way to think about it, really. Running classified ads for even a medium-sized city is something that quite a lot of us could toss together in a weekend, and with the correct choice of framework, we could get it to scale fairly well in another couple of weekends. There's not much challenge.
And per some conversations from a few months ago about how hard it is to replicate a full site like Stack Overflow, replicating Craigslist from a features point of view really does seem to be pretty easy. What you can't replicate overnight is the ubiquity of Craigslist; the fact that they cover the country, and that everyone, even very non-technical friends of mine, know what it is. Both of these could be overcome if Craigslist started charging too much. (Though if they stay the course I'm not sure how they could be defeated in any reasonable period of time.)
And per some conversations from a few months ago about how hard it is to replicate a full site like Stack Overflow, replicating Craigslist from a features point of view really does seem to be pretty easy. What you can't replicate overnight is the ubiquity of Craigslist; the fact that they cover the country, and that everyone, even very non-technical friends of mine, know what it is. Both of these could be overcome if Craigslist started charging too much. (Though if they stay the course I'm not sure how they could be defeated in any reasonable period of time.)
>the fact that they cover the country, and that everyone, even very non-technical friends of mine, know what it is
That's why after you build the free version, you name it something similar, eg: freelist or joeslist. Now people get the gist of what it is just from the name, you can't be sued for copyright and you're a valid competitor.
Craigslist is undoubtedly a useful service but it's trivial to implement and the only reason to use craigslist over some competitor is because everyone else uses craigslist. If you place a barrier to entry, you lose customers unwilling to pay. If you lose customers, you lose other customers.
That's why after you build the free version, you name it something similar, eg: freelist or joeslist. Now people get the gist of what it is just from the name, you can't be sued for copyright and you're a valid competitor.
Craigslist is undoubtedly a useful service but it's trivial to implement and the only reason to use craigslist over some competitor is because everyone else uses craigslist. If you place a barrier to entry, you lose customers unwilling to pay. If you lose customers, you lose other customers.
He's completely ignoring the fact that some people (a lot of people actually) won't pay any price. Changing the price from free to $1 would probably have more effect than a site changing its price from $1 to $10.
Isn't that exactly the point he's making
He's saying making it a buck will make CL a lot of money.
OP is saying that may not happen. People might move to another classifieds website in mass. CL might end up making a lot less money because less traffic = less price for paid sections of their site(ie. job sections in certain cities).
OP is saying that may not happen. People might move to another classifieds website in mass. CL might end up making a lot less money because less traffic = less price for paid sections of their site(ie. job sections in certain cities).
I think seth is saying a lot less ads will be placed, which will make the site nicer to use.
Combine that added usability with the critical mass it already has and CL stay dominant and will make more money than it does currently.
Combine that added usability with the critical mass it already has and CL stay dominant and will make more money than it does currently.
I think he's wrong about it though. Honestly, craigslist hasn't failed me much. I rarely get spam or ads. When I need to sell something, it has always worked out. Part of the wonder of craigslist is that everyone has access to it. If they charged to post, some people wouldn't pay, and the community would suffer
Yeah I saw his post more as a HUGE hypothetical fantasy.
The premise of it is based on making money. While that is usually the end pursued by most commercial ventures, Craig Newmark has made it abundantly clear that optimizing money is never the goal at Craigslist.
The premise of it is based on making money. While that is usually the end pursued by most commercial ventures, Craig Newmark has made it abundantly clear that optimizing money is never the goal at Craigslist.
The premise of it is based on making money
That's not what I read it as. I think the key paragraph is:
Money creates a sort of friction. In the digital economy, magical things can happen when there is no friction. You can scale to infinity. On the other hand, sometimes you want friction.
Especially the last line. By charging a small amount, you remove the ability to scale to infinity. I would charge far less than a dollar per ad, though.
That's not what I read it as. I think the key paragraph is:
Money creates a sort of friction. In the digital economy, magical things can happen when there is no friction. You can scale to infinity. On the other hand, sometimes you want friction.
Especially the last line. By charging a small amount, you remove the ability to scale to infinity. I would charge far less than a dollar per ad, though.
It seems unlikely that classified ad traffic drives job-hunting traffic. Does someone who is looking for a used fish tank stumble across an ad for an IT professional?
Not the way CL is organized.
Not the way CL is organized.
Right. Charging anything at all may kill the entire site.
The revenue of the site would soar, which means that the people running the site could ... change the economy of an emerging nation.
I find that whenever I say things like this, people either look at me funny or laugh. I wish more people shared this kind of naive optimism.
I find that whenever I say things like this, people either look at me funny or laugh. I wish more people shared this kind of naive optimism.
this reminds me of the "if email cost a penny" arguments. I think i agree, but I haven't thought about it enough to see the likely ramifications.
The only thing that would likely happen in both cases, craigslist and email, is people would set up free alternatives instantly. Everything needed for that is out there for free already, ready to run.
I agree the free alternatives would be set up, but in the case of Craigslist I think it probably has enough critical mass to keep its dominant position.
A free email provider would still let you send and receive messages from anyone. A free classified listings site doesn't give you access to traffic on the paid classified listings site.
A free email provider would still let you send and receive messages from anyone. A free classified listings site doesn't give you access to traffic on the paid classified listings site.
He's really using money as a proxy for identity/reputation/culpability. If you have something at stake, you are less likely to act like a jackass. Craigslist's propensity for scamming (and positive frictionless interaction) is because of its anonymity more than its cost.
I wonder how much those spammers make per bogus listing. If it's more than what legit advertisers make per listing then charging per listing will only drive out the good guys or, at best, do nothing. If it's not, charge somewhere in the middle and, voila, problem solved.
I guess the reality is, you can only have a spamerless site when all your users are more lucrative than spammers.
Anyway, even if it would result in higher profits, CL would not be interested. Because they're not interested in driving up their profits.
I guess the reality is, you can only have a spamerless site when all your users are more lucrative than spammers.
Anyway, even if it would result in higher profits, CL would not be interested. Because they're not interested in driving up their profits.
Bad idea.
As a classified ad owner (2nd largest in my country), doing so would only give a chance to a newcomer.
The problem is to charge for the first penny... http://redeye.firstround.com/2007/03/the_first_penny.html
As a classified ad owner (2nd largest in my country), doing so would only give a chance to a newcomer.
The problem is to charge for the first penny... http://redeye.firstround.com/2007/03/the_first_penny.html
Craigslist does need to start charging for personals. $1 would be pretty appropriate - enough to make spam unprofitable, but not enough to drive legit users to a better deal (at least I'm not aware of any).
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Well, sometimes friction is good, sometimes friction is bad. So let some sites have friction, and let Craigslist be Craigsilst.
In response: http://news.ycombinator.com/item?id=850380
Well, I don't think it is a bad idea.
I'm implementing a similar idea. But the adv will cost $5,00.
I'm implementing a similar idea. But the adv will cost $5,00.
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The number of scam artists using the site would go down, because it's more difficult to be anonymous when money changes hands.
Only slightly more difficult. The reality is that stolen credit card numbers are easily available to anyone who really wants to find and buy them (in bulk) and so using "ability to pay money" as a criteria for detecting non-scammers is weak. That's precisely because what scammers are good at is illegal acts, like getting stolen credit card numbers.
Only slightly more difficult. The reality is that stolen credit card numbers are easily available to anyone who really wants to find and buy them (in bulk) and so using "ability to pay money" as a criteria for detecting non-scammers is weak. That's precisely because what scammers are good at is illegal acts, like getting stolen credit card numbers.
I think the point is it would become much less worthwhile to spam the site, at least with 'simple' spam. Stolen credit card numbers are easily available but using them just to spam Craigslist is probably a poor return on investment. Ironically, more complex scams could become more worthwhile if users start to show a higher level of trust in ads because they've been paid for.
You are probably right that increased trust because of payments could make the scams work better, but bear in mind that a typical stolen credit card can be bought for a few cents. They are almost free.
If this was true, the credit card companies would all be out of business.
You are almost right:
Merchants that readily deliver goods to wherever carders (credit card scammers) ask them to -- go out of business.
Ultimately it's merchant's responsibility to make sure credit card is legitimate.
Good argument.
From their Wikipedia article, "Other factors he [Craig Newmark] cites are consistency of down-to-earth values, customer service and simplicity."
To me, those go away if they start charging for posts.