Ask YC: Why can't anyone compete with craigslist?

https://news.ycombinator.com/item?id=281741

by agotterer • 18 years ago

19 69 18 years ago

news.ycombinator.com

I can't figure out why no one has become a serious threat to craigslist. No one has even made a dent in the craigslist market share. Why?

qhoxie• 18 years ago

The very grassroots way that CL gained popularlity is making it really difficult to dislodge as the dominant figure in their market. Since people were pulled in by word of mouth originally, and (generally) feel comfortable with the site, it is going to take a significant perk to convince them to move.

My thought is that it will happen in time if they don't adapt and modernize, but they have a great hold right now.

donna• 18 years ago

How about a widget for the iPhone? Upgrade Craigslist by using the iPhone that pulls listings, receive the classified and call directly.

kqr2• 18 years ago

The value of craigslist is in its community which creates a very useful network for selling things, finding an apartment, etc. It's active community also helps police it by removing spam, thus maintaining a relatively good signal to noise ratio. So, unless you are able to create a critical mass elsewhere, it will be hard to dislodge.

akd2• 18 years ago

Because nobody is willing to compete with a company that doesn't seem to want to make money. What would you do better than Craigslist? It's not clear that there is much (besides better search), and it's not clear that you could monetize it when competing against a behemoth nonprofit.

thomasmallen• 18 years ago

Craigslist search is very good, I think.

elai• 18 years ago

They don't like allowing different kinds of searches or mashups. Some examples are searches that show included images beside each entry & a preview of the actual text, or searches that search further than just one region, or searches like housingmaps.com, which craigslist seem pretty ambivalent about. They want to stay in their own format and not let people take that format and transform into something that's possibly better.

tstegart• 18 years ago

Yeah, their lack of concern for profit made them stand out and it makes it really hard to compete. When everyone else was charging for listings, Craigslist came in and took that whole market. Now everyone else has to give it away for free as well as convince people to switch (and pay marketing money to let people know they even exist as an alternative). If you were starting a business, would you want to use up capital just to be able to give something away for free? Right now the hurdle is just to big too jump over.

shawndrost• 18 years ago

"besides better search"

You say that like it's not a big deal. It's 8 am in Honolulu, one of the smaller cl cities, and there are 200 cars posted today. There's no way to search by year, blue book, mileage, etc, all of which are (generally) possible with the existing data. I think craigslist could be much more useful.

The biggest thing holding them back is their uncharacteristic resistance to mashups. I strongly believe they're working against their own aims (public service) in shutting down services that scrape their data.

icey• 18 years ago

CL as a datasource is far less valuable as CL as a destination.

It's not an aggregator, its value lies in the fact that it has tremendous brand recognition far more than the sheer volume of data it has.

astrec• 18 years ago

I just spent a better part of an hour typing out a response only to lose it.

To summarize:

Search is key. CL are a non-player in our market, but the CL equivalent cannot compete with us in automotive.

Why? High quality reference data, the kind that means you can't add a 1999 Ford Pinto CL if no such thing exists, and if it did exist we know it came with an iPod dock, is reasonably expensive to create and maintain and generalist just don't have the focus.

High quality reference data leads to high quality search, where you search for 2007 Ford X and get only '07 Ford X' or you search for late model BMW's between $25k and $33k and get exactly those, tends to deliver high quality buyers. Search quality and lead quality are inextricably linked. Sellers tend to follow high quality buyers.

I don't know how CL fares vertical for vertical, but I'd be quite surprised if in most markets they were the #1 player in each vertical.

breck• 18 years ago

I don't think you can call craigslist anything like a non-profit until the story is over. Currently they are earning millions a year while the value of their business continues to skyrocket. I don't think there's anything wrong with this, I just wouldn't call it a non-profit because they are making hundreds of millions a year in (unrealized) capital gains. If one day they cash that in with an IPO, then all of this "non-profit" talk will just have been a clever marketing strategy. If they don't ever cash in, or give away the bulk of their fortune, then these guys are the next Mother Theresa. But only time will tell.

akd2• 18 years ago

Yes, but until they do this, it's very hard to compete with them, unless you have infinitely deep pockets.

rjett• 18 years ago

I've heard different answers to this question before but how exactly does CL make money and what is the source of these "unrealized capital gains" to which you refer?

erik• 18 years ago

I would make craigslist look good. A friend that teaches told me that Kijiji is taking off amongst his coworkers because it is more visually appealing.

froo3• 18 years ago

One thing I would love to see craigslist do is learn what kind of things I am interested in, so that it could more readily display me ads from people who might have something I'm looking for.

It's great that its so expansive, and search is ok - but sometimes while scouring it, you come up with little gems that make you go "oh wow"...

If you could create something that would give you more "oh wow" moments, I think you'd have enough of a disruptive technology to draw away some of their users.

aneesh• 18 years ago

It's not just about how good the site is, or what features they have. There are huge network effects. If you're a buyer, you want to go where there are a lot of sellers. And vice versa. And Craigslist has that.

If anyone wants to become a serious threat to craigslist, there is a huge chicken-and-egg problem to overcome.

BenS• 18 years ago

I think kijiji is on its way to getting a foothold in the free classifieds market.

In response to your question , I think it's hard because the value of craigslist is in the breadth of it's listings and readers, not in any technical feature. I think a competitor will likely have to take advantage of an already captive audience. I thought facebook marketplace had a great shot, but it didn't seem like they focused on it much.

froo3• 18 years ago

In a word? Branding.

It's the same reason you find Google & Ebay continue to dominate their respective markets.

mpc• 18 years ago

Really? Google doesn't solve any hard problems?

froo3• 18 years ago

Well when we're talking about search - both the Yahoo and Live engines have effectively caught up in providing relevant results when searching, yet Google still has a dominating position which is still growing.

That right there is a result of branding.

It's the same reason why Coke dominates the soda market, if someone walks into a store to get a drink of some form, the chance that they will get a Coke is high - when any of the drinks will essentially do the same job.

To add some perspective I'll give a recent personal experience, which isn't conclusive by any stretch but illustrates my point easily enough.

I have an Uncle who approached me last week asking for advice about buying his first computer because he wanted to get onto the Internet so that he could search for Surfing stuff (his hobby) and also use Ebay. He's never used the net before, but already has a good idea of what Ebay is, and can name sites like Google (but not yahoo interestingly enough).

tom_rath• 18 years ago

I'm finding that ebay's Kijiji is providing a good alternative (though its name is annoyingly difficult to remember or relate to others in speech).

tptacek3• 18 years ago

The network effect.

The most important feature of a classifieds site is cost to reach audience X. At this point, it is probably impossible to compete with Craigslist on that metric.

STHayden• 18 years ago

yeah it's all network effect and branding. Kijiji has been having problems finding a foot hold anywhere. Just the same way olx.com has got gotten big in the USA but is big internationally.

http://www.flugpo.com

At flugpo we are building a craigslist competitor that has better everything. But it's hard to get a large foothold anywhere with out being able to focus on a market and work at it for a long time.

fbailey2• 18 years ago

srry not to be mean but you totally missed the market craigslist is actually better than your site... we are working on a competitor but only in germany.

davidw• 18 years ago

kijiji and other sites are doing just fine outside the US. CL was a bit late to those markets. Likely, that means that there are lots of smaller, local competitors rather than big competitors.

agotterer3• 18 years ago

Thanks everyone responding. It seems the common response so far has been about reach. It makes sense... the goal of your Ad is to get it in front of as many people as possible. CL Ads have no shortage of that. Anyone who has posted knows you can potentially get a huge response, quality aside. But as history has shown, very few companies (especially web) have remained on top forever. It just interesting CL has gone this long unchallenged.

j2d23• 18 years ago

This might be true, but there is no reason it couldn't be done better.

I'll offer up one advance it could make. I'd like to click on a map and see all available apartments near my click. People lie about what "Park Slope" means and it's a waste of my time.

agotterer3• 18 years ago

I guess that was also part of my questions. Is this the end all for classified? Theres nothing left to innovate? Its just going to be a bunch of categories with multiple levels like a directory from 1998?

I'm not looking for someone to tell me what the next big thing would be. I'm just trying to understand why no major innovation has had any market pull at all. There must be a classified killer floating around out there.

whatusername• 18 years ago

So use the network effect!

Why not target a city other than SF or NY..

melbourne.craigslist.com.au looks pretty dead to me... (And melbourne is about 600k people larger than the SF urban area)

nolanbrown23• 18 years ago

The only feasible way I see to compete against craigslist is to be local. Start with one small city, get your bearings and understand the market there and then move into a larger market one by one. I would recommend against SF but Sacramento, Seattle, Houston, etc would all be good markets to launch a full-scale local classifieds. I know several companies that are working on this right now and they seem to be having some luck. It takes dedication to the market to get a foot in the door and leverage to open it all the way.

aasarava• 18 years ago

To beat Craigslist, you need to find something about Craiglist that can not only be done better -- but that users actually want more than Craigslist's reach. Both those requirements need to be there for a competitor to have a chance.

In other words, it's not sufficient enough to say, "Somebody could easily build a better-looking Craiglist". Users aren't willing to post or browse classifieds on a site that may look nicer by doesn't have the same reach.

Likewise, it's not sufficient to offer a site that has "modern" (Web 2.0) tools. Again, that doesn't help users with their primary objective: getting their ad in front of as many people as possible.

So does Craiglist even have an Achilles' Heel then? In my opinion, the one thing that absolutely sucks about posting an ad to Craiglist is getting a ton of flakey or illegible responses from people who are just wasting your time. I don't bother to post small items there anymore because it's just not worth the trouble. If someone could develop a site that filters out all the flakes, I bet you'd have a compelling reason for people to start using it.

fbailey2• 18 years ago

Mostly because people are focused on the wrong things, we are working on a german classified site, we might be looking for a US Team in some months. Preferred location San Francisco :-) that would be fun.

mechanical_fish• 18 years ago

What's wrong with Craigslist that makes it worth the loss of network effect, or the cost of looking at irrelevant ads, or - best of all - worth cash money to fix?

I don't have an answer. Until someone comes up with one...

mixmax• 18 years ago

Metcalfe's law states that the value of a network is proportional to the square of the number of users of the system (n²)

And craigslist has a lot of users...

IsaacSchlueter• 18 years ago

Whenever there is something free and useful, it's only a matter of time before a not-quite-as-free and even-more-useful alternative comes along.

Craigslist is the ultimate "free and useful" site. But it does a lot.

Dating sites, in particular, outdo Craigslist for personals pretty routinely. OKCupid and PlentyOfFish are almost as free (they have ads), but are much less spammy. (CL's w4m boards are pretty much 100% spam. The others aren't much better. Actually, I'm not sure why they even continue to keep them up.)

The last time I sold a car, and the last time I bought one, I did use CL pretty aggressively, but the actual deal I ended up making was through Autotrader both times.

So, it's possible to compete with Craigslist in specific areas, but it's a bit foolish to try to be the "all forms of classified", since they do THAT pretty damn well. They've stripped down the feature set to the point where it's just what is necessary, and nothing else. Not a bad strategy. (Arguably, the only one that really works.)

The trick is to find something where CL is the best of breed, and figure out the pain points. If the answer is "there aren't any pain points", then move on to the next idea.

profgubler• 18 years ago

I completely agree, you would have to attack it at it's weakness and then build from there. I don't think you can just throw a bunch of money at a better functioning site and get the users you need. Craigslist didn't get where they are by trying to be in every city at once. They offer every classified but they started one city at a time.

ig1• 18 years ago

I've analyzed this market quite a bit (as I've thought about creating a startup in this area) and the best attack vector I identified was to commodotize the platform.

Do to Craigslist what slinkset does to reddit. Go after a thousand niche markets. Craigslist lets you suggest new locations but that's about it. But there's no reason every small town/organization/hobby/school/company shouldn't be able to have it's own classifieds website.

vaksel2• 18 years ago

didn't edgio try this?

nuggien2• 18 years ago

no.

parenthesis• 18 years ago

Gumtree is more popular in the UK. (It was bought a three years ago by ebay.)

rsheridan6• 18 years ago

What if you had a service that stole craigslist's data, but had a better interface and better search? You would then have a superset of Craigslist's data, but with a better experience. It would probably be illegal, but you could host it in Lower Elbonia where you wouldn't get prosecuted, like Mygazines.

vaksel2• 18 years ago

there are plenty of sites that do just that, none of them gain any real traction.

rcoder• 18 years ago

Network effects are huge, and especially tough to overcome when the price of listings on Craigslist is so low, but I think there's another effect at work: namely, their minimalism actually makes the site more useful for their users than a more structured listing model would be.

By storing only very minimal posting metadata, and eschewing an API that would allow mash-ups and alternate browsing interfaces, Craigslist offers the same (often overlooked) advantage that old-school classified ads do: namely, they more or less force people to read a lot of the ads in order to have any chance of finding something.

That's better for sellers, because it increases the chances their ad will be seen, and in many cases it benefits buyers, too, since they may stumble across ads that would never have shown up in a more sophisticated search result set.

theashworld• 18 years ago

1. It works 2. It is cheap (mostly free)

This is the same reason why it's hard to beat google, ebay, etc.

Things change when the company which owns a market leading product makes a mistake - case in point: Microsoft Windows Vista.

fdschoeneman• 18 years ago

I've looked through all the comments here and while most of the answers seem to be along the critical mass variety/network effects/market reach, I think the better answer is branding. Specifically, Craig Newmark has earned my trust, and that of millions of others for no other reason than he's a pretty good dude. If you're going to beat Craigslist -- Craig Newmark -- at Craig's game, you're have to do things significantly better than they do. Not marginally better, but significantly better. And certainly there are problems with the level of spam in Craigslist, but those are solvable problems, given enough time. And the problem with Kijiji, which may have a better technical solution, is that it's run by Ebay, which once had my trust, but has since lost it.

Frankly, I wouldn't buy a ham sandwich from Meg Whitman.

As an aside, I'm listening outside my window right now, and am overhearing a couple of busboys at the nextdoor restaurant speaking in Spanish about how to find rooms for rent on Craigslist.

-- Fred

dentonbros2• 18 years ago

I have the ultimate Craiglist killer idea. Really do. If you are a hacker of considerable intellect, contact me.

dentonbros2• 18 years ago

I have the ultimate Craiglist killer idea. Really do. If you are a hacker of considerable intellect, contact me.

kehunt2• 18 years ago

Having spent a year trying to compete with Craigslist (albeit entirely on my own), I can say it's a damn hard market to break into. You're competing with free. Your market by definition scrimping on money. You're competing against a very well-known brand name.

I'd love it if my little hobby project (http://dibs.net) managed to take off, even a little bit. It'd be dead-simple to write apps against the API. I'd encourage it! IMHO, Dibs is what CL would be if it weren't built a decade ago.

slater3• 18 years ago

one problem right off the bat with dibs.net is that, as with seemingly 100% of US-based sites relying on geo-location information, it fails horribly outside of the (US-based) developer's market: I'm currently in Lucerne, central Switzerland, yet it put me in Emmen, a sleepy suburb north of Lucerne.

Edit: A quick re-test with the google map thingy shows me that dibs.net doesn't even want to know about Lucerne, and instead is fixated on suburbs and villages around Lucerne :(

My advice: Until there's some magical geolocation service that works 100% all of the time, don't offer it. I know I can change it on your site, but many many many people won't be doing that.

kehunt2• 18 years ago

Thanks for the feedback slater. It's true that geolocation data is probably less accurate outside the US. And since I'm on a budget I use only free services (the paid data sources would have more accuracy). I might be missing your point, though. Emmen is only 4.4km from Lucerne, so the map search area is nearly identical. Is your issue that it says "Emmen" at the top?

btw0• 18 years ago

kehunt, how can I contact with you? my email is on my profile page.

prism4tx2• 17 years ago

I like your site. Perhaps we can both incorporate some ides together and come up with a master plan. Our site is www.AddAnything.com and we are doing lots of marketing to get it to a satisfiable level of success. Let me know your thoughts. thanks Mike

slater3• 18 years ago

A better design for Craigslist has already been done here: http://craigslist.thebignoob.com/

TCL15• 18 years ago

For the same reason no one will be able to beat wikipedia. It's a LOVED company. People will flock to craigslist till it turns on it's users. Case in point ebay.

bradleyjoyce• 18 years ago

I think it's all about craigslist's ease of use. there is no 'required' information that you have to input. Take cars for example.. you don't have to spend 20 mins filling out a huge form that contains a bunch of [possibly] superfluous information. you just post whatever you want to post and that's it.

try to make anything "better" than craigslist almost requires that you force people to provide more information and make it less likely for them to use your service

handelaar• 18 years ago

As others have said, Craigslist has an enormous audience which is a self-reinforcing factor.

It also has a practically-unimpeachable reputation as a company which doesn't seem to have much interest in making as much money as it can - only as much as it needs to make.

It does have a number of weaknesses, though. Certain areas are gigantic, useless spam traps. Some territories (the UK springs to mind) are full of basically nothing. Some other territories (like Ireland) are almost entirely uncovered. And a spam-controlled free version of those parts CL is charging for would have a chance at competitiveness.

Nobody's "become a serious threat" to CL because nobody as yet is trying to hit those soft areas while also providing the other services you can get at CL.

Making "a dent in the CL market share" is probably the wrong metric to pay attention to, though - a number of CL-alikes have significant traffic outside the US where CL basically sucks at the moment and has no market share to lose. A quick comparison of Gumtree.com in London versus its CL equivalent shows that it's not Craigslist in pole position.

Again, on localisation of content: CL contains an awful lot of material of no direct relevance to the city you're supposed to be looking at, and all its discussion areas are US-only but propagated worldwide anyway.

I get the strong feeling that on top of all this, CL reinforces its innocuous-little-guy image with its almost wilfully unstyled UI. I doubt that a slick WebTwenny design would help any competitor.

pseingatl• 18 years ago

It odd that no one has commented on all the problems Craigslist has been having. It is inundated with spam. Some categories in some cities have been rendered useless. Take a look at the Craigslist complaint boards. People are abandoning Craigslist in droves. Craigslist today is not what it was three or five years ago. Replicate the Craiglist of three years ago, address spam and similar issues: therein lies the way to make a dent in their market share.

qw• 18 years ago

In Norway there's a service called Finn (www.finn.no), that translates to "Find"

They were backed by a large news corporation, so that probably helped. The corporation really didn't want to look too much at classifieds on the internet, since they had a paper business to protect. That's why they waited until 2000 before the site was released.

When it comes to real estate, I think they have close to 100% of the market. Only real estate agents are allowed to post ads, and I think they pay a lot to do so.

They are also huge in the motor market. You have to pay 76 USD to add your used car to the listing. There are numerous free alternatives, but people still use Finn because it is the place to go.

When free alternatives can't compete, what can?

But on the positive side, there's not a lot of spam :-)

Examples: http://www.finn.no/finn/car/used/result?CAR_MAKE=749

http://www.finn.no/finn/realestate/homes/result?areaId=20061

prism4tx2• 17 years ago

Its just one of those things where you don't really try to threaten CL, you just do what you can to have fun with your online classifieds and hope for success. Our site. http://.www.AddAnything.com is a perfect example of keeping things simple. If it happens, it happens, if not, just sit back and enjoy the ride :)

Ask YC: Why can't anyone compete with craigslist?

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