A Stroll Through the Craigslist-Crusher Startup Graveyard

http://amandapeyton.com/blog/2012/06/a-stroll-through-the-craigslist-killer-startup-graveyard/

by inmygarage • 14 years ago

142 84 14 years ago

ericingram• 14 years ago

My thoughts exactly, well put.

51Cards• 14 years ago

Up here, "north of the border" in Canada, Kijiji has cut a swath through Craigslist use. I rarely hear Craigslist anymore but Kijiji is almost ubiquitous for online classifieds, especially in my non-tech friends. "Throw it on Kijiji"

I don't know why it took off so strongly here in Canada but the speed at which it did surprised even me. I have also been surprised it hasn't done the same in the US since it's not that culturally different when it comes to online classifieds.

Edit: http://ontario.kijiji.ca/

jenius• 14 years ago

It looks like this site doesn't exist anymore and was bought by ebay?

ricree• 14 years ago

The Canadian one still exists as an independent site (http://windsor.kijiji.ca/ ).

For the US equivalent, it looks like someone thought it was a good idea to use an unreadable graphic as its interface.

rst• 14 years ago

Kijiji was the would-be Craigslist killer that eBay built internally after acquiring a minority share of Craigslist itself, and then finding out that Jim and Craig were not interested in the full merger that eBay had expected would follow in due course. (From which much legal wackiness ensued, as Craigslist tried to limit eBay's access to their internal data once it became clear that they would be competing. This is probably still ongoing.)

Looks like they've dropped the separate branding, at least in the US.

ilamont• 14 years ago

Depends where you are. Vancouver and Toronto Craigslist activity is very strong in the "For Sale" categories with many thousands of new postings every day. Maritimes, Quebec and some western cities are quite desolate, except for ticket-selling bots it seems.

FigBug• 14 years ago

I agree it really depends on where you are. Craigslist was slow to expand past the major Canadian cities, so in the smaller cities UsedEverywhere or Kijiji were first and remain more popular.

untog• 14 years ago

Agreed. I used to live in Victoria, on Vancouver Island, and http://www.usedvictoria.com was probably mentioned just as much as Craigslist. Goes to prove that local services can sometimes make a dent- not a significant one, but I'm sure someone is making a living out of it.

janulrich• 14 years ago

Living in Vancouver, I disagree. Craigslist is still the main buy/sell website here. I've tried to use Kijiji a couple of times with the same results as the original poster - not much response.

ahelwer• 14 years ago

Seems to vary pretty widely place to place. Kijiji is the site of choice in Calgary, where I live. Brandon MB has a standalone website, eBrandon.

Avitas• 14 years ago

Here in the states, there are also the realty-related megasites like:

- realtor.com - zillow.com - trulia.com

Realtor.com is a giant commercial realty sales site that just happens to list rentals. The interfaces to the above sites aren't utterly terrible, but they're certainly not great (i.e., not lightning fast, crowded with extraneous material, etc.).

The rental listings still pale in comparison to CL, but they've got much bigger pots on the stove. Who knows, one day they may decide to split off a sub-site to handle traditional residential, commercial, short-term and non-traditional rental properties.

g8oz• 14 years ago

In the Toronto rental category at least CL is still tops.

sien• 14 years ago

In Australia Gumtree owns the space. Craigslist gets very little use.

http://www.gumtree.com.au/

sanswork• 14 years ago

Funnily enough Gumtree is actually owned by Kijiji which is in turn owned by eBay.

kristofferR• 14 years ago

Here in Norway, Finn.no[1] is totally dominating the classified market (and other things like travel aggregation).

They're quite innovative and open actually. They actively ask for feedback, release beta applications and statistics, and release new and useful features all the time. Most people, geeks included, actually likes them.

Norwegians (and other Europeans) usually envy the US for being the first to get a lot of web services (we still can't rent movies online like Netflix), but Craiglist is one of the few things I don't exactly envy you for. Pity would probably be a better description.

[1] https://www.finn.no

davidw• 14 years ago

"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."

See "positive network externalities", as mentioned here: http://news.ycombinator.com/item?id=4152078

lesterman• 14 years ago

This article didn't bother to list the contents of the graveyard, so I tried. But all I can find are success stories:

* Kajiji - popular in Canada (according to another poster)

* OLX - popular in Spain and Latin America [crunchbase]

* okcupid

* AirBnB (mentioned in post)

* StubHub

* Etsy

* Legal Zoom

* Elance

danso• 14 years ago

Is it fair to list okcupid as a direct competitor? I think dating sites, with the social profile aspect, is almost fundamentally different than a personals ad.

I guess you could argue that is the case with airbnb, but I don't think the transaction type is more limited than the kinds that happen in relationships.

Maybe the better comparison would be PlentyOfFish

iwejfweoifjweif• 14 years ago

AFAIK OKCupid has never considered craigslist to be a competitor

jasonlotito• 14 years ago

LesPAC.com is popular in Quebec (Being French). Kajiji and LesPAC both get buyers up there.

smackfu• 14 years ago

The biggest part of the graveyard is the profitable part of nearly every print newspaper.

freshfunk• 14 years ago

It seems like a mistake to compete with Craigslist in its entirety. They had years to grow their community and brand while maintaining a relatively low cost structure.

Startups that are concentrating on different pieces of the pie and providing a better experience seem to be on the right track. AirBnb, OkCupid, and the other companies listed in the comments here. Even in the jobs space I find LinkedIn jobs having more and better listings than Craigslist.

It's easy to hate Craigslist because of stories about it "crushing" other companies. But much of Craigslist's value is in its data and that data being solely available on its website. If that data was available on competitors, then it would lose leverage. This is true for many websites out there and they go to lengths to protect that data (eg. LinkedIn shutting off its API to third-parties).

conipto• 14 years ago

And this, everyone, is why Craig's most brilliant move is to not allow integration. The only way anyone beats them is to "also have that too." In this case, "that" being the craigslist user base.

GFischer• 14 years ago

I think that most startups that try to compete with Craigslist fail in their strategy.

I was lucky to have professor Jakki Mohr as a teacher, and she advocated the "bowling alley" strategy:

http://wisepreneur.com/innovation-marketing-2/innovation-mar...

As the article states, and lesterman shows below, there are several startups that succeeded in beating Cragislist.. but they all did so by focusing on a specific niche.

mistermann• 14 years ago

Facebook with public anonymity for your listings would solve most of these problems, as well as go a long way to reducing fraud.

MartinCron• 14 years ago

I think I love this idea.

I've seen a bunch of my friends use Facebook as a "pre-craigslist" as in "if none of my friends want it first, I'm going to CL this TV"

I would feel much more comfortable buying something through a friend or a friend-of-a-friend. And I would start to consider more risky things (e.g. finding a babysitter) through Facebook that I wouldn't ever do on CraigsList.

abruzzi2• 14 years ago

Please don't tie Facebook to logins on other sites. It excludes half the population of the US, more in other countries, and if you add a non Facebook option, the scammers will just use that.

Craiglist's solution is simple--their exhortations to only deal locally means that if I'm looking for a house or a car, I will see it before I give money. The scammers are aiming at people that ignore that rule.

Plenty of people buy and sell long distance on Craigslist, but that is really a caveat emptor situation outside of how the site is intended to be used.

clarky07• 14 years ago

That's sort of an interesting thought. Being the buyer for early sellers as a "user acquisition cost." Clearly this can't be done on a large scale, but I don't think anyone would plan on doing a national craigslist rollout. I wonder what kind of budget you'd have to have to do this for 1 small city for a few months.

Keep in mind you don't have to keep people's stuff, you can always re-sell it on ebay or craigslist :-) (and re-list it on your mythical new site. now you have inventory for the buyers and you are the buyer for the sellers)

jaggederest• 14 years ago

That's really an interesting idea, you become the market maker - a monopoly and a monopsony in one, much like amazon is for electronic books right now.

minouye2• 14 years ago

I'd also say that a lot of startups don't do a very good job of competing. YardSale launched a big press push last week saying that they'd post your listing to Craigslist for you. The contact link in the Craigslist post goes to a sign-up form for the Yardsale app. Pretty much useless for selling anything and mainly just a user acquisition ploy.

I was actually pretty disappointed because I really care about how hard it is to post to Craigslist. I think that's a huge issue right now and will be for them going forward. As more people rely on smartphones as their primary computing device (and selling device for that matter---phone, sms, camera, email, etc.), there will be more opportunity to create something that takes casual sellers away (who are also buyers, wink). Obviously at niches at first, but it's going to be a serious weakness (if an 800lb gorilla can have a serious weakness). Call me crazy, but their complete disinterest in mobile (not Mobile, AL - http://mobile.craigslist.org) is IMO their Achilles heel.

Payments, reputation, spammers--I agree that none of that matters because it introduces way too much transaction friction (and annoying things like taxable income!)

What I do care about is that fact that in 2012, people try to sell their couch without a photo, when nearly everyone on an Internet-enabled smartphone has posted a picture to Facebook/Twitter/Instagram without even thinking twice about it. That's just weird.

samstave• 14 years ago

>The contact link in the Craigslist post goes to a sign-up form for the Yardsale app.

This was a tactic that AIRBnB used and they got some flak for it. CL doesn't like the middle-man approach.

I don't know though if AIRBnB got any C&D or other imperial entanglements due to this approach.

minouye2• 14 years ago

Yeah Craigslist definitely doesn't like that: http://news.ycombinator.com/item?id=3897379

jawns• 14 years ago

Okay, so Craigslist's big advantage over everybody else is its user base, right?

But at least in my experience, most people who use Craigslist wish that there were something better that had a large user base. They don't like the UI, they don't like how many scammers there are, etc. They tolerate Craigslist because that's where the results are, but they would be happy to jump ship if they could get those results elsewhere, but with more pros and fewer cons.

It seems like this would be a good case for "conditional commmitment."

Kickstarter is a great example of a service that allows conditional commitment. Here's the problem it solves: People are reluctant to donate to a cause unless they know there is enough other support to make the goal viable. Kickstarter lets them conditionally donate, and their donation is only collected once some threshold of total pledges have been reached. (Side note: A Kickstarter for politics would be a great way for a third-party candidate to make inroads, don't you think?)

In the case of a Craigslist alternative, perhaps one strategy would be to have people commit to a proposed new service -- on the condition that some threshold of other people also commit. Once the threshold is reached, boom, it's like Black Friday, with a line of people at the door waiting to rush in en masse.

stfu• 14 years ago

I would argue that Kickstarter in its current form is not as scaleable as Craigslist is. If they would follow an anything-goes policy as Craigslist does, the same problems would appear i.e. illegal content, scams, etc.

In regards to Kickstarter for politics: Might work better if these were bi-partisan "internetsy" themes, i.e. ACTA, SOPA. But the problem with politics is, that there might be not immediate results.

The "moneybombs" many candidates use to drive up cash in certain timeframes could be seen as somewhat similar to Kickstarter. They are often affiliated with a specific fund rising goal, some (made up) reason for the "bomb", and often even list contributor names and messages.

fumar• 14 years ago

I agree with you about the reaching a "threshold" of users. Creating a large base of returning users is difficult. I am interning for an indirect Craigslist competitor. (zealousgood.com) We help nonprofits get/receive in-kind donations. Instead, of putting up a free item on CL, one can pick a nonprofit to donate it to.

Many people view CL as a the simplest solution. It has the least resistance. Regardless of its cons, people continue to use the system.

jinushaun• 14 years ago

My friends and I had a startup idea in 2007 that competed with Craigslist. (I didn't follow through, but one of them is still in that space) I can't believe that five years later, no one has managed to push CL off the top. It was a bad user in 2007 and still bad now. Everyone I know tolerates CL. No one likes it. CL refuses to add new features that would improve the user experience and benefit customers.

genwin2• 14 years ago

I like CL as is. (I may be old fashioned. E.g. I still use Notepad for small lists, instead of logging in to some web app for that.)

pygorex• 14 years ago

Ditto on Notepad. For personal todo lists I just use a text editor. For collaborative todo lists I use a shared Google doc or Trello.

abruzzi2• 14 years ago

I love the UI on Craigslist. With the exception of housing, none of it would be improved by adding AJAX cruft. I also love that I've been able to sell and buy hundreds of items, and have never created an account and never given them much in the way of personally identifiable information.

yumraj• 14 years ago

I will have to agree with point #1. I don't care about the UI, period, the end.

I'm so used to typing sfbay.craigslist.org, and just search that I don't even think about it. Textual list works great for me for most part. If I'm interested, I send an email, get a response. Done!!

Why do people think that putting a lipstick on a pig will make it more appealing when all I want is some pork.

Regarding scammers: there will be scammers in every alternate, at least thats what I think. It is my job to do the due diligence and take care.

hyperbovine• 14 years ago

Totally agree. It's fast. It treats you like a human being and not a product. No ads. No Web 2-3-4.0 cruft.

Stop trying to fix what ain't broke.

genwin2• 14 years ago

But... if no cruft then how am I going to share that cool post I saw for an oven mitt for sale, with my 297 friends?

natural219• 14 years ago

I can't tell if you're being willfully ignorant or if you legitimately find Craigslist easy to use. I legitimately cannot think of a single example of where you would prefer to scroll through pages of links, reading each classified that might contain the item you're looking for, instead of using an a UI mechanism to filter and sort the searches.

Have you ever used Craiglist to rent an apartment or to buy a used car?

rhizome• 14 years ago

You can use minus-signs in the search box, FYI.

glesica2• 14 years ago

I just used Craigslist to find an apartment about 1.5 months ago. Based on my experience, I disagree with you. Sure, a slick interface would be cool, but it could very well change the nature of the site in a bad way.

I agree that it would be awesome to be able to filter listings on Craiglist through a neat-o UI mechanism ("Hipmunk for apartments maybe").

In fact, I basically spent the entire time I was using the site thinking "if only more landlords indicated whether the apartment is pet-friendly...". I ended up calling a ton of landlords just to find out whether they allowed pets, on the off chance that some of those who had listed no pet policy actually allowed them.

But is that really a UI problem? For me, Craigslist has already provided the UI tools I needed (you can search by pet-friendliness). The problem was that the landlords didn't include that information in their listings in the first place.

Craigslist is a site for "classified ads". Traditional classifieds (in newspapers) were usually very short, just a few words. Of course far more is possible with Craigslist, but a larger ad also requires more effort on the part of the seller.

As it is now, incomplete information has a cost for sellers (people skip their ads), but they can choose to bear that cost if they wish, presumably after comparing it against the cost of providing more complete information. Part of the reason people use Craigslist is that it is more or less a willy-nilly market that is friendly to small sellers.

So what would Craigslist have to do to make a new UI worthwhile (for me)? Enforce data completeness on the sellers. But that would turn people off. Requiring additional bookkeeping or punishing sellers for "incomplete" listings just to make a snappy UI practical would harm the community and the site.

cs7023• 14 years ago

I would be very skeptical of any startup trying to compete against Craigslist because, in addition to strong network effects, the latter has two difficult-to-replicate competitive advantages:

* Craigslist’s operating expenses are ridiculously low in relation to its huge size, allowing it to offer most services for free and still earn a profit. According to its public fact sheet, every month the site receives more than 50 million classified ads and serves more than 30 billion web pages.[1] Alexa ranks it as the ninth most-trafficked site in the US.[2] Yet somehow, the company manages to do this with just over 30 employees![1] On a per-year basis, that’s around 20 million classifieds per employee! Infrastructure costs are also very, very low in relation to traffic, as the site’s design, functionality, and interface are all ridiculously light and bare-bones.[3] No startup can match such ultra-low per-classified costs.

* While Craigstlist is technically a for-profit corporation, it operates as a non-profit organization,[1] so it is not seeking to maximize profits; instead, it is seeking only to be financially sustainable. Wealth-seeking entrepreneurs are at a huge disadvantage if they try to compete against a well-established entity that has both an ultra-low-cost advantage and no desire to acquire wealth over time.

In short, Craigslist possesses what Warren Buffett calls the “low-cost producer” advantage: it can offer a commodity service for less than anyone else.[4]

[1] http://www.craigslist.org/about/factsheet

[2] http://www.alexa.com/topsites/countries/US

[3] According to this 2011 presentation, Craiglist, the 9th most-traffic site in the US, is powered by only ~500 servers located in two data centers: http://www.slideshare.net/jzawodn/lessons-learned-migrating-...

[4] For example, read Buffett's description of GEICO’s competitive advantage in his 2000 letter to shareholders: http://www.berkshirehathaway.com/2000ar/2000letter.html

jeremymims• 14 years ago

Can we put this to rest once and for all? Craigslist is a for-profit company. From the fact sheet you've apparently cited without reading:

Q: Is craigslist a nonprofit? A: No, craigslist was incorporated as a for-profit in 1999.

cs7023• 14 years ago

jeremymims: technically you're right, but in practice Craigslist operates as a non-profit. From the same link:

Q: Why does craigslist still use a ".org" domain? A: It symbolizes the relatively non-commercial nature, public service mission, and non-corporate culture of craigslist.

I updated my comment to reflect this. Thank you for pointing it out!

joe_the_user• 14 years ago

Indeed,

Craigslist not only has a low-cost producer advantage, it serves a vast, vast market of people who only want to consume its commodified services at this nearly-zero cost. And who now expect such low-cost services to exist.

The article said: 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.

Lol. Yeah, that's what you'd have to do. Somehow stand between multi-billion-dollar river of buyers on craigslist and similar multi-billion-dollar river of sellers and somehow re-route the results. And that would cost unlimited amount of money once people figured out they could take couches from the dump and sell them to you!

suresk• 14 years ago

I guess I'm not sure why you'd want to try to compete with Craigslist directly. Besides the network effect, there is also the fact that Craigslist isn't really making that much money (at least compared to how much they could be).

This means that anything competing with it with a goal of making money is going to have an even harder time competing with CL, which is mostly free and completely free of advertising. Look at eBay, which arguably could have been improved on quite a bit and charged users fairly high fees - nobody (that I know of) ever managed to compete with them on a large scale in the auction space.

Like others have said, I think the value is in competing on very specific areas. A few that would be possible and profitable:

- Jobs/contract work. Given the technology we have, I think the internet has done a poor job of changing the way we find and apply for employment and short-term work. I've been working on some prototypes for tech-oriented job sites, and I think there are a lot of other industries that could benefit from smarter job sites. Plus, there is a considerable amount of money in this area.

- Housing, especially in places like SF and NYC.

- Local services.

Lower-end stuff like people selling used couches and Xbox 360 games is probably not an area worth getting into.

angryasian• 14 years ago

http://www.quora.com/Craigslist/Why-hasnt-another-product-di...

but the more important graphic is this one - http://s3.amazonaws.com/data.tumblr.com/tumblr_kwkfi5tqEi1qz...

ill leave this here.

devian• 14 years ago

The challenges to compete against Craigslist aren't unique to Craigslist. Startups that want to compete with any dominate product in the market pretty much have to face the same challenges. Ebay, Facebook, Google Search, etc. all share similar challenges, specifically solving the chicken-and-egg problem.

However, I do believe that competing with Craigslist might be a bit easier given that there is almost no innovation happening in the product. Craigslist hasn't changed much since I first used it 7 years ago. There is definitely an opportunity to disrupt Craigslist position and it's a matter of time.

Craigslist is in an amazing position right now and they have a lot of potential to really continue to dominate. Ultimately, Craigslist's demise will be through its own undoing of not actually trying to compete and innovate.

crazygringo6• 14 years ago

This post misses exactly half of the problem.

Amanda talks about Craigslist from the perspective of the seller (new sites have nobody to sell to).

What about the other half, the buyers? Same problem -- users on new sites have nobody to buy from.

The whole problem is the network effect. And the reason there aren't Craigslist killers is because it's insanely hard to overcome this. Your product may be 100x better, but sellers won't use it until tons of buyers do, and buyers won't use it until tons of sellers do. Craigslist didn't have this problem because it was basically the first decent online classifieds site. So now Craigslist can just sit there and not innovate.

This is why people are so upset with Craigslist, and why supposed Craisglist-killers are failing. (It makes normal product competition, like getting an app to be #1 in the iTunes store, look easy by comparison.)

saurik2• 14 years ago

When Craigslist started they had to overcome this problem. They even had to make the idea of using the Internet for a lot of these kinds of ads something anyone would even consider. If you look into the backstory, this took many years of bootstrapping at small scales before it really took off. Why should we be cheering anyone on who wants to just cheat their way into this space, piggybacking on all of that hard work and dedication building this market?

crazygringo6• 14 years ago

No, Craigslist didn't have to overcome this problem. They merely had to overcome the problem of building the market in the first place, which was much easier because nobody else on the Internet was obviously the "default" option.

Nowadays, any site that doesn't already have the same kind of buyer and seller populations that Craigslist does is at a complete and total disadvantage in competing, and the point is, it's virtually impossible to overcome that. Craig today would never get his foot in the door.

> Why should we be cheering anyone on who wants to just cheat their way into this space, piggybacking on all of that hard work and dedication building this market?

Because Craigslist's success is not due 100% to hard work and dedication. It's probably more like 10% hard work, and 90% being in the right place at the right time. So the question is, why should Craigslist be forever rewarded for dumb good luck, while competitors who work even harder to create better products are doomed to fail, because it's impossible for them to attract users while Craigslist sucks them all up, just because of its network lock-in effects?

I want to see Craigslist start to have to compete and innovate again, just like most other companies have to.

Estragon• 14 years ago

Actually, there may be a technical approach: do something like padmapper as a TOR service, and take payment in bitcoins. :-)

ajones05• 14 years ago

For anyone curious about craigslist marketshare and competitors, this is the best resource I've seen on the topic: http://www.quora.com/Craigslist/Why-hasnt-another-product-di...

In that discussion is reference to this graphic, which does a good job illustrating many of the would-be craigslist-crushers (although most go after niches rather than the whole pie): http://s3.amazonaws.com/data.tumblr.com/tumblr_kwkfi5tqEi1qz...

onlyup• 14 years ago

In Ireland, DoneDeal.ie and Adverts.ie have pretty much killed any Craigslist usage (although it was never that popular here even though I think most people would recognise the name)

JVIDEL• 14 years ago

You can have a much nicer UX, better code and extra features

But CL has both traffic and a well-known brand, investor money can't buy that.

Any feature you add is useless when there's no content, and there's no content because nobody goes to your site, and nobody goes because there's no content, see how it goes?

And of course CL knows better than letting you "borrow" their ads...

alextingle• 14 years ago

"Why do so many startups focused in the above four areas generally flounder?"

A "flounder" is a fish! She means "founder", which is a verb which roughly means "sink".

hobbes• 14 years ago

http://www.thefreedictionary.com/flounder http://en.wiktionary.org/wiki/flounder#Verb

(intransitive) To act clumsily or confused; to struggle or be flustered.

    "He gave a good speech, but floundered when audience
 members asked questions he could not answer well."

dodo53• 14 years ago

Flounder can be used as verb to mean to thrash around like a fish (e.g. struggling) - so either could work in context. http://public.wsu.edu/~brians/errors/flounder.html

mcovey• 14 years ago

http://carsabi.com/ also recently pulled craigslist results:

"June 12th: We no longer include vehicles from Craigslist, as they have requested that we not index their listings"

Too bad, it is a killer car shopping site, but without the massive craigslist db of results, they won't have nearly as much to offer.

Craigslist should really introduce a paid API or something, since they seem to hate being scraped. I think they fear becoming irrelevant.

pbhjpbhj• 14 years ago

That would be great, having a front end to upload and then having a choice of sites from which to consume the offers.

I wonder if someone hasn't got a site where you can submit on craigslist and use an addon to simultaneously submit to their site - basically letting the browser do a multicast of the data.

dw5ight• 14 years ago

yup. we got a cease and desist as well along with padmapper. we're trying to contact craigslist and see if there's a way to work with them. wish us luck!

A Stroll Through the Craigslist-Crusher Startup Graveyard

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