EXECUTIVE SNAPSHOT
Who: Jim Buckmaster, CEO, Craigslist.
Education: He earned an undergraduate degree from Virginia Tech and studied medicine and classics at the University of Michigan.
What you may not know: He got his job at Craigslist by posting his resume on the site and catching the eye of founder Craig Newmark.
Kai Ryssdal: Jim Buckmaster, welcome to the program.
Jim Buckmaster: Thanks for having me.
Ryssdal: We don’t really have to do this on this segment but I’m thinking that since Craigslist is sort of an unusual company as companies in this country go, it would be helpful if you’d define what exactly it is you do for us.
Buckmaster: Well, I guess it’s general Internet, classifieds across all the areas people think of when they think of classifieds, employment, housing, buying and selling stuff, personals and romance. It’s organized by geographic areas so there tends to be one for your local city wherever you may be in the U.S. and Canada certainly, and increasingly we have sites internationally. So it’s a site for people to interact locally and get basic stuff done.
Ryssdal: Interact in a commerce sense right? I mean, you’re buying and selling stuff, you’re renting things.
Buckmaster: Sure, and unlike the typical Internet site, just about every function on Craigslist, if you’re successful in your transaction, is going to involve you meeting the other person in person; whether it’s for a job interview, or to look at an apartment, or to buy a used sofa or to go out on a date.
Ryssdal: Do you find that connection aspect of it to be important?
Buckmaster: Yes I think so, I mean I think that’s kind of what defines the site and sets it apart form most others and interestingly many of the reports we hear of people ending up married, it’s not through the personals but rather through that used sofa ad or going to look at that apartment. You know, people end up meeting in person and once you’re meeting in person, the sky is the limit.
Ryssdal: You’ve got this dot-org address but you’re not really a nonprofit.
Buckmaster: That’s true. We were briefly organized as a nonprofit years ago. We’ve kept the dot-org Internet address as kind of a symbol of our way of doing business or our philosophy if you will where we are trying to maximize social good rather than revenues or profits.
Ryssdal: Why try to maximize that social good instead of profits? I mean, you’re a company. You’re a money-making institution.
Buckmaster: Well, for one thing, it’s more fun to us to do it that way. I should say that we do have a healthy business and have had for many years now. It’s important for us to stay in the black since we don’t want to borrow money or sell stock to the public. But beyond having a healthy business, it’s not important to us to maximize those financial metrics, it’s a lot more fun to try to make the site as useful as possible for as many people as want or need it.
Ryssdal: Let me take advantage of you actually being in the studio here; I’m going to go to the computer that we have and I’m going to go to Craigslist. I’ll go to Craigslist, Los Angeles, which is right there. And I’m actually going to search for something that I need which is a backyard play set for the kids, right? So . . . we’ll see what comes up.
Buckmaster: Depending on what part of L.A. area you are in, you can focus down to closer sub-regions.
Ryssdal: Right. Exactly, and here it goes . . . I’m in the San Gabriel Valley and I’m doing a search . . . and I guess the point is that what you get when you do this search and once you get (I’m not finding what I need because I’ve got big kids so they need a big play set), on that page you get a whole list full of results, you don’t get what you’d expect to see on almost every web-page out there selling stuff, which is a banner ad of some type. How do you make money?
Buckmaster: We do charge for employment ads on 10 cities now including Los Angeles. The one other thing we charge for now is broker department rentals in New York City, everything else is free. And as you say, we don’t carry banner ads or text ads or any of that.
Ryssdal: How important is remaining ad free to your business model?
Buckmaster: The way we look at it is our users aren’t asking us to put banner ads or text ads on the site, so we don’t consider putting them there. That’s kind of the way we make all of our decisions.
Ryssdal: Based on what the users want.
Buckmaster: Yes. Certainly we are approached from time to time and it’s explained to us the massive amount of revenue that would come should we put text ads and banner ads on the site, but the simple reality is that users aren’t asking for it so we don’t consider putting them there.
Ryssdal: Do you find people who you interact with in your professional life . . . business consultants, and other CEO’s and who knows who else you talk to . . . do they just kind of shake their heads when you say, “massive revenue opportunity but we’re just not interested.”
Buckmaster: Certainly there’s been a lot of head shaking. If you go back to the Internet, the original Internet or dot com boom and bust going back to 98, 99 . . . people were very skeptical of..we were a company who at any time could have gone public or sold ourselves to someone else, or the thousands of Internet companies that were started for the purpose of making a killing, they shook their heads at our approach. And the ironic thing is virtually every one of those businesses that was founded on the Internet to make money went bust without making a nickel and we’ve just kind of chugged along and been profitable even though we never really set out to make money.
Ryssdal: So if you are not out there making money, what do you do every day?
Buckmaster: Well, believe it or not, there are actually a lot of . . . there is a lot of work that needs to be done. Our traffic now is at 10 billion page views per month, from tens of millions of users each month and the site is still growing at close to a 100% rate such that that actually creates a lot of work, especially for our tech team. And from my perspective as the company grows and certainly full-featured classifieds where tens of millions of people are posting and meeting in person, obviously all sorts of things, a few of them bad happened on the site, so we have our hands full also trying to minimize misuse of the site. That’s probably job number one at this point.
Ryssdal: Let’s talk about that for just a second because both you and the founder Craig Newmark have said that you’re invested in this enterprise as a social good, and yet lots of yucky things happen on Craigslist. Lots of yucky things happen all over the Internet, some of them on Craigslist whether through malfeasance or criminality or what have you. What’s your obligation to keep this a safe place and help the law enforcement authorities do that?
Buckmaster: Sure. Yeah the amount of misuse of the site is small on a percentage basis, but given the massive usage of the site, it adds up even when you’re talking about a tiny percentage, and certainly we see it as our responsibility to hold misuse of the site as an absolute minimum. We do that through a variety of means in terms of blocking and screening: trying to prevent inappropriate ads from reaching the site. and the next line of defense . . . our users are empowered through our flagging system to vote to remove any listing on the site; and they do so to the tune of several million ads per month. And beyond those lines of defense, certainly we provide as full cooperation with law enforcement as possible, in as rapid a fashion as possible.
Ryssdal: Do you worry ever that you’re naive in assuming the good nature of man participating in this site?
Buckmaster: Well certainly one of the lessons that we’ve learned, and it’s been kind of reassuring is the vast majority of people are well-intentioned and are on the site for legitimate purposes. There is a small number that are a challenge, both to us and to our users and obviously to law enforcement, but I think working together, we are certainly making progress on that and we hope to obviously make further progress in the future.
Ryssdal: There are all kinds of CEO’s out there of really big companies who never got an MBA, or started as an elevator operator or what have you. You might quite possibly be the most unusual, at least in this series. You were in Med school for awhile, and then you studied Classics. Why are you running this company?
Buckmaster: Well, it is a little unusual. After studying medicine and classics, I started working at various jobs to pay off or pay down student loans, and eventually kind of backed into computer programming. Self taught at a data archive attached to the University of Michigan. And I happened to be at the right place at the right time when an opportunity arose to convert old-school operations for this massive data archive that involved shipping out eight-track or I should say reel-to-reel data tapes and convert that into a web interface. That was really a huge-scale project at the time; literally a multiple terabyte archive converting the operation of that from sending out tapes in the mail to a completely web-based operation. So that kind of positioned me to come out to Silicon Valley and work at a series of companies out here before eventually arriving at Craigslist right at the start of 2000.
Ryssdal: Is it true that you actually got the job at Craigslist, your first job by posting your resume on line or something?
Buckmaster: I did, indeed, in fact I put my resume on Craigslist itself. Craig happened to see it there and invited me in for an interview which took place on his living room sofa since the company was still operating out of his San Francisco flat.
Ryssdal: There are what, twenty five people plus or minus at Craigslist?
Buckmaster: Yeah, we have twenty five employees.
Ryssdal: How does it run? Do you guys all sit around the living room and say, “hey let’s open up in Buenos Aires today and let’s do this new kind of ad?
Buckmaster: We do have our own office now. It’s a converted Victorian-era house in central San Francisco where the twenty five of us work. About two-thirds of our staff are tech and most of the rest are customer service. As far as starting new Craigslist sites . . . like just about everything we do that’s based on the requests that we get, that remains our number one type of request is to set up Craigslist sites where we don’t yet have one. And periodically, as we are about to do now, we add more cities according to which ones are being requested the most and we’ll probably add another 120 shortly.
Ryssdal: What is your criteria other than a whole bunch of people asking for a city?
Buckmaster: That basically is the criteria.
Ryssdal: That’s it?
Buckmaster: Yeah. Like a lot of stuff we do, we’ve found it to be very effective and basically fool-proof to just prioritize our activities according to what users are asking for.
Ryssdal: Seems bizarre in this economy to be so democratic.
Buckmaster: Well, it certainly makes our lives simpler since we just have the one criterion to go on. We don’t have to sit in rooms trying to figure out how to conquer the world because basically we are not trying to achieve any particular market share or world dominance. We’re just trying to follow up on requests that we get from users.
Ryssdal: And yet you have enormous market share and very nearly world dominance.
Buckmaster: Well I guess irony is . . . well I think maybe it’s not ironic in way that . . . what better way to operate is there than to just follow up on what your customers or users are asking for and to just block out everything else, you know, everyone else who is asking for your time? Much of it just takes away from what you should be doing, which namely, is trying to please your users and customers and, I guess the general public.
Ryssdal: And make a buck or two, right?
Buckmaster: It is important for us to make money because we don’t want to have to borrow or sell ourselves.
Ryssdal: Is there a circumstance under which you could conceive of changing this business model?
Buckmaster: Not that I could really conceive. I mean, it works well for us now. If circumstances change dramatically than we would try to adapt to that and certainly the way we would adapt to it would be to listen to our users in how they suggest we adapt and that’s the way we would adapt.
Ryssdal: If we went to the newspaper industry and asked them what they thought of Craigslist and they would probably respond with something that you can’t say on a public radio program. What do you say to criticism that Craigslist gets that it’s taken the life out of the newspaper industry by cutting so sharply into classified ad sales?
Buckmaster: Well certainly we’re . . . you know Internet classifieds in general and Craigslist in particular are one of the array of challenges that newspapers face. Another one I would call out is the declining circulation since the 70’s experienced by many newspapers. As far as the financial struggles that some newspapers have had, a cursery glance of it, I notice that a lot of those, or there aren’t that many of them, but the publicly traded newspaper chains seem a lot of them to be carrying an enormous debt load left over from M & A activity. To my eye, that is as much an explanation for any financial woes as certainly challenges posed by the Internet.
Ryssdal: Who is your competition then?
Buckmaster: Believe it or not, we don’t really think in terms of competition. In our eyes, at least we’re trying to perform a public service here such that other companies to us don’t appear as competitors. Classifieds is an enormous space in any event with thousands of companies offering service both online and off. And basically we just don’t have time to worry about what other companies are doing. And worrying about what other companies are doing would just take away from focusing on what users are asking for in any event.
Ryssdal: I have to ask you about E-bay then. It owns 25% of Craigslist; it got it from a former principle in your company. They have said they want to start their own service to compete with you guys which seems a little bit oxymoronic in the first place; but don’t you worry about them?
Buckmaster: Not really. Obviously they did acquire a stake a few years ago, but again, it’s just another company that’s operating in the classifieds sphere. And to us that’s not something that we really should be worrying about. We should be focusing on what users are asking for from us.
Ryssdal: Whether or not you choose to use the size that you have and the 10 billion page per views per month that you have, to make substantial profit, you and the founder of this company, Craig Newmark, have outsized the influence just because of how big this organization is on the Internet. What do you intend to use that influence for?
Buckmaster: Well I think our primary influence is just through the operation of the site. Providing free classified ads to people to use to fulfill . . . to get every day stuff done. I mean, we literally get e-mails from people who have found their spouse, and their job, and the place they are living, and their furnishings, and their car or bicycle, and a lot of their friends. In other words, they basically have assembled their entire lives off of Craigslist, all for free. To us, that’s a pretty broad calling and if we’re just able to accomplish that and offer that kind of service to anyone who wants or needs it, to us, that’s a broad calling and we don’t feel the need to find some other activity to engage in as far as the site is concerned.
Ryssdal: What were you expecting when you took this job?
Buckmaster: I started as a programmer at Craigslist. Basically for the first year there I was mostly concerned with programming tasks: so adding a search engine to the site, it didn’t have one before; setting up the service to run on multiple machines, when I started it was running on a single PC; branching the site out beyond San Francisco; transitioning it from a point where staff had to review and post each ad and make any edits or remove it on behalf of the user to the current system, you know, fully self-service; writing discussion board forum codes so that our discussion forums could run. So, a whole bunch of tech projects. My expectation was to start at a company that I really admired and was different from every other company I saw out there and to get to do a bunch of interesting tech projects. So that was my initial expectation.
Ryssdal: So you go to this site and you type in your search and you get just the raw data. You get the answers you’re looking for. You don’t have what you’d expect to see, ads all over the place. Would a simple banner ad kill you?
Buckmaster: Well it wouldn’t kill us and certainly it has been pointed out to us the enormous amount of money we could make by putting banner ads and also text ads on the site, but the reality is our users aren’t asking us for banner ads and text ads so it really doesn’t come under serious consideration. And certainly from our standpoint, just using other sites, we kind of find banner ads annoying. Especially the ones that appear on top of what you are trying to read or come sliding in from the side or above. In any event, we didn’t want to add anything to our site that we find annoying on other sites. And largely speaking, advertisements fall into that annoying category.
Ryssdal: Five years from now, if we sat you down again and had this conversation, would the company be any different than it is today?
Buckmaster: Well I think you’d see a lot more of the same. There would be a lot more of Craigslist sites, a lot more users, more traffic, more categories, more postings, more incremental features that people are asking for, hopefully fewer bugs and greater progress towards keeping bad stuff off the site. There probably would be . . . five years, that’s a lot of time in Internet years. I’m sure there will be some things that I can’t conceive right now on the site, but the nature of those is I can’t conceive them so I’m not sure what they are.
Ryssdal: When you and the founder Craig Newmark, eventually fade out into wherever old computer programmers go, are you worried about what’s going to happen to this company?
Buckmaster: Well, they’re working on these technologies where you can upload your consciousness onto silican or some other medium and . . .
Ryssdal: Well, barring the singularity there, what are you worried about?
Buckmaster: Ruling out post-singularity technologies, I don’t know. It’s hard to conceive of doing something else. This is easily the funnest job I’ve ever had. So Craigslist is kind of user generated content in the form of classified ads. I’ve always kind of wondered about if we could somehow manage to create user generated governance. In our view, we’ve had a failing, particularly at the national level in terms of our politics. And if there were a way to enable the citizenry to govern themselves through an Internet site, that seems like a neat opportunity to me.
Ryssdal: So then would you sell ads?
Buckmaster: If we were able to make it such that the American people could govern themselves through a site without the need for a centralized government, we would consider any available means to fund that, because I think that would be worth funding by any means possible.
Ryssdal: Jim Buckmaster is the CEO of Craigslist. Jim, thanks a lot for your time.
Buckmaster: Thanks a lot for having me. It was fun.
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