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December 12, 2006

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Craigslist Among the Capitalists

This DealBook entry on Craigslist CEO Jim Buckmaster’s presentation at a media conference in New York is really fun:

Wendy Davis of MediaPost describes the presentation as a “a culture clash of near-epic proportions.” She recounts how UBS analyst Ben Schachter wanted to know how Craigslist plans to maximize revenue. It doesn’t, Mr. Buckmaster replied (perhaps wondering how Mr. Schachter could possibly not already know this). “That definitely is not part of the equation,” he said, according to MediaPost. “It’s not part of the goal.”

It’s amazing how the decision not to maximize profit has become Craigslist’s unbeatable competitive advantage. It is the one move other companies can’t copy.

The post really struck a chord; the conversation that follows is the longest I’ve ever seen on DealBook, by far.

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Posted December 12, 2006 at 12:31 | Comments (3) | Permasnark
File under: Briefly Noted, Media Galaxy

Comments

It's amazing how the decision not to maximize profit has become Craigslist's unbeatable competitive advantage. It is the one move other companies can't copy.

Actually, this has always struck me as the intuitively obvious competitive advantage if you can simultaneously work out a means for investing in future efficiency. And it is an option not available to public companies--or atleast public companies without special two-tier stock riders on the equity, like our Media favorites the NYT, the WaPo, & Google. I guarantee that all over our fine land plenty of for-profit mom-and-pop shops optimize for other things--family sustainability, community health, personal enjoyment--rather than optimizing for profit.

One of my favorite comments in the thread (by "John"):

Craigslist is hardly communist: just think of all the transactions it has enabled! By removing the profit margin of the intermediary, Craigslist has expanded the number of participants in the market and increased the relative power of the individual. Milton Friedman would be proud.

Great eye, Tim. He's right: People so often conflate capitalism with free-marketism -- or worse, use sensible free-marketism as a Trojan Horse for out-of-control capitaism.

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