Death Is My Exit Strategy, Says Craig Newmark

“I am committed to customer service for the rest of my life. Death is my exit strategy,” said Craig Newmark, Craig’s List founder and chief conscience, at the New York Social Media Club ‘un-meeting’ last night at Fleishman Hillard in the old Daily News Building on 42nd street.

Newmark said he spends most of his time on customer service issues – sorting out disputes about postings mostly.  And he expects to do that, well, forever. The ‘exit strategy’ is a sly reference to the perennial question about Newmark cashing out, monetizing this cash cow, taking the big money to live like a Sultan of the Net.

Nothing altruistic, Newmark insisted, but it doesn’t “feel right” to sell Craigslist. Newmark has “nerd values.” The only thing he wanted was a garage. A native of New Jersey, he now lives in San Francisco and he has a garage. He’s comfortable. “I guess I could use another hummingbird feeder,” he said wistfully.

Feelings? Hummingbirds? No wonder Newmark confounds private equity dealmakers and investment bankers who play a parlor game on the market value of Craigslist. To Wall Street, Craigslist is run by a gang of socialists who heretically reject the basic human instincts of greed and venality. Craig’s List Meets The Capitalists New York Times DealBook story describes a craigslist presentation to investment bankers as “a culture clash of near-epic proportions.” The 12/06 story has 244 comments so far online and is still a great read.

[excerpt NYT] The Tech Trader Daily blog ponders this question: “If YouTube was worth $1.65 billion, who knows what Craigslist would be worth if Jim and [site founder] Craig Newmark ever considred becoming — what’s the word? — capitalists.”

Following the meeting, Mr. Schachter wrote a research note, flagged by Tech Trader Daily, which suggests that he still doesn’t quite get the concept of serving customers first, and worrying about revenues later, if at all (and nevermind profits). Craigslist, the analyst wrote, “does not fully monetize its traffic or services.”

Newmark spoke about surviving this awful administration, and finding and supporting the voices of change. Martin Luther, Thomas Paine, and John Locke were great bloggers who effected change – where are the voices to “speak truth to power” about “politicians who are ripping us off.”  He’s looking into micro finance through the Net. Yes, there might be some social media tools integrated into Craiglist in the future but nothing radical. They experimented with a re-design of the famous spare homepage that has resisted re-design for 12 years, and they decided on no changes. “Our web design is to be fast,” he said. “Users did not care about a re-design.”

After Newmark spoke the ‘un-meeting’ broke into loose groups, under direction of New York Social Media Club coordinator Howard Greenstein. I was in the social entrepreneurship group. We had 20 minutes but probably could have used three times that to adequately define social entrepreneurship. Howard batted an idea around about ‘blogger mentors’ that sounded ridiculous at first. If you need a mentor to blog you shouldn’t be blogging, I thought. But maybe it’s a good idea. There were account execs there from Rubenstein and Fleishman and probably other agencies. I am sure they struggle with blog issues: starting, choosing topics, motivating, gaining acceptance and support. Finding your voice is a whole other matter. Serious bloggers struggle the same as journalists, writers, and researchers. We have that in common. You can’t adequately counsel clients on PR ‘new media’ unless you are personally mucking around in it. I hope that some of these ideas get hashed out and put into action through future New York Social Media Club confabs.

Comments

  1. Delia says:

    Hi Mark!

    I’m just wondering what you thought of Craig’s answer to the would-you-ever-sell question from the audience: “*Right now*… [my emphasis] we are just not interested in selling…”

    Delia

    P.S. oh…and the cash cow is already monetized to the tune of 50-70 mills in estimated profits (while customer service continues to be severely understaffed…) D.

  2. Mark Rose says:

    Delia:

    I guess Craig is living comfortably. The really shrewd strategy would be to hold on to it until it commands an incredibly fat premium and then take it public (Google), or more likely, sell private (Google buying YouTube). The burden of being that fatly capitalized must be tremendous. Craig seems to be committed to having fun and serving the people along the way. If he ever did meet with Meg Whitman, as he mentioned, eBay might make an offer he couldn’t refuse.

    Mark

  3. Delia says:

    Mark,

    There would have been no problem whatsoever with “living comfortably” — however comfortably he could legally manage — would he had been upfront about wanting to make money… would he had not asked for and accepted loads of community help for a very long time before turning for profit ostensibly “to pay the bills”…

    There is a big burden on the community that made craigslist what it is and has to make do with rudimentary customer service and very few improvements… because Craig/craigslist keeps talking the grand talk and quietly pocketing the money… instead of spending it on custumer service and improvements (which would have happened if he wouldn’t have turned for profit).

    The *really* “shrewd strategy” would be … to do exactly what he appears to try to do: maximize profits in the long run and milk craigslist for as much as he can at the moment… (while keeping long term profits in mind: plenty of things that could bring money in now, would be a bad idea in the long run).

    It’s just that… people are bound to wake up at some point and serious competition is staring to show up. So… yeah… I think he may well end-up selling, although he’s been saying no, no, no… hell no! for a very long time…

    Delia

    P.S. anyways, at least you find it conceivable that although he’s been pretty much swearing he would never do it, he might in fact sell… meaning you are NOT a groupie, like some many of those writing about Craig/craigslist appear to be… take care!:) D.

  4. Mark Rose says:

    Delia:

    As Michael Corleone said, everybody’s got their price. The Bancroft family of Dow Jones is going to meet Rupert Murdoch this week on a buyout offer. Dig that combo. I can’t for a minute believe that Craig or anybody in a position to profit at craigslist is not keenly aware of their value and how they might capitalize on it. They play a good PR game.

    Mark

  5. Delia says:

    Mark, I agree… but I’m afraid this goes *way* beyond PR — it has deceit written all over it! D.

  6. Mark Rose says:

    Delia:

    Unfortunately, deceit and a good PR game are often synonymous. Craig said “Nothing altruisitic but selling doesn’t feel right now.” He’s not lying. Selling may feel better when the price is higher. The best exit strategy may be the denial of an exit strategy – that’s a PR game. Amazon solicited the greater community out there and co-opted free content with user-generated reviews to build community (different business model, I know). I checked out your blog – ‘craigslist criticism.’ Is your interest personal or professional? Are you affiliated with any group that has issues with craigslist? Who are the craigslist competitors you refer to?

    Mark

  7. Delia says:

    Mark,

    Sorry about the delay… (was away for the day). I disagree (re: deceit and a good PR game are often synonymous): there may be a fine line, but there is always a line.

    If you are really interested in this, I suggest you take a look at his prior claims on the issue: he has repeatedly said for a long long time that he is not going to sell. He has asked for and accepted the community’s help: people have helped *because* of that — he is still getting free work based on that claim to this day.

    I’m not familiar with the details in the case of Amazon but if they would have made anywhere in the range of claims Craig/craigslist has made, I think we would have heard about it. As far as I’m aware, Craigslist is a very special case as far as its history, claims and benefits derived from those claims. If Craig ends-up selling, I believe there would be enough evidence of fraud, for instance.

    Delia

    P.S. re: competitors; the way I see it, the centralized model for classifieds is breaking down (this model is what made craigslist a success): the new winners will be those who make best use of technology and *really* help their customers (craigslist does neither, it spends as little as it can get away with on customer service and improvements and appears to have no intention to change).

    P.P. S. As to my blog, it’s simply a chance put down what I’m seeing and, no, I’m not affiliated with any groups. D.

  8. Mark Rose says:

    Delia:

    Thanks. I’ll do some investigating.

    M

  9. Delia says:

    you are welcome! take care! D.

  10. Albnyc says:

    zzzzzzzzzzzz

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