Craigslist: Craig Newmark — The Forrest Gump of the Internet

0:11 I figured I'd start a very simple mailing list. Where maybe uh I would tell ten to twelve people about stuff going on. And it kept spreading word of mouth. More stuff started.

0:24 I said. Hey apartments are getting harder to find. So people can send me that. Other people wanted me to put job postings on there. So I do

0:35 In the middle of ninety five. at about two hundred forty addresses. The C C List. Broke. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

1:02 they built. Guy Raz and on the show today. How Craig Newmark's email list turned into one of the most popular online classified ad sites in the world. Frags list.

1:25 Okay, imagine pitching investors on a startup. You tell them that it's an internet marketplace, but you're not gonna worry about design. The site won't look all that good. Oh, and you won't spend a dime on marketing or sales. And the founder? He doesn't even want to run the company. He just wants to do customer service. Sounds like a pretty disastrous pitch, right? You would be laughed out of the room.

1:51 And yet every single one of those things is true about Craigslist. And its accidental founder, Craig Newmark. By the way, that pitch scenario It never happened because Craig didn't want investors in the first place. He never set out to build a business.

2:09 He even admits that he was in the right place at the right time. The place was San Francisco, and the time was 1995, and the internet was just beginning to take off. Craig was a somewhat awkward forty two year old computer programmer. He struggled to fit in most places, but in San Francisco In the mid nineties?

2:31 He found his people. the kinds of people who were gathering at informal tech meetups around the city. And at those meetups, you didn't have to be a good dresser or popular or funny. You just had to have ideas to share. And Craig saw a need.

2:49 Maybe other people would want to know about these meetups as well. So he solved this challenge in the simplest way possible. by creating an email list. But that list grew so fast that Craig decided to build a website. And he called it

3:03 Craigslist dot org. And soon, people wanted to post jobs and apartments and cars for sale as well. The design was about as basic and straightforward as it gets, and it still looks pretty much the same today, nearly thirty years later. But here's what makes the story even more unusual.

3:24 Craig knew from the beginning that he wasn't a CEO type. So just a year after incorporating He stepped back. He handed control to a guy named Jim Buckmaster. And that turned out to be a brilliant decision. By two thousand six

3:39 Craigslist had spread to 190 cities in 35 countries. Ten million people were visiting every month. All with fewer than fifty employees. Even today, with competition from Facebook Marketplace and others. Craigslist still brings in hundreds of millions of dollars a year.

3:59 In twenty twenty four alone. Analysts estimated around three hundred million dollars in revenue. Yeah. Now over the years Craigslist has faced Plenty of criticism. Some blame it for the decline of classified ads in newspapers, and we'll talk about that in the interview.

4:14 But Craig himself He says he never meant to get rich, though of course he did. And now he's committed to giving almost all of it away. Craig Newmark grew up in Morristown, New Jersey. His mom was an accountant and his dad, who was a salesman. Died when Craig was just thirteen.

4:33 Academically, Craig thrived, but socially He struggled. And in the years that followed his dad's death, Craig noticed something about himself. A pattern he still wrestles with today.

4:45 As a kid in grammar school, I remember having friends. But something happened as I became an early teenager. Because I was academically bright. And I would be the kid eager to show off in class. And I lack the ability to uh

5:04 So I didn't know what a nerd I was being. And by the time I w hit high school I was pretty well isolated. I had a few friends.

5:16 Also nerdish. And we had a science and engineering and sometimes high school debate in common. I wore thick uh black glasses taped together. Seriously?

5:30 I wore a plastic pocket protector. And I had no idea. How off putting that kind of stuff was. To uh everyone around me. No, Craig, anyone over the age of let's say fifty or forty five remembers

5:46 when they were children they were always Kids may be us too. who were different or or or awkward or weird and Today it it's different, right? I mean, uh kids get all kinds of support, but when you were a kid in the fifties and sixties, There was no n nobody was saying, oh, he has a social anxiety disorder, or he has he has challenges with social skills, right? Nobody

6:12 Saw it that way. Right. It's hard to say how people perceive things but I wasn't a good public school system in Morrison. They did send me to the school psychiatrist and They decided that I might be salvageable.

6:28 And so they got me some help. And I guess uh I turned out to be salvageable. But I have very little understanding how that happened. I mean clearly You have enough

6:40 sort of self awareness. To know that This is something that was a challenge. I'm curious at a certain point because I'm sure you've been to therapists and psychologists and maybe even psychiatrists. Were you ever diagnosed on on the spectrum or did anybody ever talk to you about that at all?

6:58 The only formal intervention I had Was Well it was during uh sixth grade. When they did send me uh For regular sessions.

7:08 Nothing beyond that. And I assumed That I was on the spectrum Asperger's. For some years until I chatted with a neighbor.

7:20 She told me Not on the spectrum. I was just poorly socialized and needed to work on that. And now as needed, I can fake social skills for as much as ninety minutes at a time.

7:37 Wow. All right. Well that's I mean it's really it's just fascinating because I think the fact that you recognize this And you knew it. And you wanted to change it is really interesting, right? I mean it was it it sounds like You

7:52 As far as you can remember, this is a frustration of yours that you couldn't I don't know, be one of the guys or Or blend in. Mm. It was a problem for me, continues to be a problem for me.

8:05 I've made peace with my issues, and And try to channel them into constructive stuff. I was one of those kids, though, that Loved being in a library. And to uh their credit.

8:19 Moristown, New Jersey has a great Alt library. I hung out in young adults. Finding whatever science fiction I could find. So you really found solace.

8:32 And books in science fiction. Like that's where you kind of Escaped too. I did escape into it. On the uh upside though.

8:43 Reading science fiction. by a technologists, engineers, and so on. That's how we learn. To invent the future. Sometimes it's delusional, sometimes it's real.

8:56 It's all a real mixed bag. So when you were growing up in Morristown, New Jersey, this is the fifties as a kid or sixties as a teen. There were a lot from from what I've read about you. There were a lot of Holocaust survivors who lived in your area, some of whom taught at your

9:15 Sunday school, your synagogue, is that right? That made it visible. Uh the the mother of one of my classmates had her uh serial number

9:27 Quite visible. Mm-hmm. And uh she did explain what that was about. Without getting gruesome about it. So I was very aware of uh the situation.

9:41 Only a few years ago. Did the folks at the Ford A prominent Jewish newspaper. They actually dug into uh The past.

9:53 of my principal uh Sunday school teachers Mr and Mrs. Levin. And they found that Mr. Levin was a survivor. Uh the relatively easy way. He left out of a speeding train, but

10:08 On his way to a death camp. Injured himself. But he wound up rescuing his wife and daughter. And uh

10:17 Maybe this is why he had such a big uh influence on me. But he never talked about that. Yeah. I'm pretty sure he never talked about it. He had a uh injured finger.

10:29 Bent at a bad angle. Never explained it. He just encouraged me to be a really good uh student. But uh

10:38 He and Mrs. Levin taught me uh the the uh The big stuff. That's I should treat people like I want to be treated. I should know when enough is enough.

10:50 And I should really take the ninth commandment. About uh not lying. about bearing a true witness. I should take all that seriously. And that determined my moral compass.

11:03 To this day. Alright, so after high school, uh you went to Case Western Reserve University in Cleveland and you studied computer science and this is in the early seventies,'cause you graduate in I think nineteen seventy five, I I think. So so computer science very different then than it than what it is now. I read that you wanted to study and I was blown away by this, large language models in the early seventies. I didn't even know We you think of L Ms today and and AI, right? You think of generative AI. I didn't even know that that was something you could study in the early seventies. They didn't use the term large language models.

11:39 I was influenced by the people looking at neural networks. Mm. Which are the basis of large language models. The deal is I got real interested in that. I got interested in the idea of natural language processing.

11:54 Thinking that was uh core. to understanding consciousness. Because I had been very influenced by By uh a lot of science fiction. But the idea is that I was studying this in seventy three

12:08 I remember back then taking an AI course Writing a theorem prover. In a language call this. I don't recall what a theorem prover is anymore. And

12:21 All I remember about Lisp. Is that it stands for Lots of irritating Stupid parentheses. Which is what you see when you look at Lisp code.

12:32 Okay. You graduate. Um from Case Western And like a good computer science graduate and responsible young man In the mid seventies.

12:46 You go and work for one of the biggest companies in the world, IBM. Uh, and and you I think initially you're in Boca Raton for some time, you're in Detroit for for part of the time. What were you doing for IBM? Yeah. Well Uh in b IBM Boka Raton.

13:02 Which was not very fancy at that point. I went to work on a forgotten mini computer. Called the series one. Yeah. I did some good work there, did some good software development.

13:15 But the uh You know. It was never taken really seriously by the whole uh industry. The only thing I did which I thought was was really good was

13:27 was I was a core member of the team Building a series one. As a card. That would fit inside of a PC. My big mistake was not getting more and more involved.

13:40 With uh the PC back then. But uh I got a good education. I made the right mistakes.

13:48 And uh it's worked for me. Yeah, and you somehow end up moving to San Francisco in the early nineties. Tell me W was it I'm assuming it was for a job? Well

14:02 Seventeen years at IBM. A Bokaraton, Detroit. You were in Pittsburgh. But I got tired of the East Coast. Uh so I wanted a change. I checked out Seattle. In San Francisco.

14:17 Interviewed with a number of companies like Charles Schwab. And the folks at Charles Schwab made me a good offer. They uh moved me out to San Francisco. I did some good work there.

14:30 But my best work was volunteer. I was one of a few people Evangelizing the internet. At Charles Schwab. Ninety four.

14:41 I was one of three people saying This is how we're gonna do business. Alright, you get to Charles Schwab and this is also coincides with the beginning of what we now know as the internet'cause the world wide web, basically. Mosaic browsers, Netscape browsers are kind of floating around, and people start to use it. You're in San Francisco, which is going to become You know.

15:04 The most important tech city in the world. And you're a Charles Schwab where it's still probably a lot of uh m paper memos and file cabinets and you know manila envelopes and you're seeing this internet thing and you're Getting excited about it. Tell me what was exciting about it. To you.

15:23 Well The internet realized the vision that I had read about for decades. In science fiction. I had used the early internet.

15:32 They are bananas. At college. And I kind of got it. And I was in San Francisco.

15:40 Right time, right place. I evangelize the internet at Charles Schwab. I would go around teaching uh brown bag luncheons. I would show people use net. I would show myself logging in. Usually with a uh

15:56 Dial up modem. Mm-hmm. I guess by Being prepared. through science fiction and so on. When I saw it, I got it.

16:06 Um and The folks at Schwab. Started getting it. Pretty early. Mm.

16:14 San Francisco working at Schwab, getting excited about the internet. Tell me w were you using it for? I mean, were you using it for fun stuff to learn about What was going on? Like what was nineteen ninety three, ninety four, what was the the typical way you would use the internet? I used it.

16:33 To find people of like mind. who were doing stuff that I might enjoy a lot. I went to the Virtual reality special interest group. That was at the old exploratorium.

16:46 And through that group I learned about something called the Anon Salon. Which was a fundraiser monthly for Climate Theater. And from there I learned about Joe's digital diner. Where People set around eating spaghetti and meatballs.

17:03 But other people shut off. early multimedia technology. And uh That's what the kind of community that I'd look for. It sounds like for the first time in your life, right? Now you're in your late thirties, early forties.

17:20 You finally found a group of people Who are like you? Yeah. Yeah, I found people of a like mind. Met amore them?

17:29 I was still not real well socialized. But I was beginning to change. And I got a lot of help from folks. And uh that changed me in really good ways. Um all right, so you're in San Francisco, you're going to these meetups.

17:47 where people are talking about multimedia technology, people are having conversations about where the f future of the internet and you know Now looking back on it, thirty years later, I mean these are And just imagine how how these conversations were going, people were just talking about w the possibilities and there was a lot of optimism and excitement. And I guess

18:06 around this time, so like the m ninety five, ninety six. You started to send an email to a small group of people, like three, four people. about what? Like tell an email saying, Hey, this is going on or that's going on? Uh that's the gist. I would hear about events usually involving arts and technology.

18:29 Like Joe's digital guy. Like the Anon Salon. And uh I figured I'd start a very simple mailing list. Where maybe uh I would tell ten to twelve people about stuff going on.

18:42 They told me about more? And I shared that. And through word of mouth, more people asked me. To uh Put them on the C C list.

18:52 C and C C obviously carbon copy so you're just carbon copying a bunch of people. and sending out a list every what presumably every week to hey here's what's gotta going on this week. that I know about. Uh that's it. And it this was early ninety five.

19:08 After leaving Schwab. Did you leave Schwab or were you laid off or what? I I was downsized. To use the terminology of the time. And I was lucky.

19:19 Because Beginning of ninety five. was when the dot com boom was starting. And I was working at a boutique.

19:28 We have designed startup. That was learning stop. And I, you know, was doing this uh mailing list. And it kept spreading word of mouth.

19:41 More stuff started appearing there. Yeah. I said. Hey apartments are getting harder to find. So people can send me that.

19:50 Other people wanted me to put job postings on there. So I did that. Mm. In the middle of ninety five. Uh at about two hundred forty addresses.

20:01 The C C list. Broke. And I had to use a listserv. Right. Okay. You could and so You had too many email addresses.

20:11 But now people are saying hey I and more people want to join this list and people are saying I not only do I want to know what's going on, can I post a job here, can I Oh, I've got an av an apartment or a room for for rent. So it just kind of naturally becomes this thing. You're not c you're not necessarily You've got a list.

20:32 People are reading it and then other people like, Oh, can you add this thing to your email list this week? That's it. I had caught the uh vibe of the time. As the kids might uh say. And in the way I started Craigslist, I created its own vibe.

20:50 Where user generated content Became a genuine community thing. And my problem was that it was becoming a little too successful too fast. I got lucky. A guy named Eric Thys.

21:06 Offered me the use Of his uh lysser. He had a real server. Which was uh an astounding one point five megabits. Mm.

21:17 And uh The dilemma I had. was when you're using a list server, you had to give the thing a name. As a nerd, I'm literal.

21:26 I wanted to call it San Francisco events. But there were people around me. Like a guy named Anthony Bat. He told me that

21:38 People were calling my mailing list and Craigslist He told me that I had created a brand. He was right. I'd created something called Craigslist.

21:52 Let me come back in just a moment. Craigslist goes from a side project to a full-fledged company. But every company needs a leader, and Craig's not sure he's the right man for the job. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey, welcome back to how I built this. I'm Guy Raz. So it's 1996, and Craig Newmark's little San Francisco mailing list is really taking off. And what began as a way to share local events is turning into something much, much bigger.

22:39 And now people are sending Craig all kinds of posts, jobs, apartments, services, even items for sale, which is making it messy to manage by email alone. In ninety six. I remembered that I am a programmer. I can write code. Which would take an email?

22:58 I make a web page out of it. I have no design skills. So I'll just put up the simplest side I can. In retrospect I realize Oh, I do have uh one really good

23:12 A design skill. I keep things simple. Fast. I'm one of those people who love to get to the point. And then to stop talking.

23:23 Mm-hmm. And that works in uh so many ways. For so much uh of uh human needs. So all right. It sounds like it was already, you know, by the time you you put Craigslist dot org up up online in ninety six

23:39 It's evolving naturally. People want to post all kinds of things and And and and what, are you are you're managing this thing? You're taking in all the Ads and and and literally putting them up there or or h h how was it working?

23:54 Well, the idea is people email me Adds. I have written code which turns those uh emails. into uh classified ads. And a site.

24:07 Things work smoothly. And whenever a task started to take too much time. Like an hour a day. I wrote some code.

24:17 So the task took me five minutes. And That was just me for the first few years. By the end of ninety seven, we hit about a million pages per month.

24:30 Which was a lot then. And some folks wanted to help me run the site on a volunteer basis. So just to just to be clear, I mean In nineteen ninety seven. C by the way, Craigslist, I don't think it looks it looks that different today than what it looked like then, right? Correct.

24:46 Okay, so It didn't cost any anything to put anything up there at all, right? There was was there any revenue at all or was it just people posting and that was it? That was it. Um there were folks from Microsoft Microsoft Sidewalk.

25:01 But I'm thinking Banner ads are usually stupid. Uh I don't need the money. I'm doing uh well enough. So I said, No banner adds.

25:14 But In ninety eight. Didn't do Very well, there were always problems.

25:23 This was being done on a volunteer basis. So okay, so You you have this site, people are posting ads and you're you're managing it. You mentioned that there were some problems with it. What were the problems? Like it wasn't getting updated regularly, there was There was what w what w it wasn't it wasn't managed well. What were the some of the tell me what some of the problems were.

25:45 Mostly uh since the processes were still somewhat manual. Ads didn't go up on the site in a uh timely way. It could take uh

25:59 That wasn't okay. And when there was a problem, What? Sometimes to recognize A problem.

26:07 And to know the next steps, you had to be technical. And I was basically tech support also. So those were just Thus nothing about that was any good. Except for the spirit of some of the volunteers.

26:22 So at the end of'99. People were telling me, hey, Make it into a real company and Charge people for it.

26:31 Pay people salaries. Okay, before we get there,'cause I know nineteen ninety nine you decide to incorporate as a company. But This was Craigslist.org

26:43 And most people Assume that.org means you're a nonprofit organization. It doesn't not legally, you don't anybody can be.org. It doesn't mean you have to be. It's this is just a designation that the internet kind of but it's there's no legal requirement to be a nonprofit, but you were Craigslist.org. And still are. Yes.

27:02 The deal is Is that back then in the uh community spirit? or a vibe. org was actually used for anything.

27:12 Which put the community first? Anything with that, uh Spirit. of user generated content. And so when somebody did that uh domain registration

27:24 They did Craigslist. They also did Craigslist.com. And.NET. But given our spirit and intent,

27:33 We stuck with.org. Because that reminded us. And everyone else. Something was very different. About what we were doing.

27:43 We were uh I committed Monetizing the site minimally. W well, I mean, just to push back a little bit, I mean Uh I think and a and again, I'm not criticizing you. I think it's a smart move

27:59 But having it as a dot org designation also creates a halo effect. It it lets people think oh This is different. I mean look, at the end of the day, your business, even if you aren't charging everybody, You the the site was And eventually did make a was gonna make money.

28:16 It was gonna charge people. Well it helps signal. What we were about. Genuinely speaking, and I guess the dot org thing in a way. Reminded ourselves.

28:28 That there is something different about us. And A lot of it is gonna be minimal monetization. Okay.

28:36 You this is this is ninety nine, you incorporate as Craigslist as a as a business for profit and you decide This is going to become my thing. And I guess you're convinced by friends and other people that you should have a a a pricing model, right? And so I guess the model, which is still more or less the same today is you would charge for job ads.

28:58 Some real estate listings. And a few other things, but most things would be free. Right. And and And w and again the in nineteen ninety nine you're still manually put like people are are emailing into the email address and somebody you or now you're paying people are manually taking that ad and putting it up?

29:19 Well, At some point in the evolution, I don't recall when We automated a lot more in terms of posting and We've relied on the uh community. To let us know when there was a a problem.

29:33 But we still needed a substantial team. For example, we had a technology team We have a uh customer service team. We had uh billing. Very, very briefly, I think in two thousand.

29:48 We tried a little marketing. Put a couple job ad ads up. In HR magazines. That Lasted maybe a month.

29:58 Um so we ran uh very lean. And that was through uh ninety nine. But Toward the end of ninety nine.

30:08 I had hired a guy named Jim Buckmaster to take over technology. No one needed me to do technology anymore. But I was CEO. And I was a customer service rep. Just to just to clarify, I think you had about by April of of two thousand, you had about nine employees total. That that's maybe in addition to you.

30:30 And you hire Jim that year, but you were the CEO for the first year and and as you've already intimated in this conversation, and as has been As I've read about you felt like you were not good at being a manager of people tell me Where where your failings were.

30:50 Well, I was generally bad at making tough decisions, but Including hiring and firing. I lacked uh boldness of vision. For example to incorporate

31:03 Some new categories and to start expanding throughout the whole country. And I just wasn't emotionally predisposed to a lead, at least not from the top down. So that first year. I mean one of the your hires that you make is this guy Jim Buckmaster. And you recognize, I guess, by towards the end of the year that hey

31:25 He was doing IT and And you you sort of think maybe he should be running this company and and I should take on a different role. Frankly, and as I like to put it, as a manager, I suck. Mm-hmm.

31:39 And When I realized that, I realized, oh, I had hired Jimpuckmaster. And it appears that he would not suck in the manner which I did. And frankly my uh suckage was kinda brutal. Uh.

31:54 Made him CEO. Committed to him that I would not interfere with what he was doing. I would leave him to do his job. Mm. Jim not only has the tactical skills but

32:07 Uh socialization. But also Hm. intuitively understands the uh vibe. Of the community.

32:16 That's the uh one of the big reasons he uh joined. And over the subsequent twenty five years, Jim has maintained and amplified that vibe. And this was good because as a manager, I'm not good. But I'm a great customer service rep. So that's what I did really heavily. Or about another fifteen years or so.

32:42 So Chim becomes CEO in November of two thousand. And by the way, I I'm totally on board with this. I don't Ever understand why people let their egos get in the way of decisions like this. If you know that your business that you started is going to be more successful,

33:00 With somebody else running it? And you still playing a critical role like that? That makes a lot of sense to me. I agree. Accidentally I did the uh right and smart thing.

33:11 You say accidentally. Yes. I was just Winking it. I was operating off my uh instincts, my gut.

33:23 But I do realize that That's All of my success. has to do with accidentally Yeah.

33:31 Right place. accidentally making the right decisions. Which makes me The forest gun to the internet. Yeah.

33:40 Um Craig. I mean, it's a kind of remarkable'cause Jim is still the CEO today. How did you I mean, look, when you started Craigslist There wasn't a ton of money coming in. I think it I think by year three you were bringing in around seven million a year. So that was definitely great. But in the first year, like how did you incentivise somebody like Jim

34:02 to become the CEO, how did you have the money did did you did you have the money to pay him or did you say, Hey, I'll give you a big chunk of this business? Um Uh we had the cash flow. to uh pay the whole team. Reasonably well.

34:16 Including myself. Yeah. And uh the decision was made again, he had the right philosophy. It didn't bother him that uh he wasn't going to get uh wealthy. Or so we thought this way. Yeah.

34:30 And I did. as a purely symbolic gesture, it gave him and others Big chunks of equity. Not thinking that it might be worth a lot of money someday. For me the thinking is that

34:44 Money is important. But the philosophy The approach, the vibe, the That was the uh important thing. And uh he's done well.

34:56 Yeah. For sure. Um okay, so so you have a a c a competent, strong And you've got cash flow coming in, and this is brilliant I mean, still ninety percent or more of the ads were free, but you were making enough money on the ads weren't free. People would pay what, twenty five to fifty bucks for a job posting, for example.

35:23 Uh that was it. Um The philosophy Which was first articulated by the people who use the site. Mm.

35:31 They were saying, Hey, charge people who normally pay a lot more money for less effective ads, and that meant Charging the people who put up a job. Not the people who put up a resume. We would charge uh apartment owners, homeowners. For their ads when they wanted to rent stuff out.

35:51 We would not charge the people who were looking. Yeah. And that's the philosophy uh to today. The deal is that Craigslist has done uh

36:03 Better than anyone expected. Our business model is uh In a way it's Doing well by doing good. We've uh avoided

36:13 Becoming gentrified. Like so many sites. Jessica Alinga in her book The People's Internet said that we're one of the few remaining ungentrified sites And I love that.

36:29 Because I look at uh Neighborhoods. Which were only Partially gentrified or not at all, but Some of which are really successful.

36:38 Some of which are really about community. And I like that. I like that in neighborhoods. I like it in websites. Yeah.

36:50 Craigslist. I cannot imagine we'll ever win any design awards. It is not it is not I mean it is literally like you're going back in time. You're going to nineteen ninety nine when you when you go on it. It's kind of amazing that it it is it is exactly the same, which which I want to talk about in a bit. How did you decide to start to expand other cities? To go to LA and New York and then and then all around the world.

37:16 Jim did. I was uh not bold enough. To do that expansion. Jim was.

37:23 And he uh took the uh site tech architecture that I'd started on He made it happen. And uh He did so.

37:34 While maintaining the uh vibe we talk about. And it's the right thing and it turns out to be the the successful thing. And you w basically decided to take over our customer service. That was gonna be the role you were gonna play. No. I did not take over customer service. I acted as a customer service rep.

37:53 My agreement with Jim was that I would not be management in any role. And I would leave them alone to make those big decisions. So I was a regular customer service rep. Okay. You step away and let Jim run the business. You don't want any direct reports because you recognize this is not a strong suit of yours. You don't want

38:14 to deal with that. I I totally respect that. But it doesn't mean that you're out of the picture, right? I mean, I'm assuming Jim is consulting with you about big decisions around the business, you have you're having regular meetings, is that fair to say? I am asked occasionally. Would it make sense to ask me because I'm

38:33 Really smart about some things. And really dumb about other things. But the principle is that I'm not gonna interfere. And I have no influence or decision making capability.

38:45 You know'cause Jim needs to be left alone to do what he's really good at. I have a number of lessons Where people Uh interfere with things.

38:56 Uh often uh Pushing towards failure. Yeah. I uh suddenly w when I watched TV about Hollywood. I keep hearing about producers giving directors

39:09 What they call notes. Which are usually a bad idea. I am a guy who rarely gives notes. Or their equivalent.

39:20 I gotta focus on what I do well. I gotta focus on building networks. I gotta focus on supporting them. That's working. When we come back in just a moment. That hands-off style allows Craigslist to thrive.

39:36 And puts Craig's ideals to the test. in an uncomfortable partnership with a tech behemoth. Stay with us, I'm Guy Raz, and you're listening to How I Built This. Hey welcome back to How I Built This, I'm Guy Raz. So it's the early 2000s and Craig Newmark has handed the reins of Craigslist to a new CEO, Jim Buckmaster. And all around them, tech companies are collapsing.

40:19 The dot com bubble has burst and the stock market is plummeting. But meanwhile, Craigslist is stronger than ever. largely because it never took on any outside investors. What what I find so remarkable and brilliant about this business.

40:37 Whether this was intentional or not, and it sounds like it wasn't, is that The costs overhead for this business were very low. and the margins were really high. Well The

40:51 Uh cost part, the lien operation. We uh thank uh Jim for that. We do run lean. And that's well known. Uh the amount of profit the company makes.

41:02 No one outside of uh the company knows that. There are people who will uh fabricate numbers. To fill out an article. But the rule of thumb is that if somebody's telling how much Craigslist makes Uh you might want to disregard that.

41:19 Okay, let me ask you one question about estimates. Is it true that Craigslist today has only about fifty employees? Last I asked We had around uh forty or so. But I'm actually not current.

41:34 I numbers. This is remarkable because A business that is generating let's just say the numbers are wildly off, okay? Let's say you're only generating fifty million dollars a year. With forty employees.

41:49 That's a pretty healthy company. You're probably generating I mean, there they're there were, you know, li uh depending on the year, some years It was like a p b apparently a billion dollars in revenue, some years five hundred million, some years two hundred million, but still, with such a lean operation, I mean it's a it's remarkable. that you can have a such a significant business with such a small number of people.

42:14 It is remarkable, no matter what the revenue numbers are. Jim does a great job of running the company. Yeah. And Uh my concerns are that when I uh Receive some of the uh byproduct of that.

42:29 I have now committed All that revenue. to uh the charity world. Yeah. And wanna wanna ask you about that. But but going back to

42:39 the the sort of the beginnings here. So you are Craigslist is really It's It's growing organically. What is amazing to me, even in the first f three, four, five years, when it's already bringing in, you know, tens of millions of dollars.

42:56 There were no credible competitors. No one in in the first three, four years was trying to do what you guys were doing in a credible way. Well wha what explains that to in your mind? Uh Because Then

43:10 VCs and bankers were funding people to make a lot of money. Mm-hmm. There's Not the kind of money that they're talking about. In classifieds.

43:23 There was money though, there was money to be made. Uh there was uh money, substantial money sometimes. But Not the multiple billions. that the VCs and bankers wanted.

43:35 Okay. Two thousand four. eBay Which at that point giant, right? Obviously PayPal, they don't PayPal and They

43:45 They approach Craigslist to acquire it. They want to outright buy it. And i I guess Jim maybe in consultation with you says No, but we'll sell you a A stake, a minority stake.

43:59 Uh No. No. I had given big chunks of equity to people. Mm-hmm.

44:06 I'm including a one guy who decided He wasn't about the community mission. He wanted his sell his equity. Which did require the concurrence of uh people including Jim and myself.

44:21 Ebay. Told us. that they had the same uh community mission. The same vibe that we did.

44:29 We were convinced of it. So we are uh Were you authorized? That guy to sell his equity to eBay? They wanted to buy

44:39 Uh As much as they could. and they the only way they could do it was to buy it from somebody who was a s a shareholder. Yes. Meg Whitman, who was the ch E eBay chief CEO at the time.

44:51 She said, we were interested in making an acquisition of Craigslist. We would have loved to have bought the whole thing. But uh we knew that there was no path to control it, so we you know, unless they sh sold us some share. So You guys had to approve that they come in in two thousand four. Uh they paid thirty two million dollars for twenty eight percent of the company. So eBay got a board seat, basically on uh Crisis. Okay, so having a board seat meant that

45:18 That eBay was now privy to Uh s confidential information about the business, about Craigslist. But initially It didn't matter, right? It sounds like for the first year or so They were a board member and

45:32 And that it is w it was what it was. Yes. Okay. I I'm the reason why I asked that is because I know that things

45:41 Uh took a a left turn. In two thousand seven Because eBay that year launches its own Competitor, a classified advertising site called Kil G or K G G K Gee, yeah. Kill Gigi.

45:57 Uh When you and Jim found out about this. Did you what was your resp how did you resp how did you react? I uh wasn't overjoyed.

46:08 But Thinking about it only took uh time and bandwidth away from things that I had to do. Uh so I focused on what I had to do. And just

46:22 Uh uh. Listened. Uh to Jim. And counsel. Yeah.

46:28 In part I don't perceive them being a competitor. Because they don't have the same vibe. The same uh mission that we do. Um

46:39 And You know, you gotta stay focused on what matters. And ignore a lot of the rest. So this is a really interesting case because Basically what what

46:52 What your lawyers what Craigslist lawyers and Jim decide to do was to dilute Ebays. Share. They were able to dilute it.

47:02 to the point where the company could no longer have a seat on the board, thinking, hey, if they're spying on us, we don't want them to have a seat on the board. That, of course, pisses eBay off. And they sue you guys, then there's a counter suit, and this is two thousand eight. And this is not gonna be resolved, by the way, for anyone listening, until twenty fifteen where eBay agreed When they were all spinning out a bunch of their Brands like PayPal.

47:27 Um to sell back the shares to to Craig's to you guys, to Craig's list. I don't know if that was the rationale. But that did happen. Got it. Okay.

47:38 In the meantime. A a couple of things are happening. We should mention this. The context I think. By two thousand eight, two thousand nine, two thousand ten. Um the classified ad business for newspapers is just collapsing. The year 2000, the year that Jim becomes CEO, is also a

47:57 peak. of advertising for papers for classified ads. They made it was twenty billion dollars uh b uh it's estimated that that's how much newspapers brought in ad sales that year And and over the next few years they would see like a seventy, eighty percent drop in in Adds.

48:19 And um a lot of the, let's say, attention is being focused on Craigslist and online advertising, that that a lot of the money has shifted there, and you're starting to really see the collapse of the newspaper industry. So of course, what does the newspaper media industry love to cover more than anything else? Itself, right? So A lot of attention's being focused on Craigslist and how it's Responsible allegedly for the collapse of local newspapers. Did you feel like you were being

48:49 Personally targeted by critiques of Craigslist for the alleged or the what would become the demise of Newspapers. Yeah.

48:59 Uh I In the past. Felt. That Craigslist did have a substantial effect on newspaper's survival. Uh but

49:10 Until two thousand eighteen No one had done any of the numbers. I'd spoke to industry analysts like Ken Doctor and Rasmus Nielsen. Who said it was ridiculous to think Craigslist had that big of an effect. And they had intuited.

49:29 That's the uh cause of newspaper's problem goes back to the fifties and sixties. TV News interfered with newspaper revenues because they've replaced uh display ads and so on. Yeah. But I really didn't

49:44 Ever see the numbers. Until Thomas Bechtal. Hab rust. uh some serious in two thousand eighteen showing that newspapers started suffering.

49:56 In the sixties. He ran all the numbers. found that there's just continuous straight line decline with newspapers. Until around two thousand eight. At which point Facebook and Google

50:10 Started getting a lot of that revenue. Yeah. And that uh trend has continued. He uh tells me that if I feel Craigslist had that big of an effect, I I'm deluding myself.

50:24 What really hurt newspapers was TV news. Followed by Facebook and Google. Uh but And this is something that I find very frustrating. Whenever

50:36 An article's written about this. The reporters Never look up the research. They just start with a conclusion. And

50:46 continue with their uh Yeah. With the conclusion that they've already made. Okay. Let's let's dig into this. You said it was really only in two thousand eighteen that you were convinced that

50:58 Actually Craigslist was not. quote unquote responsible for the demise in classified ad revenue for newspapers and and or and the collapse of the newspaper industry. Which I broadly agree with, but you s but it sounds like until that point You were you did see the possibility that maybe

51:17 This thing you created did do that. Is that what you're saying? That's correct. Um at that point the discussion was more like, we don't know the real numbers. But that

51:29 There's no reason that any newspaper couldn't have done exactly what I did. Remember that the uh stuff I was doing, the coding that I was doing Was Fairly simple from my point of view. I mean I'm I am a really good programmer.

51:46 Not a great one. But as a really good programmer, I was able to do this. I wrote code which got to the point and got stuff done. And That uh takes no genius.

51:59 So okay, so Craig. I mean, it doesn't take a leap. to Mm Make a connection.

52:08 Between this this, you know, sort of view that you held or that you believed. that maybe what you built was partially responsible for the demise of of the newspaper industry and decisions you you made as a Philanthropist, because you made a lot of money. Again, I'm I have no problem with people making a lot of money, right? I think it's

52:31 important for people to be motivated by uh you know, by certain things in order to to to contribute. Um but your philanthropy a lot of your philanthropy was and maybe still is focused on journalism. You have a a whole school named after you at in the at City of the University of New York. You've given it Columbia Journalism School to New York Public Radio.

52:54 I is it a leap for me to assume that some of that it comes out of penance or sense of guilt? Uh that would be false. Okay. Explain. Here's the uh motivation.

53:06 In high school I had a great US history and civics teacher. Guy named Anton Scholsky. Yeah. He taught us a lot of things like the importance of uh due process and

53:17 You gotta follow the Bill of Rights. He also taught, like I say it. Is that a a trustworthy press? is the immune system of democracy.

53:28 And you protect the country. By supporting a trustworthy free press. Yeah. I put a couple hundred million into it. And uh

53:39 That's helps them. My two focus areas in the press now are The uh CUNY J School. In part because the CUNY is about giving people opportunity.

53:52 Who never got much opportunity. And I support Wikipedia. Which is where facts go to live. So Obviously, you know, your time

54:04 uh sort of in managing Craigslist ended early in that period and and and your philosophy was, hey Get out of the way. let the the m most competent people run this thing, which you did, and s smartly so And again, the it's a private business, so nobody knows exactly How much money?

54:23 It's generated there are all kinds of estimates. But I I would think And I don't I don't think this is Good or bad, I I would just think this is the reality of the nature of the beast.

54:35 There's a lot more competition now. There's Facebook Marketplace and there's other Places where people advertise next door. Um If you look at every business that's on how I built this, right, that we interview. Every founder

54:48 is thinking about the future, right? They want this they want their businesses to be hundred year businesses. So they're constantly thinking of new ways to acquire customers to market to grow And in in the case of Craigslist, I wonder if you feel like that matters. I mean in other words What happens to Craigslist in fifty years? Like is there a plan to keep it growing and to keep it robust, or does it is it

55:14 Is it okay if it just fades away at some point? Our uh orientation is different. The question is, does Craigslist uh serve the community? Does it continue to maintain that genuine community vibe? I do want it to survive and thrive.

55:33 So I do think about Craigslist's future. But If a community service fails in its mission to be a community service.

55:44 Maybe it's time to go. Okay. So now Here you are. You have Done very well. I mean this was

55:54 You've even said like I never anticipated. being wealthy or having money or even this This email list turning into a business b uh app apparently worth Potentially billions of dollars.

56:08 You never anticipated that. This was not in your this is not in your in your horoscope. Yeah. Yeah. I'm uh struggling with this even now.

56:18 Because It's been pointed out to me that arguably Maybe I have a elite levels of money. But simultaneously

56:29 I have the tastes and attitudes of a peasant. I I mean it looks like you're wearing a a Brunello Cucinelli shirt right here on on the screen. That's a that's a f that's an eight hundred dollar shirt you're wearing there, Craig. I'm just kidding. I'm kidding. Frankly. My uh wife

56:45 is still telling me that I could Do I should do better. than buying fifteen dollar henleys from Amazon. Well, you know, listen. to each his own and and I think that's that's great.

56:59 Uh what do you I mean? You say that it i it's it makes you s uncomfortable. Why? Well

57:08 Um The uh Sunday school values I got. Had to do with uh balance. I like living comfortably. I like helping my family live comfortably, but how much do you need?

57:23 At that point. You start to give it away. To uh Protect the country. Sometimes to feed people.

57:32 This is not a difficult decision. I don't need homes across the world. I don't need a private jet. And you know, I I Know some of these billionaires. A little bit.

57:45 And Some of them. Are not miserable. But the majority.

57:53 So what is your plan? I mean you have quite a bit of life left to live You've said publicly you want to give virtually all your money away, that's a lot harder to do than people think. Like you literally have to

58:10 deal with requests for proposals and look at what the the you know the request is and who the cup who the nonprofit is and what they want and what they're doing and Uh it's it's slow. I Have a good uh foundation for my decision making, and a lot of it's become we should protect the country and to protect the people who've protected the country. And Pigeon Rescue, that's a separate one.

58:38 But the deal is that I'm very aware that I don't have the social skills. So I did a lot of research. Made some

58:50 good decisions like ten years ago. And then I started building networks of networks. Of people who are really good in these areas. and have funded people in these networks. To continue doing

59:06 Really good work. So what so besides you know supporting journalism What's your focus? What's your what's the thesis of what where you want to put your money? Well I feel that we should support Vets.

59:20 Who sacrificed a lot to protect us all? Yeah. What I've done is located Bob Woodrow Foundation. They run this Got Your Six network. which is a collection of nonprofits that are good at helping vets.

59:35 Mm Military families sacrifice a lot. to have their active service members help protect us all and the uh Blue Star Families organization. Yeah. They are running networks of of uh chapters and outposts.

59:52 Who help? Military families. with what they really need to do to live okay and to support their service members. And um You mentioned pigeons. You actually do literally

1:00:07 Support uh pigeon philanthropy like a re pigeon rescue. I love birds. And I have a sense of humor. So I do support a few uh Pigeon rescue groups.

1:00:20 Like uh Wild Bird Fund in the Upper West Side. And uh in the Bay Area it's called Palomacy. Um But uh I do indulge myself in uh other ways.

1:00:32 For example. Mr. and Mrs. Levin taught me. Sunday. At the Jewity Center in Morristown, New Jersey. They've never been honored.

1:00:43 Until I did something. At the community center to honor them. And That involved also Fun.

1:00:53 To restore A uh Torah. Damaged in the Holocaust. Do you think that you'll be able to actually d give away all of your money or most of it by the time you die?

1:01:05 I w have it. That in motion right now. I'm planning five to twenty years out. I have a pretty good idea of how I'll be doing that. Uh my only uh

1:01:18 Issue is how am I going to do due diligence If All the money is not given away by the time I pass. So I figure I will exercise due diligence

1:01:31 The uh a combination of seance And uh Haunting people. Okay.

1:01:38 So Uh I mean you you you've called yourself the Forest Gump of the Internet, right? Which is that you were at the right place at the right time, right?'C he was he he always seemed to be at the right place, Forrest Gump. And uh and then made a lot of money in shrimp the shrimp business eventually. Uh but um You you obviously are saying that because you were in the right place at the right time. It was like San Francisco, it was late nineties, it was community, and then it became a brand, and then it became the cool brand that everybody went to, and then it just became a brand. Like

1:02:09 Even to this day If I wanna find I don't know, like I still go to Craigslist, I'll still check it. People will s you know, people still go to it. So і is kind of amazing'cause you you know

1:02:26 You could make the argument that it it w there was a lot of luck involved there. It was just the right place and right time. And Um I think I I already have the answer to this question, but I'll ask anyway, because I always ask.

1:02:39 Uh how much of of where you got do you do tribute to luck and how much to hard work any of it to hard work? I don't know how to uh Figure The proportions. I've worked every day, literally, for the last thirty years.

1:02:55 Some days are lighter than others. So I guess the work is hard. But it feels good. It's a matter of purpose.

1:03:05 So I just uh Plug away. I get done what I need to get done. But I try to maintain Yeah, my values.

1:03:14 And again the Notion is uh how much is enough. Mm. You decide for yourself. How much is enough?

1:03:23 And then you practice what you preach. And you know, sometimes it works. It's working for Craigslist. And uh Some things on our world

1:03:33 Are good. That's Craig Newmark, founder of Craigslist. By the way, aside from the fact that you can find just about anything on Craigslist, They have some pretty bizarre ads, and there's even a page on Craigslist dedicated to the funniest and weirdest ones. It's called Best of Craigslists. And it includes ads like, This is a long shot, but any chance I can get my rock back?

1:03:57 Or haunted Thai puppet available for sale. Or I need someone to retrieve a hidden obelisk. It goes on and on. It's absolutely amazing. you should check it out on Best of Craigslist.

1:04:10 Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and as always, it is free. And if you're interested in insights, ideas, and lessons from some of the world's greatest entrepreneurs, sign up for my newsletter at guyraz.com or on Substack. This episode was produced by Chris Massini with music composed by Ramteen Arablui. It was edited by Kevin Leahy with research help from Sam Paulson. Our engineers were Patrick Murray, Maggie Luthar, and Robert Rodriguez. Our production staff also includes Alex Chung, Carla Estevez, Casey Herman, Katie Seifer, Carrie Thompson, Ramel Wood, Neva Grant, Andrea Bruce, and Elaine Coates. I'm Guy Roz, and you've been listening. to how I built this.

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