The Demise of Craigslist

December 13, 2010 - Get free updates of new posts here

If you love Craigslist say “Taco.” Anyone who reads this post just said Taco which is both awesome and impressive at the same time. It’s hard to meet people who dislike the service. It’s free, you can find almost anything you want and the company is so “good.”

Then why may they lose in the next 5 years.

“What you talkin about Noah?“

I was scootering down the streets of Florence a few months ago and I thought I saw a company sign that said they solve problems. Imagine a business where I could call up and say I have a problem, will you please get me flowers by 10am tomorrow. Bamn, done.

I thought a bit further about how Craigslist has tons of people looking for work, heck I found an unemployed guy to come over and help me move my things in exchange for $10 and my left over beer. The more I worked through the scenario the more I realized that even though it is a free internet service Craigslist was not ideal.

Why?

The same reason you aren’t buying your things off of eBay anymore. You want more.

You want consistency, clear expectations and frankly less bullshit.

The evolution looks something like this:

Internet was born.

eBay helped you get rid of all this extra crap you had lying around. Wow, they have no inventory, take a cut of everything and millions of people are making all this extra money. Boom. Success.

Next, we have Amazon. At first you were for my friend’s dad who was an early adopter engineer, then I graduated college and I bought that book from you since it was a few bucks cheaper than Barnes & Nobles. Recently, I am older and you launched Prime and I am just a pawn in your game. Put it out there and I’ll give you my dollars. I’m easy.

Anyways, the evolution follows how people want things to be easy and predictable. The same reason I sell all my stuff on Amazon Marketplace. I put my upc in and I get a sell quickly. No hassle, no community uproar over another fee, no 18 fields to input my ipod. Same with buying, I just find it, hit go and you have it on my doorstep in 2 days.

People want more. They can’t just have autonomous experiences each time with your product.

Back to Craigslist. Let’s say I want someone to help solve a problem of mine. I post it on CL. Get tons of shit responses, wade through them and maybe that person flakes.

So with Craigslist slipping new companies are picking off pieces like a Lion on a Zebra carcass.

Here are the companies picking off the slivers of Craigslist and, frankly, the sites that are better than Craigslist:

Gigs => TaskRabbit
Activites => Skyara
Housing => AirBnB
For Sale => eggcartel
Tickets => Ticketfly
Gift Cards => CardPool
Casual Encounters => Speed Date

The list can go on of the pieces that are still available, Cars, Jobs, Discussions, etc…

Ultimately, these services provide you consistency and accountability. I know what I’m getting.

The companies above know how to make their customer happy every time. I know what you are thinking. Yes, Craigslist is free and very easy to use. I don’t think it will ever go away but I do think CL at times costs you more in time and money. Also, there is no value created over time while using the site. For instance, having you (as a seller) prefer me more due to my many successful CL purchases vs. the 50 other people who email to rent your apartment.

To me at this point in my life it is worth the few dollars in service fees to start using services that save me time and headaches.

Unless Craigslist adapts to how people are preferring to use internet services as the internet grows up I see a huge downfall in their business.

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32 responses to “The Demise of Craigslist

  1. Michael Reply

    Nice analysis Noah. I can’t recall how many conversations I’ve had with people about building a craiglist killer, but I think you’ve finally identified how to actually do it … death by a thousand well-manicured cuts.

    So is this your same secret sauce strategy for taking out Groupon? :)

  2. Scott Reply

    Great post Noah. I’d agree that CL isn’t covering the bases like it used to- the user experience is just a little too bulky and the accuracy and authenticity is lagging.

    To add to your list of replacements, I’d throw in Odd Jobs (http://oddjobnation.com/) under the “tasks” category. Used them several times with a great experience.

  3. Adam Reply

    So you’re actually suggesting a splintering of services across multiple technologies? I thought the big thing was combining disparate services into one mega-conglomerate service which can be a one-stop-shop for people?

    That being said, I agree that Craigslist has not been agile enough in dealing with the issues their customers encounter. BUT something as similar as a verifier user account (anonymous of course) which allows spam/useless accounts to be more easily filtered out, and some better way of getting listings to be visible would go a long way. Hell, it could even get some income from the free service (pay $1 to be a featured listing, etc).

    Good post!

    Adam

  4. AN Reply

    This post communicates more about you, than the changing marketplace. You’ve matured to the point where you don’t mind paying extra to get what you want with quality service, but that doesn’t mean that everybody else is also.

    In this economy, craigslist will only get bigger. Look at the unemployment, it’s not getting better.

    A good quick example: I needed a DSL modem. I could have spend $40+ and bought it on ebay or amazon (new retail was $90+), received a tracking number, saved half an hour of time and received higher quality of service. But after posting on CL, I drove two miles and picked it up for free from a lady that no longer needed. My cost: 2 miles worth of gas, a smile and $0 cash.

    Services like Airbnb will also get bigger, but not at the expense of CL. A certain number of people using CL will get tired of using it and will be able to afford and use services that provide better service/support, but it’ll still be a very small portion and probably not noticeable to CL.

    I’m also in the same boat as you are. Many times there are cheaper alternatives on eBay, but I’ll pay more on Amazon because I don’t have to deal with all of the headaches that comes with buying on eBay, paying with PayPal, and hoping I receive what I ordered.

  5. Dave Reply

    Agreed that CL is far from ideal and that new businesses will ultimately erode their model unless they provide better functionality. But I’m not sure offering a premium experience with the same distribution model is actually going to bring them down.

    It’s tough to unseat a free service that’s hit critical mass with prevailing technology. There’s certainly room to offer a premium experience in those niches, but it’s tough to beat a consolidated service. It’s much easier to visit one place than 10, and the same is true of remembering them. The jobs market is a great example–it’s an insanely competitive market, yet they’re able to steal business while charging. That flies in the face of the segmentation idea, even if they don’t dominate the market.

    I’m sure disruption will come, but I’m not sure it’ll be a result of a competing website that offers a twist on the same distribution model (or multiple sites for that matter). More likely, it’ll be a technological advance that cripples their distribution or makes the model obsolete entirely.

    The one thing I’ll say is that leaving Craigslist is frictionless, provided other alternatives have the same inventory. There’s no true value for me as an individual beyond what the community provides. I don’t lose any data, standing, friends, etc. from leaving. Same can be said of Google Search, though…

  6. Taylor Reply

    Your analysis makes a lot of sense. I agree with it.

    There will always be some sort of demand for CL (or something like it) because some people either 1) don’t highly value their time or 2) genuinely enjoy the process that results from the inefficiencies of craigslist’s model.

    One of the biggest complaints I have about CL is that is filled with people who don’t value their time or aren’t willing to spend money if they don’t absolutely have to. As someone who isn’t in this category myself, I’d prefer to use websites that don’t specifically attract that crowd.

  7. Sean Reply

    “To me at this point in my life it is worth the few dollars in service fees to start using services that save me time and headaches.”

    this coming from the guy who admittedly takes time to hunt for a coupon code if he sees a space for it on a checkout form?? ;-) jk.

    CL quality has definitely degraded – at one point it was the place where all the early-adopters hung out so it had a higher caliber of user. now it’s rife w/ cheapskates and those high IQ early-adopters are fleeing to the services you pointed out. IMHO it still has a place but in the same way that yardsales still have a place if you’re seeking the unpredictable treasure hunting experience vs. the predictability of Walmart. Certainly for things like scouting for a roommate, using a paid service is going to yield people who value their time over money and are therefore likely to self-select to being a higher caliber of candidate.

    sean

  8. Varun Reply

    Noah, a friend in the Valley’s doing a startup that [to my simple mind] fits in with your thinking. It’s called TrustHop – you might want to Google them.

    See you again in Singapore some time. :-)

    – Varun.

  9. McDonalds Reply

    Taco. I do believe CL could use a “refresh, but its been doing ok up until now and probably just needs that extra push or nudge by a more fierce competitor. It doesnt mind the smaller companies/sites coming in. They actually preffer it, due to the fact that they provide a full service and have everything “in house”.

    Sincerely, A. Mcdonald

  10. Susan Reply

    Just coming in here from your webcast for Ramit.

    Your analysis here makes way too much sense. I didn’t realize you could sell items other than books on Amazon, so thanks for that; am now off to check out the other services that are chipping away at craigslist.

  11. Devin Reply

    I agree with you that craigslist is in danger of losing its position in the next few years but I think a lot of its users value the sheer volume of items listed on the site. I see it more like thrift shopping rifling through droves of clothing racks to find that one awesome shirt for $5 rather than a hip boutique that buys the same clothes from the thrift store and sells them for $15. And for the issue of flaky people, how would another site be able to prevent flakiness??? It can’t, people just flake occasionally and theres no way around it.

  12. Jacob Reply

    I couldn’t agree with you more. This post is dead on. The way we buy and sell on the Internet is evolving. People want more than a crude description or a poor set of pictures to base a purchase on. Video is the new medium to communicate in and video classifieds is the next evolution of classifieds. Yapeo.com is bringing the power of video to classifieds in a way that will change how people buy and sell.

  13. Shawn Poh Reply

    Firstly, Taco, taco, mucho burrito.

    Secondly, I agree that people don’t want autonomy every single time they visit the site; it takes wayy too much time to filter through the noise to find what you want.

    I feel that this is also the case with twitter. Too much content, not enough context to figure out what really matters to each individual.

    on other notes, you were in Singapore?!

  14. Lorin Kalisky Reply

    Just found this post and agree completely. CL is suffering from the mass market and all the noise that it brings. Since they’re content not being an innovator, it’s easier for more focused models to succeed where CL is ineffective.

    And I also agree with Dave’s comment, that disruption will not come from a twist on the same distribution model. Excuse the self-promotion, but my startup, Zenlist (http://zenlist.com) is focused on being the Google ads for classifieds. Zenlist lets any website publish relevant classifieds and make money, and their users can connect and transact with other like-minded individuals. It’s a new, networked distribution model, and we like to say that we’re “re-democratizing classifieds”.

  15. Riel Reply

    Interesting point of view..

    I agree for the most part, although I think you’re speaking as a pretty well heeled netizen.

    not sure there won’t always be the … web pleebs who just plain “get” craigslist’s level of simplicity and not much more.

    The quality of connections on CL has definately slipped I’ll admin, it used to be this nice little cachet of net friendly types with great attitudes, more and more the morons have taken over.

    Thanks for making me think about it …

  16. Sean Gately Reply

    I disagree. Craiglist will still be around perpetually for 3 reasons.

    1. You get everything in one place. Even if Judy is right and there are 30 companies cutting tiny portions of revenue away from CL its still 30 freaking places you have to go. Most people don’t realize if something sucks or quality is diminishing, this is why ebay still has 96 million active users. It’s very hard for the average non techy to find 30 companies that do what they can do on CL. Others might do it better, but no one does it all.

    2. Name recognition. Never underestimate the power of being first and people knowing who you are. Unless a service knocks the average consumer on the head they will continue to repeat old habits.

    3. The fact that it offers little perceived ongoing interactive value is a huge value. Let me explain. Most companies now have a stickiness factors that keeps you coming back (they need you back), whether you building a friend list, getting emailed with the latest daily deal, or having your online minty site emailing you that your over budget on cabernet for the month, everyone is offering value to keep you coming back.
    But what about CL, they don’t do any of this and yet they have 50 million active US users, and 2 billion page views a month. How come? It’s easy, you get in, they offer what you want, you get out. Simple. They cracked the code. CL doesn’t beg you to come back, you just do every-time you need to sell something quick or find something locally, and then you forget about them…Until next time. Thats Value.

  17. Pingback: Noah Kagan predicts the demise of Craigslist | Yeh! Observations

  18. Alex Berman Reply

    It makes a lot of sense, and this is actually a huge opportunity. Just off the top of my head I can think of a few missing niches here that could also replace parts of Craigslist:

    People needing painters
    Businesses looking for independent consultants
    Adults looking for high end music tutors
    Looking for back alley independent car mechanics (kind of sketchy but could still work)
    People looking for high quality artists for commissioned portraits or murals.

    Those are just a few, but you came up with a great exercise: Pick a website that serves a huge group of people, declare it dead, and start looking for ways to improve it by niching down. Viola! Business ideas galore.

  19. Frank Reply

    Craigslist epically failed by shutting down Craiglook, a service that allowed one to check with a mileage radius, for instance. As I undertand it everything was still filtering through CL but the engine was unique. Anyway, I always love reading their oddball personals.

  20. Jared Reply

    It brings up a good point – another thought to consider;

    I’ve been using CL to find prospective customers to make cold calls by checking for apartments in Chicago. Because the sheer number of ads and the volume at which they are posted I am not sure it is even worth using it anymore. Unless you have a tool that automatically posts ads your apartment ad will be pushed down so quickly it may not be worth the effort. Smaller markets may not have that problem but larger CL markets seemed swamped with apartment ads because it is free.

  21. IrinaLove Reply

    I couldn’t have stumbled across this article at a more appropriate time. I’ve been dealing with the bullshit of CL just trying to sell a few items lately. And you’re right, it’s more hassle than it is worth. I’d rather just post these things to freecycle.org to get them out of my hair, and stop dealing with all the spam and flakiness responses from CL.

    Great post man. Thanks for the heads up about the other sites that are picking up where CL leaves off.