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How Craigslist Makes Money

forbes.com

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Re: How Craigslist Makes Money

#11

Post by coldtea »

madamelic wrote: post #8

I think they are doing it right. Just find a niche and work at it progressively through life. No need to raise $100M D Rounds, no need to have an explosive exit, whatever. I think it would be nice to just steadily have six figures, work on something I love and live life (a la Basecamp). Most of all: Have complete control of your destiny. No investors, no bosses, etc.

>Most of all: Have complete control of your destiny. No investors, no bosses, etc.

Here's a useful guideline to add to what you said: unless some person makes way more than the Basecamp founders (e.g. through some unicorn deal or whatever) and enjoys the same freedom to shape their product, then they have absolutely no leg to stand on to criticize their model much less to sneer.

I mean, some startup multi-millionaire/billionaire sneering at "lifestyle businesses" I can understand (though not agree with).

But some ramen eating wannabe sneering at them, it's inane, since the majority don't end up nowhere near as succesful.

Re: How Craigslist Makes Money

#15

Post by draw_down »

coldtea wrote: post #11
madamelic wrote: post #8

I think they are doing it right. Just find a niche and work at it progressively through life. No need to raise $100M D Rounds, no need to have an explosive exit, whatever. I think it would be nice to just steadily have six figures, work on something I love and live life (a la Basecamp). Most of all: Have complete control of your destiny. No investors, no bosses, etc.

> Most of all: Have complete control of your destiny. No investors, no bosses, etc. Here's a useful guideline to add to what you said: unless some person makes way more than the Basecamp founders (e.g. through some unicorn deal or whatever) and enjoys the same freedom to shape their product, then they have absolutely no leg to stand on to criticize their model much less to sneer. I mean, some startup multi-millionair…

Ugh, I know! I hate it when broke people have opinions.

Re: How Craigslist Makes Money

#16

Post by yeukhon »

ouid wrote: post #2

If Craigslist makes ~600M in profit , Why the hell is Forbes giving them a valuation of 3B? That's a Price to Earnings ratio of 5. That's not conservative, that's insane. Am I missing something?

If 600M is profit (not revenue), that's 400M short from 1B. That's not a bad valuation, also consider the user base is quite strong. Using both yield 3B is very conservative IMO. If you buy it for 3B, then you will get your investment worth in a couple years.

Re: How Craigslist Makes Money

#17

Post by iamatworknow »

>It also charges fees to list postings in categories including ... automobiles offered by dealers

This was a huge thing in my industry. I work with a lot of independent car dealers that used to list everything on their lots with Craigslist, then they started charging the dealers $5 a pop and many of them just quit using it.

There are too many other car listing sites out there now that offer more than just an ad (vehicle reports like Carfax, market trends, valuation, et cetera), so Craigslist just wasn't worth the cost to them.

Re: How Craigslist Makes Money

#19

Post by eanzenberg »

debacle wrote: post #4
ouid wrote: post #2

If Craigslist makes ~600M in profit , Why the hell is Forbes giving them a valuation of 3B? That's a Price to Earnings ratio of 5. That's not conservative, that's insane. Am I missing something?

For companies that aren't going to eat the world, only exist on the network effect, and are happy in their space, a P/E of 5 is reasonable. How much would you pay to buy craigslist?

At least 10x their yearly profit? What other investment provides a consistent 10% yearly return on the scale we're talking about?

At P/E ratio of 5, you literally just wait 5 years and you've just made as much as your initial investment.

Re: How Craigslist Makes Money

#20

Post by sillysaurus3 »

pkamb wrote: post #14

> 25. A Craigslist competitor. Craiglist is ambivalent about being a business. This is both a strength and a weakness. If you focus on the areas where it's a weakness, you may find there are better ways to solve some of the problems Craigslist solves. http://old.ycombinator.com/ideas.html

Remarkably prescient for 2008.

1. A cure for the disease of which the RIAA is a symptom. Something is broken when Sony and Universal are suing children. Actually, at least two things are broken: the software that file sharers use, and the record labels' business model. The current situation can't be the final answer.

8. Dating. Current dating sites are not the last word. Better ones will appear. But anyone who wants to start a dating startup has to answer two questions: in addition to the usual question about how you're going to approach dating differently, you have to answer the even more important question of how to overcome the huge chicken and egg problem every dating site faces. A site like Reddit is interesting when there are only 20 users. But no one wants to use a dating site with only 20 users—which of course becomes a self-perpetuating problem. So if you want to do a dating startup, don't focus on the novel take on dating that you're going to offer. That's the easy half. Focus on novel ways to get around the chicken and egg problem.

Tinder launched in 2012.

17. New payment methods. There are almost certainly things whose growth is held back because there's no way to charge for them.

Bitcoin.

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