All right, here we go. Today we have multi-millionaire Craig Newmark, founder of the legendary local classifieds website Craigslist, which coincidentally enough was where I met my ex-wife 20 years ago. More on that later. Craig, welcome to Vlad TV.
Okay, so let me start from the beginning. You were born in Morristown, New Jersey.
Yes. Not very far from here.
Right. And you had Jewish parents?
And your mom was a bookkeeper and your dad sold insurance.
He sold whatever he thought he might be successful in for a while. He was a meat salesman, but he never had much success.
Yeah. Sounds like my dad. He had a little one-person home inspection company that he struggled with over the years, but not extremely successful either. My mom kind of held it down financially in the house.
Okay. But then when you were 13, your dad passed away and then money got tight in the household.
Um, money was kind of tight even when he was working. But the deal is is that we were never doing very well. I'm not certain where we landed economically, but somewhere between poverty and middle class.
Okay. So, you end up graduating high school and then you get a computer science degree.
Yeah, I went to a good school, got a couple degrees. Good timing.
Yeah, I have a computer science degree also from UC Berkeley. But the interesting part is I got my degree in 1996. You got yours in 1975. This was before the personal computer and everything.
Yeah, that's a big difference. I've been reflecting on it because on the 27th, that'll mark 50 years that I became a grown-up. I went to work for IBM in '76.
Okay. And back then these were just big mainframes.
Pretty much. So I mean the first computer I worked with at IBM down there was a kind of doomed mini computer called the Series 1.
Right? And back then computers were used only by businesses doing, I think you were doing General Motors factory automation and stuff like that, right?
Yeah, I did move from Poughkeepsie to Detroit where I worked with the branch office that did nothing but work with GM.
Okay. So, at one point you ended up quitting IBM and then you moved to San Francisco. This was 1993.
And a couple years after that is when Craigslist actually launches.
It launches, but from my point of view, it was just kind of a half-ass hobby, which became something more.
Okay. And I remember finding Craigslist around this time, 1995, 1996, because it was a free classified service on the internet. It was extremely simple. There were no graphics. It was simply text but it was well organized with different departments. You could buy and sell cars, buy and sell furniture. There was a personal section which I eventually went into later on and so forth. Why did you make it so simple as opposed to very graphics heavy?
Well, in part all that I know is simple. I don't know how to do fancy design and that was the right approach for our community back then and even now. Sometimes people just want to get something done and then be on their way. So, we kept the site fast and simple and it's fast and simple now.
Now, they named Craigslist after you because they wanted you involved in the project so you wouldn't leave.
Um, what happened when things were still pretty half-ass is that at one point I had to start using a list serve. List serves need names. I was going to call it SF Events. Um, I'm a nerd and very literal. Uh, but people around me told me that they were already calling it Craigslist. I had created a brand. Uh, they explained to me what a brand is and they were right. With my name on the thing, I always took it personally and that's pretty good, too.
Okay. And unlike other sites like eBay, you never actually had seller ratings.
Um, well, we do charge professional sellers in some categories, but the site is free to view things for sale or whatever. I just made a decision that we would monetize as little as possible.
Okay. And around the same time, eBay was launching.
Something like that. I forget the chronology.
Did you look at eBay as a competitor back then or did it not really matter?
Didn't really matter. Uh, we modeled ourselves as a community service and no one competes with us on that basis.
Okay. So this starts off as a local San Francisco community service, but by 1997 you guys were getting about a million page views per month.
Yeah, that was a milestone at the end of '97.
And back then, a million page views per month was pretty good, right? So, is that when Craigslist started to form into an actual real company as opposed to just a project?
Oh, it became a real company in early '99. What happened was that people who love the site took me out to lunch and told me that running it with volunteers just doesn't work. I had to get serious. Uh, they were right. Um, and I started hiring people and I also made that decision about monetization. I'm thinking no one needs crazy money. And it just felt truer to my values to make it as free as possible. The deal is that's kind of what I learned in Sunday school that you should focus on looking out for people and that meant charging as little as possible. And that's the current Craigslist approach.
Right? You guys are charging like 20 or $25 to post ads.
I forget the details these days. Frankly, I've been retired from Craigslist for seven or eight years because Craigslist doesn't need me anymore. But I can do and am doing a lot of good via philanthropy.
Okay. So, by 1999, the company becomes more serious. You guys hired Jim Buckmaster to work there for you. And now it moved out of an apartment into a strip mall office. You have real employees. And this was a very interesting time in Silicon Valley. I remember I was there. I was working for a company called Net Objects. And the VC money was just flowing. The internet was the biggest thing ever. Anyone with any sort of internet idea would get millions of dollars in funding, which ultimately led into the dot crash. But during that time, you were offered a lot of VC money, but you turned it down.
Yeah. Um, VCs, bankers, wanted me to do the usual Silicon Valley thing, monetize as heavily as possible and they wanted to throw billions at me, but I don't see why anyone needs a billion dollars. And I felt better letting people keep the money that should go back in their business, not just for ads.
Okay. What was the most amount of money that you turned down?
Um, we never got to specific figures anywhere. Someone recently did their best guesswork estimated 11 billion. Uh, that's kind of consistent with what I could have been offered or at least made over the years since if I did the usual thing, I would probably take the money and become a VC.
Okay. You turned down 11 billion dollars. That's a mind-blowing number when you say it out loud.
Um, it's very, very surreal, but the entire experience has always been very surreal.
Okay. So, by 2001, uh, Jim Buckmaster becomes the CEO and you actually stepped down and become full-time customer service.
Yeah. I realized that as a manager I suck and should get out of the company's way and Jim I thought would be a better manager than me. Uh, that's proven to be right and I'm happy I made that move.
Well, wasn't there an employee that owned like 25% of Craigslist and then sold it to eBay and then you guys bought it back?
Something like that. I just gave the employee that equity. It was a pure gift. Uh, thinking that he had the same philosophy as we did, namely, you're not going to make a lot of money from this thing. But he decided he wanted to sell his equity and he wound up selling it to eBay. There was litigation and we bought the equity back from eBay.
How much did he sell it for?
Um, I have no recollection of that amount at all. I guess I don't care very much.
Well, I assume it's probably in the tens of millions, if not hundreds of millions.
25% of the company's a lot. Um, closer to I think maybe on the $10 million side, but I plain don't remember because the number was never seemed very important to me. What was important is that we achieved our independence because we wanted to stay in a minimal monetization mode because that felt right then it feels right now.
Okay. So, we get into the 2000s and at this point Craigslist expands to over 500 cities.
And because it's such a simple, easy to use site and a lot of times in the smaller cities the ads are free, this starts taking money away from all the traditional newspapers which are struggling already because of the internet. Um, how did you feel about that whole situation?
Well, I used to go with the conventional wisdom that Craigslist materially affected newspaper revenues. But 7 years ago, a industry analyst named Bectal, what he did is he ran the numbers. He did a deep analysis and showed that newspaper revenues started going down on a straight line in the early '60s or so because of TV news and local TV and Craigslist had no effect on that that he could find. What happened was in 2008 or so at that point Google and Facebook started taking a lot of ads and that's when newspaper revenue really started dropping off on a much steeper slope.
When the dot crash happened, how did it affect Craigslist? Because Craigslist was not a public company. It had no stock, but everything else was crashing around it.
Um, I'm of the impression that at that point the number of job postings diminished a bit because there was less hiring going on. But we came through pretty well because Jim was leading the company running it pretty lean. You know, we didn't have a lot of extra people that worked out pretty well.
Well, there was something like 550 cities that Craigslist had a website in, but only 40 of those made real money. So, by the time we get into the 2000s, how much revenue was Craigslist making?
Um, I don't know about the number of cities that were making money and both I don't recall how much it was making back then and the company policy is just not to disclose that.
Okay, fair enough. Well, by 2004, I was using Craigslist myself in the personal section and there was like men seeking women, women seeking men, so forth. But unlike other dating sites, there were no pictures. It was just a text ad with a description and you could email the person not to their personal email, but through a Craigslist email. So, that hides the person's email, right?
Um, that's right. We introduced pictures later, but we did provide anonymized email because that's what people wanted us to do. And that's really a big deal when people are worried about being harassed. Um, if you have someone's email address, it's much easier to do something inappropriate.
Well, what's interesting, and I don't think I've ever told the story publicly, but I think it's fair that I should say it with you. Uh, during that time, it was almost like a numbers game because you didn't know what the person looked like, so you just sent a whole bunch of emails out and you would wait to see what the response is. And I found out later on that not only did I email my ex-wife, but I sent the exact same email to her twin sister, right? And the two of them had a discussion about who was going to answer, right? They're like, 'Who wants him?' Uh, because they both liked the description, but they got the exact same email. So, my ex-wife ultimately won that discussion and she ended up going out with me, which led to us being married for like 14 years. Uh, you know, unfortunately, we, you know, I filed for divorce two years ago. And uh, you know, when people ask about the story, I said, 'Well, I got a Craigslist wife. What do you expect?' Joke about that.
I'm sorry to hear it didn't last.
That's okay. It's not your fault. But you know, we did have a lot of good memories. So, thank you for launching a website that changed my life.
