Is Craig's List Killing Innovation?
I was having a conversation over e-mail with a friend about the local startup eegloo. I don't know much about the company, so I won't take any liberties to elaborate; you can read their executive summary [PDF link] yourself.
What I do know is that they, and many, many others, are trying to improve the Internet classifieds market that Craig's List currently dominates. Craig's List holds their market share for a lot of good reasons. It's clean, simple, free and most importantly it has massive scale.
I don't have exact quotes, but Craig's List has made it clear that they aren't looking to innovate any further, improve usability or make significant changes to the site. That's not to say they aren't doing things like combating spam and fraud (to a limited extent), but they aren't looking to change the way their website works.
This poses a huge problem for innovation in online classifieds. How can you compete with the massive scale of Craig's List?
Newspapers are certainty failing at it, but we haven't seen them use innovation to try and upset Craig's List's lead. Newspapers are generally relying, wrongly, on their own reach and ability to go to market. In this example users have a choice: go to Craig's List and see a ton of listings, a ton good and a ton that are crap or go to your local paper and see a limited selection and still a ton of crap. At least there are more choices with the former.
So you have startups like eegloo that think they've found a better way. Maybe they have, but challenging the scale of Craig's List isn't even an uphill climb - it's upmountain.
My theory is that there are much better classifieds solutions out there, but Craig's List is killing them. They've basically frozen the market for the foreseeable future and I, just like everyone else it seems, haven't quite figured out how to break them.
I plan on doing it by skipping the destination site and creating highly scalable software that others can use to power their own idea of an innovative marketplace.
Labels: classifieds, craig's list, marketing, marketplace, startups, Togthr
posted by Andrew @ 10:42 AM Permalink
7 Comments
7 Comments:
One thing that I think could be interesting is coming up with a system that helps to efficiently manage Craigslist listing and contacts once you've sent out a bunch of emails, simply because I find it gets kind of crazy. It's also an external platform that piggy backs off of something people are already addicted to and using.
Hi Anonymous,
I think that there are actually quite a few companies that do this already. The problem is that the data set itself is full of bad results, flat out lies and an untrustworthy ecosystem.
I think that this would work much better if people had a persistent identity on CL. That way you could see someone's history of good deals - like the reputation system on Ebay.
Andrew
But then how does that relate to the separate platform idea. What had originally spurred that initial idea was that your post talked about platforms that give people that ability to creative their own solutions.
Also, are you imagining a reviews system that would work within CL? Or is there a way to organize this that does depend on CL (given that mentioned they are pretty much on cruise control)
"That Same Anonymous" who is really an actual person named Sean.
Hi Sean,
I'm not exactly sure what the answer is. I am confident of two things though. One, no one website is going to beat CL at their own game - at least not in the very near future. Two, if hundreds of niche sites are able to offer a better solution, targeted to their specific application, their combined reach can exceed CL's.
It's a tough cookie to crack, because I think the quality is more important than the scale and reach, but the fact is, no matter how much quality you have... no one cares if no one is there.
Andrew
I totally agree. I'm interested in seeing if eegloo.com ends up being a success (You read the interesting nextNY discussion, right?) and if not, why, but also, if so, why.
Also, one of the reasons I think CL stays around is, as you mentioned, definitely because it has critical mass but, I think, also because it's good enough. Yes, it could be made more efficient and more effective but I'm not sure that it's so "broken" to being able to be replaced. Does that concept of "good enough" make sense?
Does that sound like an anti-entrepreneurial instinct? I guess I just think there are more broken systems out there that are more open to innovative solutions replacing the dinosaurs.
I'm looking forward to your post on what your application idea is.
Cheers,
_sean_
Any chance you're the Andrew Bailey who's been corresponding recently with an entire neighborhood in Knoxville, TN? :-)
That would be me!
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