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Leap Academy with Ilana Golan
Craigslist Founder, Craig Newmark: How I Transformed a Simple Email List Into a Billion-Dollar Business
00:33:51
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- [00:01]
A
A nerd's gotta do what a nerd's gotta do.
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Craig Newmark. Today we get to speak with the founder of Craigslist. He would say that he's a nerd and amateur philanthropist. I would say that Craig Newmark actually revolutionized how people buy, sell and connect with their communities.
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I moved to San Francisco and I was starting to rediscover the Internet and a lot of people helped me with everyday stuff. And then I decided early 95 I should reciprocate. So I started a very simple events related mailing list. We hit a million page views per month. And so in early 99 I turned Craigslist the hobby into Craigslist the company. The hard decision I made had to do with offers and so on from a bankers and venture capitalists. They told me that they wanted to throw billions of dollars at me. I would have to do the usual Silicon Valley thing, monetizing everything and arguably selling out my community. So I decided.
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Craig Newmark. Today we get to speak with the founder of Craigsl. He would say that he's a nerd and amateur philanthropist. I would say that Craig Newmart actually revolutionized how people buy, sell and connect with their communities. I think it's incredible. And Craigslist disrupted traditional, classified and created a digital marketplace for billions of monthly page views. So that's incredible. Now Craig is involved with so many causes and we'll talk about it, but I want to take you back in time, if that's okay. And I want to know what shaped you to become the Craig that we see today.
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A
I've recently reflected on my background and how things started. And I realized it has to do with Sunday school. At the Jewish Community center in Morristown, New Jersey. Mr. And Mrs. Levin made sure that I had a pretty good grounding leading to a good moral compass. They taught me to treat people like I want to be treated. They taught me to know when enough is enough. And they taught me that now and then I should be my brother's keeper, my sister's keeper. And that defined my initial moral compass. It was reinforced at different points of my life. For example, in high school, I took a really good US history and civics class. Mr. Schulsky made sure I understood the role of the Bill of Rights in the Constitution and how you have to both simultaneously fight crime while respecting due process and those rights in the Bill of Rights. There's been other influences. Most recently, very importantly, there's this guy named Leonard Cohen who is effectively my rabbi. And his music also serves to reinforce My moral compass.
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B
I just love that. And I love that you reflected on what shaped you. I want to take you back in time to your childhood again. Like you said, small Jewish boy, New Jersey, if that's okay, to take you there, Craig, and tell me, if not, at age 13, you lost your father. I personally, when I lost my mom, I literally wrote how losing my mom changed my life. How did that heartbreaking experience impact you?
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A
I'm not sure. I've been thinking that I went numb on the event, on the whole situation. And I think I was already having some socialization problems. So as a way of retreating from people, maybe that pushed me pretty hard in the direction of poor socialization, inability to read social cues. Some of that's the essence of being a nerd in the original sense. It helped and didn't help that I was smart in the academic sense, good at science, technology, math. But I grew to be pretty poor at reading people, working with people in high school. And that nerd quality, that lack of social skills, that's still a problem for me even now. I mean, I've learned a lot of things the hard way. And I can simulate or fake social skills for a while, but not very long.
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B
I love how you laugh about yourself, about being a nerd. You even write about it on LinkedIn. And you still were able to change the world with your nerdiness. So we'll talk. And you continue to do that, which to me is mind blowing, but also, how amazing is that? But I do want to take you like you with that. You, you started working as a computer programmer, right? In like IBM and Charles Schwab. And how do you think did that help you get out of your shell? Like, tell us a little bit of how that shaped you.
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A
The biggest shaping experience in my professional career was being very serious about providing good customer service at Craigslist or the best customer service that I could. You may know that around the beginning of 2000, having realized that as a manager, I suck. Well, the deal is simply I realized that I should become a full time customer service rep. And I am a really good customer service rep.
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B
If you believe that you don't have enough emotional, you know, intelligence, how can you be so good at customer facing? Like you would think they're connected or no?
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Well, for me it was because while I was doing it, I had to treat people like I want to be treated. I guess in a way, I am my customer's keeper. And I followed through with that. And that developed far greater empathy in me. I'm still Working on it. I will always be working on it. But I'm in a much less bad shape than I was in the past, even if frequently. When it comes to social skills, I'm faking it.
- [06:34]
B
Well, you're faking it great. And I love that conversation. But let me take you even back in time. I don't want to jump to 2000 yet. We'll get there. I actually want to take you to kind of like, I don't know, around 95, 1995, and you started basically and email distribution for your friends, as far as I know, in San Francisco, focusing on local events. Talk to me about that period. What started this?
- [07:03]
A
Well, I had moved to San Francisco and I was starting to rediscover the Internet. I went around Charles Schwab saying, hey, here's what the Internet looks like. We're going to be doing business some way, eventually this way. So people helped me get into the Internet pretty quickly and understand what was happening. And a lot of people help me with everyday stuff, kind of boring stuff like neighborhoods, restaurants, stuff going on that I might like. And then I decided early 95, I should reciprocate, I should give back to the community. So I started a very simple events related mailing list. It just grew much faster than I thought. And I just figured once I had committed, I would respond to that and do what felt right.
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B
So you start with what helped you personally and you start an email list and you run also, I think I ran into. You run into all these funny limitations, like 250 address limitations and things that the Internet wasn't ready for. Mr. Craig? Yes, but Craig found a way. So talk to us. How did you decide eventually to jump all in and do this?
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A
That particular phase occurred. Let's see, the first three years, 95 through 97, it was just me. Everything kept growing. Hit some big milestones at the end of 97, like we hit a million page views per month, which back then was pretty good. Also, people were asking to volunteer to run the site. So I tried that through 98 and that failed. People who were really concerned about the site took me out to lunch and told me that I needed to go all in. I needed to be very serious. And so in early 99, I turned Craigslist, the hobby, into Craigslist the company. The hard decision I made had to do with offers and so on from bankers and venture capitalists. They told me that they wanted to throw billions of dollars at me. Well, I would have to do the usual Silicon Valley thing, monetizing everything. And arguably selling out my community. But I remembered Sunday school and what the Levins told me, Know when enough is enough. So I decided that the company would have a philosophy of minimal monetization. We would not make all the money we could, we would make a tiny fraction of that. So I proceeded on the basis and Craigslist became a real company in 99.
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B
So before that. Before that. So you have an email list. I'm still stuck there. You have just an email list, like how does that become so big? I know in 1996 you say, okay, maybe I need to create a web based platform, but how do you move from one to the other?
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Basically we provided a really useful service that was simple and fast, kept plugging away, maintained our values, and because of the unique time and place, the site just kept growing and growing. Jim having taken over, expanded it into different cities and that's worked out great. And we just kept our momentum, kept a connection to what our fundamental values were. And in my case, I just stuck with my moral compass. That worked. We did at one point, way back then, maybe in 99 or 2000, we took a couple ads out in HR magazines for job ads that felt wrong and didn't work. And so we just didn't do that. And I've never done it since.
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B
So your moral compass was there all along. And I do want to touch that as well because I think for a lot of leaders, yes, that can get wonky pretty quick, you know, with business. So a few things. So first of all, you have an email list, you run into a 250 address limitation or whatever, you realize that you have to create a web based platform for classified. You know, if you really want to do better, you decide to leave the name Craig's List. Right. Why? I mean it basically catches. But I want to hear that I need to rewind.
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A
In the middle of 95, that's when the address list problem occurred. I had to start using a listserv and there was a guy, Eric Theissa, who offered to let me use his server with a majordomo on it. Now I'm a nerd, very literal. So I wanted to call it San Francisco Events because it was still pretty much events then. And people around me told me they already called the thing Craigslist. They told me I had inadvertently created a brand. They explained to me what a brand is. I realized pretty quickly they were right. So we adopted that name. The only tricky part of it is that I insisted it be spelled as one word, all lowercase, to de emphasize The Craig in Craigslist.
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B
And you literally created a movement and I think this movement is still alive, which is pretty mind blowing. But in 1996. And by the way, congratulations. Craigslist is 30.
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That's correct. Surreal and a little horrifying. Woohoo.
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B
Very exciting. Huge congratulations. That is a very happy birthday. Okay, so it's 1996, you decide to move it into web based. You understand that Craigslist essentially is catching on in a big way. And I think it starts from covering categories like jobs and housing services and personnel. Right. How did you see it taking on? And were there air? Were there moments that you're like, what the heck am I doing? Why am I not enough in Charles Schwab? Like, were there like big moments that you're scared of this thing?
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A
Mostly no big moments. Mostly the site was about slow, steady growth, listening to customers, doing what felt right. Again, sometimes we are our customers keeper in the sense of brother's keeper. Just kept plugging away. And in a way that's the whole history of things. Slow, steady efforts. I guess in the race between hare and tortoise. We're the tortoise and I'm the tortoise and that's what works for me.
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B
Well, I will correct this a little bit, Craig, because a million page views was very rare at the time and I was in intel, so we, you know, knew how to measure these things and that was very rare. So you created something that was catching on really fast for that era. How did that feel and what does it feel like to scale something like this? I mean, I'm sure it comes with challenges.
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The whole thing feels again, very surreal in some respects fascinating and in some respects horrifying. But the commitment was in place. And even though I've retired, the commitment remains in place.
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But you did have some scaling challenges, right? There's fraud, when you scale, there's monetization issues. Right. So let's talk a little bit about. This thing is growing and you're probably starting to see fraud or things that you don't like on the site. What was it like and how did that make you feel and what did you do about it?
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A
Well, first, context. There have been problems along those lines. We found that they were artificially exaggerated by bad actors. We've tracked down some cases of people who were paid to greatly amplify the perception of crime. However, it really was an actual thing. So we started working with the cops like 20 years ago, maybe 25 years ago. They brought me to the oh, Secret Service based electronic Crimes task force meeting. When I talked to a lot of cops and they were unhappy that dot coms would not treat their subpoenas or search warrants seriously. I've remembered what I learned in US history and civics. You know, you got to fight crime, but you also have to respect due process and the Bill of Rights in the Constitution. And at that point I said to the company, hey, we got to do the right thing here. And we proceeded to do that, sometimes running pretty comprehensive operations with law enforcement, which was pretty expensive, but that was the right thing. What we didn't anticipate was one other effect related effect of scaling that people would attempt dirty tricks operations. We were completely unprepared for that. And even now, personally speaking, I'm not good at that because I'm basically honest. And an honest person is never a match for someone who's a dirty tricks operator.
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B
Oh, I agree. And we actually had a full episode with somebody called Don Arieli about hate in the digital world. But let's talk about this then. I mean, you're talking about all these things that you needed to spend money on. But on the other hand, you're very, very lean in Craigslist and you decide not to raise capital. How do you have enough capital for a team or to run this thing?
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A
As you pointed out, the company has never needed much because Jim runs the company pretty smart. And from the very beginning, people wanted to pay us to run ads. Typically, the people who were paying more money elsewhere were less effective ads. So our growth and our income kind of matched each other. So we were lucky in that regards. And we have a really good technology team who is really good at running the essentials really well.
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B
But I think one of the things that sets you so much apart, Craig, is that most people feel like they can't create an engineering platform or some kind of a platform without raising capital. And you, not only that, you created it kind of on your own and then you're able to scale it without raising capital. And which is very rare. I come from Silicon Valley. We don't hear a lot of these stories. I mean, the sandhill walk around the venture capital is real, right? So how were they scary moments like, like, I don't know how I gonna pay the bills, I don't know how I gonna pay salaries or not really. Like how was it?
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We got lucky from the very beginning. Growth ramped up slowly enough and income ramped up a little better. That was never an issue. Also a factor is luck in that in the first years we could Run on one server. And then over time, with really good technology help, we learned how to run the company on multiple servers. For what we accomplished, there's still pretty small server farms involved. But the deal is that I guess in part we got lucky starting in the right time and place.
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B
But you somehow knew that this you want, this is the trend. Like, this is something that you want to start and grow.
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Somehow I didn't know. I just followed my commitments and that worked out.
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But in 2000, you take, if that's okay, to go there, you make a very interesting decision. And that basically is to step down as CEO and to let Jim run the company. I think for a lot of company, a lot of founders, this would have been a very, very hard decision to make. Can you walk us through, Craig a little bit? What was the reason and did that come with a lot of anxiety or not?
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Into late 99, I was beginning to get the sense that I wasn't up to the job. Like I say, I realize that as a manager, I suck. People helped me understand that. And then I looked around in the industry, other industries, but also or mostly the computer industry, and I could see how sometimes someone who's good at starting something is really bad at growing it, scaling it, and making it real. So by that time I had hired Jim to lead technology, realized that he would do a better job than me. So I promoted Jim into that position. I went into full time customer service. And again, I'm a really good customer service rep. And even nowadays in philanthropy, I still do customer service. Maybe not that intensely, but I still am committed.
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B
And what I think I noticed all along, and there's a theme there was you, Craig, even with you wanting me to introduce you as just basically a nerd and amateur philanthropist, like, there's basically no ego that I can see. And if there's no ego, it doesn't bother you to be a customer service rep suddenly when somebody else is running essentially your baby? Am I right? Like, how do you explain it?
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A
Otherwise I'm going to disagree halfway. I do have an ego. I even have the occasional little bit of vanity. It's just that my ego is in fairly good balance with what I perceive as real. And I will listen to people. I have no yes men around, so people will tell me when I'm making mistakes and I need to do better. Remember? Oh, at the end of 98, people told me that I had to make the thing into a real company. So I listened to people and I followed through. Towards the end of 99, people told me that as a manager, I'm just not up to the job. And I listened to them and acted accordingly. And even now, I listen to people, even when it comes to painful lessons, because there were people who tried to explain to me that we were getting hit by dirty tricks because no good deed goes unpunished. And that, well, I know I need to learn. I needed a lot of help when it came to this kind of thing. I needed to admit it was a problem that took me two years, which, as a human engineer and nerd, two years isn't so bad for me to learn that. And now I have learned it. And frankly, I apply that lesson literally every day to my philanthropy.
- [22:16]
B
Because, again, a leader is someone that knows how to listen. And even though you present yourself as a nerd, you're truly listening to people. And again, sometimes you'll do it more immediate, and sometimes it will take some time for it to absorb and then execute on it. But, I mean, you're definitely receptive and you are very passionate. I mean, since 2001, as far as I could see, you're basically very passionate about Craigslist foundation and philanthropy. And, you know, cyber is a big piece of it. Do you think it came from those days in that people warned you?
- [22:53]
A
Well, that started when I was in school in the mid-70s, when I was interested in computer security from kind of an abstract point of view. And until the last several years, my interest in cybersecurity would come and go. I was paying attention to things. Maybe not enough attention to things, but as I started working with people who were all about protecting the country, I realized that cybersecurity was a big issue for us. I started working with veterans, various veterans groups. I've been working with groups that support the families of active service military members. And that all, I guess, rang some kind of internal alarm. It drew my attention to the need to help protect the country, just like vets and active service members are doing. So the least I could do is apply my resources to something that I knew a little about, cybersecurity. In retrospect, that's not much different than what my parents and the whole country did in World War II. The country was under attack, and people did what they could to help protect it.
- [24:09]
B
So you're taking, I mean, you're essentially working on this for 20 something years, right? And you're basically. Every time it's different causes, but you're huge on, you know, anything from cybersecurity to, like you said, vets and military families. I saw. I saw things around diversity. And I saw a few really interesting sites like Blue Star Families, et cetera, the Bob Boudruff Foundation. Right. So let's talk for a second about them. But also, what's your why, Craig? I mean, you could be on the beach all day slurping, maybe mojitos, like, whatever. Why drive these amazing causes?
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A
I guess as a nerd, I have a very strong sense of mission and a very weak sense of fun. I don't know how to do fun in the way that most humans do, and I'm happy with that.
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B
So this is your fun? So contributing drilling into cybersecurity and what it can do to America and how to defend from it, this is your fun?
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A
It is. It's fulfilling my sense of mission. I mean, I do some things which are not mission focused. I watch a lot of tv, I read a great deal, and unfortunately, I enjoy food a bit much. For whatever reason, food is delicious. And I have a problem stopping, which is not a rare problem. But anyway, it's the sense of mission which drives me.
- [25:46]
B
Amazing. So what do people, if they're listening, what do they need to know about some of these causes that you're so passionate about? Whether it's in the cybersecurity or the vets or the military families, what do they need to know?
- [25:59]
A
Well, the easy part, if you want to support military families, take a look at what Blue Star Families is doing. I've basically outsourced all my support to them for military families. If you're interested in helping vets and their families, take a look at what the Bob Woodruff foundation is doing. I've outsourced similarly to them. More difficult is, when it comes to cybersecurity, we're working out a major PR campaign. Basically, we need to tell everyone in the country why they need to be concerned with cybersecurity, because you got to know what you can do to protect yourselves and your families. You probably want to protect your job, since if your job goes away due to a ransomware attack or something, you're kind of screwed. And I feel everyone should see what they can do to protect the country. So we're building an effort to tell people why they should care and then have good recommendations as to what regular people can do to protect themselves and their families, their job, and the country.
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B
And I love that. And you have. I mean, there's a lot of, especially in Israel, there's a lot of different cybersecurity companies and adventures and startups around it. Is that something that you're passionate about? Is that something that you're jumping in to study more, to learn more about the trends and what's going on? Like, how are you up to date with everything?
- [27:28]
A
I'm passionate about helping regular people protect what needs to be protected. I'm not involved in the industry directly, not with any specific companies. I think I would like to do more for the cybersecurity industry in Israel. I just can't figure out how to get started.
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B
Well, that's good for me to know. I mean, I'm going to meet the president and the former prime minister in a few weeks. So definitely something that could be interesting in a lot of the venture capital. So we'll definitely talk. But Craig, if you are talking, you know, our audience are people that your story is like a dream, right? I mean, they're like, I don't know, 30 to 65 maybe, and they're saying, how can I do more in my life? How can I be more fulfilled? And I have this big mission and this big vision of myself. I want to do more. What would you say to them? I know you feel a lot of it was luck for you, but I also know there's probably trazillion decisions that you did right, whether you realized it or not. What would you say to these people that just want a bigger life?
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A
Decide what matters to them, both professionally and in personal life. The tikkun olam thing really works for me. The idea that there are some real things one can do to help repair the world. In my case, I've now focused on a few areas. I used to do a lot more, but again, it's now cyber vets and military families. And that works. It works for the country now. And then I'll do other indulgences. Like I actually really do support pigeon rescue. That's because I love birds and I have a sense of humor. I'm now negotiating for another photo op for a pigeon rescue group. I'm afraid I'll be very much indulging my sense of humor there, but that's all I know about. Because in my professional life, I, in any of my success has been accidentally being in the right time and place, making me the forest gump of the Internet. And that works out.
- [29:34]
B
I love that you call yourself that. And I think one of the things, Craig, that I think will be very, very interesting also to the listeners is you kept going on things that you're just passionate about. You didn't start from, oh, I need to be a billionaire and I want to create this big thing you just started, you know, like, I just. I want to do a list, and I want to solve somebody's problem, and I want to solve my own problem. And. And then you kept going. And then, like, I'm passionate about cybersecurity. Great. Let me just go into it and just kind of, like, understand it a little more. You're passionate about something, and it kind of makes you go all in on what made you go on necessarily have a mission for vets and military families. Like, where is that coming from? It's usually something engraved with you.
- [30:24]
A
I seem to be drawn to some areas when they start making sense to me for vets and military families. The only theory I have is that I grew up. I was in high school during the Vietnam War, and I saw returning soldiers being treated very badly, and that was wrong. I was very naive back then, didn't understand the war, but I could see people being treated really unfairly. That led to that. My early work in cybersecurity predisposed me to that. And then when I saw the need as a matter of protecting the country, that clicked in. I've done some other stuff, too, with very varying degrees of success. I think I can say that my existing efforts for cyber vets and military families, those are succeeding, and they will succeed even more over the next decade or two, hopefully. So that winds up pretty good. And I feel that I will have stunning success with pigeon rescue.
- [31:26]
B
I love that pigeon rescue. So maybe last thing that you would kind of say to our audience or people are listening to you, inspired by what you're accomplished and what you continue to accomplish, what would you say to them?
- [31:41]
A
You start by treating people like you want to be treated, and a lot flows from that, including good customer service or the best you can possibly provide given your business model. And if you stick with that, that's pretty good.
- [31:57]
B
Craig, seriously, I love listening to your story. I love how humble you are and how true you are, and I find it extremely inspiring, especially because there's a lot of leaders that could use a little bit of humbleness. So thank you, Greg, for sharing all your wisdom.
- [32:17]
A
I appreciate it. But it's not so much humbleness. It's just that a sense of what's real. Keeping control of your realness is a really big thing. But like I say, a nerd's got to do what a nerd's got to do.
- [32:34]
B
So from one nerd to another, Craig, it was amazing to have you on the show.
- [32:39]
A
Thanks. I appreciate it.