Master Business Growth with Craig Newmark | Breaking 10-minute Insights

Hi, I'm Evan Carmichael. Welcome to another edition of Modeling the Masters. I believe that the fastest and most effective way to grow your business is to model the strategies of people who've already done what you're trying to do. So today we're going to look at how a man who started a website as a part-time hobby and had no formal business plan went on to create one of the top 10 websites in the world. This is the story of Craigslist founder Craig Newmark and the top 3 lessons that you can learn from his success. Craig Newmark is an American entrepreneur that started with an idea to inform people that turned into Craigslist, a multi-million dollar internet business. Newmark grew up in Morristown, New Jersey. His father, a salesman who peddled everything from food to insurance, died of lung cancer shortly after Newmark's bar mitzvah. His mother worked as a bookkeeper and struggled to make ends meet after her husband passed away. Neumark went to Morristown High School, where he became co-captain of the debate team and also an active member of the forensics club. He also started his own club, which met regularly to play the game Go. A few years after graduating college, Neumark worked at IBM in Florida, then for Charles Schwab in San Francisco. Neumark then began working as an independent consultant, taking on contracts with Bank of America, Sun Microsystems, and more. After several years of, of observing people on the internet and how they used online tools to help each other out, Newmark decided to start his own email service to notify people about cool arts and technology events in San Francisco. When Newmark's simple email listing reached over 240 subscribers, he could no longer carry on as he was. Even his CC field would not accept any more email addresses. Instead of shutting down, Newmark decided to move his list to a public server for all to access. He wanted to call his new website SF Events, for San Francisco events. But some of his closer friends suggested calling it Craigslist to emphasize the personal and down-to-earth nature of the list. In its first few years, Newmark ran the site as a part-time hobby, continuing his consulting work full-time during the day. He tried to bring on some volunteers, but they didn't pan out as Newmark expected. This is when he had an epiphany. He hired the right CEO, and Craigslist took off. Craigslist was earning over $10 million in revenues by 2004, Then in 2005, for a price tag of $15 million, eBay purchased a 25% stake in the company from a former shareholder. As of 2010, Craigslist was generating more than $122 million annually. By following his passion and recognizing that he couldn't do everything himself, Craig Newmark was able to turn his business from a part-time hobby into a globally recognized brand. To help you explode your business, Here are 3 action items that you can learn from Craig Newmark. Action item number 1: Get out of the way. A huge challenge for many entrepreneurs is recognizing what you should and should not be doing in your business. Focus your time and energy on the tasks that you bring the most amount of value to and delegate or outsource the rest. If you hang on to control of every task, you'll always be limited in how much your business and grow because you won't have enough time. One of the reasons why Craigslist has become such a success story is because Newmark has understood the importance of getting out of the way where and when it mattered. From content to the overall management of the site, he knew that it was not going to be him who always had the best answers. And when it counted, he was willing to step back and hand over the reins. Even though he was getting a lot of interest from IT venture capitalists, Newmark waited. Newmark's refusal to bring on a partner was not a power grab. He would hand over the reins where and when it felt right, and that time came in 2000 when he decided to promote entrepreneur Jim Buckmaster as CEO. That's when the company really began to take off. He knew he needed someone better than himself and decided to get out of the way. According to Newmark, frankly, as a manager, I kind of suck, but fortunately Jim didn't. He's a much better manager than I am. And because the guy who started a company is not always the right guy to lead it into the future. People that start companies and lack management skills, they fail. Getting out of the way is really important. We didn't care that the site wasn't being used how we had imagined. The internet is about inclusion. On the net, no one should feel left out. Action Item #2: Do things better. To reach success as an entrepreneur, you need to do things differently and better than your competition. You don't need to be better at everything. Pick something you can be really good at and be the best at it. Customers who care about that feature will come to you. Being average at everything is a recipe for failure. Being good at a few things that your customers really care about will rocket your success forward. The good thing about not having an adventure capitalist backing him meant that Newmark was free to do what he wanted with his company. He was free to innovate or to step back and let his users innovate for him. One of these inventions came in the form of the Best of Craigslist blog, ideally rounded up with the craziest, most hilarious postings that are left by users on the site. Newmark, who enjoys sifting through the online discussions on a daily basis, pulls out the funniest and most ludicrous postings from across the Craigslist network and compiles them into a daily blog. By letting users post this kind of stuff, Newmark was able to build readership and loyalty to the site. Having the ability to innovate allowed allowed Trixlas to do things better. According to Newmark, "We're innovative in many small ways. When we see something that could be done better, we do it. This is the notion of kaizen, the Japanese practice of continuous business process re-engineering. People can see that when they report a problem to us, we take it seriously. We want life to be fair, even though it's not. Sometimes you gotta be fast so you don't waste the time of others." Action Item #3: Listen. No matter how great a product or service you have, you'll always have to make changes based on what your prospects and customers say. Encourage their feedback. Better yet, start talking to them before you even have a product or service ready to sell. Build it around their needs. There's nothing like creating a business around paying customers to ensure that you get past the survival stage and go on to build a highly successful company. From its onset, Craigslist was born from the ideas and suggestions of its users. When Newmark began sending out his email list in 1995 to a small group of interested subscribers, almost immediately he began receiving emails back with suggestions for job and apartment listings they hoped Newmark would add to his list. Recognizing the importance of a feedback loop has been crucial for the success of the small company. In fact, it has come to represent one of its founding corporate values and one of the reasons why millions of people the world over continue to turn to their local Craigslist for help in making many of their most important life decisions. To this day, Newmark spends 6 hours of every working day on customer service, responding to the needs and requests of his users. According to Newmark, "From the very beginning, I was involved in talking to people, listening to people, and it hasn't stopped. The idea that people send me information, I'd ask them about it, listen, try to do something about it, and then ask for more feedback." Community people let me know that the volunteer operation was failing and helped me get out of denial. 90% of the function of our site is based on suggestions from users. So remember, get out of the way, do things better, and listen. To finish up this video, I wanted to share one of my favorite true stories about Craig Newmark and some of his best quotes. Despite his professional successes, Newmark struggled personally. He enrolled in ballet and jazz dance classes in order to meet women, only to wind up in a hospital with a hernia. No matter what most people say, one of the biggest reasons Newmark started Craigslist was because of his struggling personal life. He is a self-admitted nerd, which really turned off women. He thought it was a good idea to start helping people by starting an email service for others like himself. After finally getting too many people using his email service, Newmark started Craigslist. According to him, it's the reason he has the girlfriend he has today. He likes to say that Craigslist has prevented hurting himself just to meet women. Out of this struggle for personal contact, Newmark built one of the top 10 websites in the world. According to recent stats, more than 5 million people use the site every month, and more than 1 billion pages of Craigslist are looked at every month. Thank you for joining me for another edition of Molly and the Masters. If you like the video and you want to see more, please give it a thumbs up. It helps let me know that you guys like the videos, and I also love to hear what you have to think. If you want to leave a comment under the video, And thank you, and we'll see you on the next episode.