Jeffrey Greenberg on Technology Strategy

A number of startups have contacted me with plays to compete with Craigslist. Craigslist is dominant in providing localized exchange of goods and services. They are free, they have a huge brand and audience, and (from the outside) they appear to be a relatively efficient organization. The competing startups are either trying to out Craigslist Craigslist or they are going after parts of the whole by focusing on a particular commerce area, like rentals. Those that are going whole hog had better have not only superior features for entire range of commerce that Craigslist covers, but have to be just as consistent as Craigslist is in their usability. And Craigslist’s minimalist design, while it doesn’t do much, it’s easy to get and it’s consistent across the site. It’s a simple form for posting all types of requests — almost always the same no matter what is being exchanged. For a company to take it to a higher level of use and functionality a significant investment is required, and so far I don’t see any threats to Craigslist of this sort.

A better strategy I’m seeing now is from the startups that are those focused on just a particular commerce segment and doing it better than Craigslist. In the long run, they have a better chance in that they are better and free to the consumer. The “free” part of course is a tough business decision at any time, and especially now, but against Craigslist you have little choice. A couple of interesting players in this arena are: 11squarefeet which focuses on a new sub market of renting: office and desk subleasing, and okCupid which is free online dating done extremely well. Okcupid is alot of work and thus must have relatively high development costs so it remains to be seen if they can exist, but they can give Craigslist free dating a run, let alone Match, eHarmony, et. al. (Since an automated dating site (chemistry.com) matched me up with my ex-wife (really), I’ve been more than cynical of these…).

It remains to be seen whether an entrenched player like Craigslist can be removed by the strategy de jour: a mashup + better usability + a market-focus = success. Or do we really need to start investing in harder technology that raises the bar of service and efficiency. An example of such investment I’ve seen is Siri which attempts to up what can be done by using bleeding edge technology. This is an example of a number of AI-ish plays that are seeking to leverage advances in NLP . We may be reaching the end of Web2.0 when the strategy du jour is no longer so easy to succeed with. With that said, Craigslist, by being community focused, comprehensive, and free, is a tough combination to best by any means.

Tags: AI, Craigslist competitors, Siri, Startups

This entry was posted on Wednesday, November 19th, 2008 at 12:22 pm and is filed under Business Zeitgeist / Web 2.0, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.