Want to start the next billion dollar company? Look on Craigslist, says investor Jeremy Levine
As massively disruptive as Craigslist has been -- particularly to the newspaper industry which has lost an estimated $5 billion in revenue to the online classified site -- it doesn't exactly impress in terms of design, software, or user experience. Sure, its simplicity has always been part of its charm, and what it lacks in grace it makes up for in breadth of potential use cases. Furthermore, far be it from me to tell Craig Newmark how to run a company with over 20 billion pageviews a month and a valuation that's almost certainly in the billions.
Yet there's something explosive that often happens when a new company replicates a specific kind of transaction that occurs on Craigslist, but does so with an elegant layer of software and design on top of it. And according to Bessemer Venture Partners' Jeremy Levine, our guest at last night's PandoMonthly in New York, that makes Craigslist a well of inspiration for aspiring entrepreneurs searching for the next billion dollar idea.
Levine explains it so perfectly that I'll just let him take it from here:
You look at the homepage of Craigslist, there are 80 links. And each link is to a different category or topic and every one of those links is going to be a really big business. And there are already many of them. So there's a link for tickets on the front page of Craigslist. That is Stubhub, which is a multibillion dolalr division of eBay. There's a link for housing. That is Airbnb, which is a multibillion dollar business. And what Crasigslist does poorly is, it's difficult to do anything. And as you splinter these marketplaces off into their own sellers to be so damned efficient, it doesn't even feel like a marketplace anymore.
And the best example of it is arguably Uber. There is a link on the homepage of Craigslist or within any one city on Craigslist for transportation. I think it's even auto transportation. So you could actually for fifteen years now arrange for someone to pick you up and take you someplace on Craigslist. But no one did it, I mean a few people did it, but not like we use Uber.
Uber, you don't even realize -- I mean I'm sure all of you know -- but it's a marketplace behind the scenes where lots of drivers are competing to say, like, who's going to respond first to go pick up that passenger. But to the consumer it's such a seamless elegant experience that it has grown the market massively. So, literally, if you look at every one of those links on the homepage of Craigslist I think you'll see a business and many of them will be worth billions of dollars. The most impressive thing about this trend, and Levine alludes to this, is that these new peer-to-peer services aren't so much stealing business away from Craigslist as they are expanding the entire market. People who would have never dreamed of hiring a car on Craigslist use Uber every day. And that additive quality, where a company isn't just disrupting or destroying another industry but creating new business activity, is part of what makes companies like Airbnb and Uber so special.
So you heard the man, young founders. This time next year I want to see high-powered mobile apps for Missed Connections, gardening services, and kink enthusiasts. Get to work.