VC - Presentations
1) WHAT IS YOUR VISION?
- What is your big vision?
- What problem are you solving and for whom?
- Where do you want to be in the future?
2) WHAT IS YOUR MARKET OPPORTUNITY AND HOW BIG IS IT?
- How big is the market opportunity you are pursuing and how fast is it growing?
- How established (or nascent) is the market?
- Do you have a credible claim on being one of the top two or three players in the market?
3) DESCRIBE YOUR PRODUCT/SERVICE
- What is your product/service?
- How does it solve your customer’s problem?
- What is unique about your product/service?
4) WHO IS YOUR CUSTOMER?
- Who are your existing customers?
- Who is your target customer?
- What defines an "ideal" customer prospect?
- Who actually writes you the check?
- Use specific customer examples where possible.
5) WHAT IS YOUR VALUE PROPOSITION?
- What is your value proposition to the customer?
- What kind of ROI can your customer expect by using buying your product/service?
- What pain are you eliminating?
- Are you selling vitamins, aspirin or antibiotics? (I.e. a luxury, a nice-to-have, or a need-to-have)
6) HOW ARE YOU SELLING?
- What does the sales process look like and how long is the sales cycle?
- How will you reach the target customer? What does it cost to "acquire" a customer?
- What is your sales, marketing and distribution strategy?
- What is the current sales pipeline?
7) HOW DO YOU ACQUIRE CUSTOMERS?
- What is your cost to acquire a customer?
- How will this acquisition cost change over time and why?
- What is the lifetime value of a customer?
8) WHO IS YOUR MANAGEMENT TEAM?
- Who is the management team?
- What is their experience?
- What pieces are missing and what is the plan for filling them?
9) WHAT IS YOUR REVENUE MODEL?
- How do you make money?
- What is your revenue model?
- What is required to become profitable?
10) WHAT STAGE OF DEVELOPMENT ARE YOU AT?
- What is your stage of development? Technology/product? Team? Financial metrics/revenue?
- What has been the progress to date (make reality and future clear)?
- What are your future milestones?
11) WHAT ARE YOUR PLANS FOR FUND RAISING?
- What funds have already been raised?
- How much money are you raising and at what valuation?
- How will the money be spent?
- How long will it last and where will the company "be" on its milestones progress at that time?
- How much additional funding do you anticipate raising & when?
12) WHO IS YOUR COMPETITION?
- Who is your existing & likely competition?
- Who is adjacent to you (in the market) that could enter your market (and compete) or could be a co-opted partner?
- What are their strengths/weaknesses?
- Why are you different?
13) WHAT PARTNERSHIPS DO YOU HAVE?
- Who are your key distribution and technology partners (current & future)?
- How dependent are you on these partners?
14) HOW DO YOU FIT WITH THE PROSPECTIVE INVESTOR?
- How does this fit w/ the investor’s portfolio and expertise?
- What synergies, competition exist with the investor’s existing portfolio?
15) OTHER
- What assumptions are key to the success of the business?
- What "gotchas" could change the business overnight? New technologies, new market entrants, change in standards or regulations?
- What are your company’s weak links?
Tuesday, June 29, 2004
Sunday, June 27, 2004
Evolution of Corporates
The trailblazing corporate superstar will become a thing of the past. And follow-the-leader is a game companies will no longer play. The path to success will be paved by teams
We are all angels with only one wing.
We can only fly while embracing each other.
-- Luciano de Crescenzo
The 20th century Italian poet's metaphor wasn't about the 21st century corporation, but it might as well have been. The coming century will be unfriendly to superhero ceos who try to wing their companies heavenward by sheer force of will. Success will belong to companies that are leaderless--or, to be more precise, companies whose leadership is so widely shared that they resemble beehives, ant colonies, or schools of fish.
Today, democratic decision-making in corporations is still confined largely to factory floors and new-product laboratories, far from the top of organizational pyramids. That is hardly surprising. In a nation that loves superheroes, people cling to the myth of what management guru Warren Bennis calls ''the triumphant individual.'' The media celebrate ceos as larger-than-life individuals who single-handedly communicate a vision and lead the way, earning millions for themselves in the process.
Cool the hero worship. In the 20th century, the Soviet Union collapsed because its command-and-control economy couldn't keep up with the West's free market. In the 21st century, the same fate will befall companies whose CEOs attempt to control everything. In a world that is becoming ever more chaotic and dependent on brainpower, teams at the top will make more sense than a single outrageously paid CEO who sits behind a ''buck stops here'' plaque.
To see why, look to nature. You might assume a leaderless group of creatures would be ineffectual. Not at all. While one bee is merely a nuisance, a swarm is deadly. ''You only have to look at biological systems to see that there are no big hierarchical stacks,'' says Peter Cochrane, head of research at BT Labs. ''Everything is low and flat, very adaptable and very cruel.''
The Internet allows companies to be more like beehives because information can be shared horizontally rather than funneled up to the CEO's office and back down again. ''The nature of the process that built the Internet will inform everything that touches it. There's nobody in charge,'' says John Jordan, director of electronic commerce at Ernst & Young's Center for Business Innovation.
The beauty of such leveling is that decisions can be made instantly by the people best equipped to make them. Might that produce corporate chaos? Sure. But that's not necessarily a bad thing. Uniform thinking enforced from the top can cripple an organization. Silicon Valley knows that well: When programmers try to debug a piece of software, they intentionally isolate themselves from their neighbors so they won't duplicate each other's mistakes. Says E&Y's Jordan: ''When you debug, it's really good not to have the same assumptions and system as the guy next to you.''
LOSING GROUND. In the 20th century, succeeding was like climbing the Rocky Mountains. It wasn't easy, but the path was obvious. Success was a matter of executing on a well-established business plan: Every step up brought you closer to the top. ''Now, it turns out that the Rocky Mountains are fluid and moving,'' says BT's Cochrane. ''One minute you're at the top, next you're in a valley.''
Team leadership is ideally suited for this new reality. When the landscape is changing daily, it's crucial to react fast--something bureaucratic, top-down organizations don't do well. ''Most urgent projects require the coordinated contributions of many talented people working together. Whether the task is building a global business or discovering the mysteries of the human brain, it does not happen at the top,'' says Bennis, a University of Southern California professor and co-author of Organizing Genius.
Already, many companies are adopting work groups with no designated leader. In 1987, 28% of the largest 1,000 public companies boasted at least some self-directed groups. By 1996, 78% had some, according to research by Edward E. Lawlor III, head of USC's Center for Effective Organizations. The trend will only intensify as a generation of team-oriented managers climbs higher. Says Lawlor: ''I can see future generations of people getting to the top with more team experience--and being more willing to use it once they get there.''
Some companies have already gotten a jump on the process. Even General Electric Co.'s take-charge CEO Jack Welch makes many decisions collegially with a team of top executives. ''I couldn't do this job if I didn't have them,'' admits Welch. Says John Chambers, CEO of Cisco Systems Inc.: ''I learned a long time ago that a team will always defeat an individual. And if you have a team of superstars, then you have a chance to create a dynasty.'' That's one reason Chambers has two to three times as many people reporting to him as does the average executive in his company: It forces him to empower those directly under him with greater autonomy, because he can't possibly keep up with every detail of their work.
In the 21st century, the all-powerful CEO may not be powerful at all. Companies that thrive will be ''led'' by people who understand that in business, as in nature, no one person can ever really be in control.
The trailblazing corporate superstar will become a thing of the past. And follow-the-leader is a game companies will no longer play. The path to success will be paved by teams
We are all angels with only one wing.
We can only fly while embracing each other.
-- Luciano de Crescenzo
The 20th century Italian poet's metaphor wasn't about the 21st century corporation, but it might as well have been. The coming century will be unfriendly to superhero ceos who try to wing their companies heavenward by sheer force of will. Success will belong to companies that are leaderless--or, to be more precise, companies whose leadership is so widely shared that they resemble beehives, ant colonies, or schools of fish.
Today, democratic decision-making in corporations is still confined largely to factory floors and new-product laboratories, far from the top of organizational pyramids. That is hardly surprising. In a nation that loves superheroes, people cling to the myth of what management guru Warren Bennis calls ''the triumphant individual.'' The media celebrate ceos as larger-than-life individuals who single-handedly communicate a vision and lead the way, earning millions for themselves in the process.
Cool the hero worship. In the 20th century, the Soviet Union collapsed because its command-and-control economy couldn't keep up with the West's free market. In the 21st century, the same fate will befall companies whose CEOs attempt to control everything. In a world that is becoming ever more chaotic and dependent on brainpower, teams at the top will make more sense than a single outrageously paid CEO who sits behind a ''buck stops here'' plaque.
To see why, look to nature. You might assume a leaderless group of creatures would be ineffectual. Not at all. While one bee is merely a nuisance, a swarm is deadly. ''You only have to look at biological systems to see that there are no big hierarchical stacks,'' says Peter Cochrane, head of research at BT Labs. ''Everything is low and flat, very adaptable and very cruel.''
The Internet allows companies to be more like beehives because information can be shared horizontally rather than funneled up to the CEO's office and back down again. ''The nature of the process that built the Internet will inform everything that touches it. There's nobody in charge,'' says John Jordan, director of electronic commerce at Ernst & Young's Center for Business Innovation.
The beauty of such leveling is that decisions can be made instantly by the people best equipped to make them. Might that produce corporate chaos? Sure. But that's not necessarily a bad thing. Uniform thinking enforced from the top can cripple an organization. Silicon Valley knows that well: When programmers try to debug a piece of software, they intentionally isolate themselves from their neighbors so they won't duplicate each other's mistakes. Says E&Y's Jordan: ''When you debug, it's really good not to have the same assumptions and system as the guy next to you.''
LOSING GROUND. In the 20th century, succeeding was like climbing the Rocky Mountains. It wasn't easy, but the path was obvious. Success was a matter of executing on a well-established business plan: Every step up brought you closer to the top. ''Now, it turns out that the Rocky Mountains are fluid and moving,'' says BT's Cochrane. ''One minute you're at the top, next you're in a valley.''
Team leadership is ideally suited for this new reality. When the landscape is changing daily, it's crucial to react fast--something bureaucratic, top-down organizations don't do well. ''Most urgent projects require the coordinated contributions of many talented people working together. Whether the task is building a global business or discovering the mysteries of the human brain, it does not happen at the top,'' says Bennis, a University of Southern California professor and co-author of Organizing Genius.
Already, many companies are adopting work groups with no designated leader. In 1987, 28% of the largest 1,000 public companies boasted at least some self-directed groups. By 1996, 78% had some, according to research by Edward E. Lawlor III, head of USC's Center for Effective Organizations. The trend will only intensify as a generation of team-oriented managers climbs higher. Says Lawlor: ''I can see future generations of people getting to the top with more team experience--and being more willing to use it once they get there.''
Some companies have already gotten a jump on the process. Even General Electric Co.'s take-charge CEO Jack Welch makes many decisions collegially with a team of top executives. ''I couldn't do this job if I didn't have them,'' admits Welch. Says John Chambers, CEO of Cisco Systems Inc.: ''I learned a long time ago that a team will always defeat an individual. And if you have a team of superstars, then you have a chance to create a dynasty.'' That's one reason Chambers has two to three times as many people reporting to him as does the average executive in his company: It forces him to empower those directly under him with greater autonomy, because he can't possibly keep up with every detail of their work.
In the 21st century, the all-powerful CEO may not be powerful at all. Companies that thrive will be ''led'' by people who understand that in business, as in nature, no one person can ever really be in control.
Saturday, June 19, 2004
I am writing the regular life in Berhampur .This is the year 1989 -
I was in my third standard. From 8 PM onwards, the preparations for dinner used to take place. We[Mama & Raju , Sivaram, Inna atta, Bujji & Jagannath Babai & I] used to watch the regular DD serials like Buniad, Hum Log, MungeriLal Ki Haseen Sapney and very important are the Quiz shows.
Before dinner, Inna atta assisted by some of us used to spread the mattresses and prepare the bedroom ["Kotta Gadi"] for a pleasant sleep. We used to sleep in the order of I,mama, jagannath babai, Bujji Babai and Inna atta. Tata, Raju Babai used to sleep in the drawing room [savidi]. The doors were locked @ 8 in the night to play safe with Ravi Babai[He is no more ! But his toughts will live with each of us for a life time!].
Tata used to come @ around 10 in the night and by that time I used to sleep. Morning I used to get up @ around 6.30 -7 AM . By 7.15 if we dont get up, My grandpa used to come and wake us up. The huge place around well used to be a place for all of us to Brush our teeth n get fresh. Mama used to put hot water, It was the second year of the house Construction which did last for 9 long years. I did grow up during those significant 9 years observing the work and growing along with the metamorhing house.
The timber from the house construction was used in the fire place and Mama used to put hot water . Tata used to give all of us the hot water.
[Now the time is 8 AM]
Tata used to get ready with his shaving kit and I used to fear that scene a lot as it was my routine time for telling him the english phrases and mathmatical tables and other fundamental formulae he used to teach me.From 8- 8.30 It used to be a regular scene.At 8.20 either Ravi babai or Raju Babai or Mama would tune the radio to Some of the radio stations[madras or vizag] for the carnatic music and all of us used to get ready during that time. All of us used to get ready one after another in a short time.
Akka, my grand father's akka used to get up early in the morning. She had her idiosyncratic life of living. She used to cook our food early in the morning. Those days I used to have the breakfast and then either Bujji Babai or Sivaram Babai would drop me to My Aga street school.
Those days used to be great.Wish I could now go back to those times. The power of now is phenomenal. Every moment then Njoyed is still very fresh in me.. I love those moments..
Waiting eagerly for all of us to re-gather again. My marriage will be a great stage for all of us to get together and discuss all those fine moments of life so that all are rejuvented and get back to each other with those longing memories
I was in my third standard. From 8 PM onwards, the preparations for dinner used to take place. We[Mama & Raju , Sivaram, Inna atta, Bujji & Jagannath Babai & I] used to watch the regular DD serials like Buniad, Hum Log, MungeriLal Ki Haseen Sapney and very important are the Quiz shows.
Before dinner, Inna atta assisted by some of us used to spread the mattresses and prepare the bedroom ["Kotta Gadi"] for a pleasant sleep. We used to sleep in the order of I,mama, jagannath babai, Bujji Babai and Inna atta. Tata, Raju Babai used to sleep in the drawing room [savidi]. The doors were locked @ 8 in the night to play safe with Ravi Babai[He is no more ! But his toughts will live with each of us for a life time!].
Tata used to come @ around 10 in the night and by that time I used to sleep. Morning I used to get up @ around 6.30 -7 AM . By 7.15 if we dont get up, My grandpa used to come and wake us up. The huge place around well used to be a place for all of us to Brush our teeth n get fresh. Mama used to put hot water, It was the second year of the house Construction which did last for 9 long years. I did grow up during those significant 9 years observing the work and growing along with the metamorhing house.
The timber from the house construction was used in the fire place and Mama used to put hot water . Tata used to give all of us the hot water.
[Now the time is 8 AM]
Tata used to get ready with his shaving kit and I used to fear that scene a lot as it was my routine time for telling him the english phrases and mathmatical tables and other fundamental formulae he used to teach me.From 8- 8.30 It used to be a regular scene.At 8.20 either Ravi babai or Raju Babai or Mama would tune the radio to Some of the radio stations[madras or vizag] for the carnatic music and all of us used to get ready during that time. All of us used to get ready one after another in a short time.
Akka, my grand father's akka used to get up early in the morning. She had her idiosyncratic life of living. She used to cook our food early in the morning. Those days I used to have the breakfast and then either Bujji Babai or Sivaram Babai would drop me to My Aga street school.
Those days used to be great.Wish I could now go back to those times. The power of now is phenomenal. Every moment then Njoyed is still very fresh in me.. I love those moments..
Waiting eagerly for all of us to re-gather again. My marriage will be a great stage for all of us to get together and discuss all those fine moments of life so that all are rejuvented and get back to each other with those longing memories
Another Week End ! Some Achievements ! I am realizing that more I believe and step out of my comfort zone, I am doing better. To Do better ? I ask the question myself and No Way, I can loose the time.. I need to be more focused and get the best out of me..
Wow ! Goose pimples accomplished ! Was @ the top of the world when I was sitting next to James H Morris, the Co-Discoverer of Knuth-Morris-Prat string searching algorithm. Pras ! Did u ever think that you would be sitting next to Morris ? This is the beginning.. You have lots ahead !
Wow ! Goose pimples accomplished ! Was @ the top of the world when I was sitting next to James H Morris, the Co-Discoverer of Knuth-Morris-Prat string searching algorithm. Pras ! Did u ever think that you would be sitting next to Morris ? This is the beginning.. You have lots ahead !
Friday, June 18, 2004
Well,
Jus one more week gone by ! So many changes and life is jus going on .. To dream big and to plan big is on the agenda.. But I am fighting a battle to win my will,mind and at times laziness.
I was sitting next to James H Morris the co-discoverer of KMP String searching algorithm. Wow ! I am so previleged and blessed to meet these esteemed people. I need to do my BIG things. Life is getting better everyday ! I started winning.. No Doubt abt it.
I love it !
Pras @ the MindLabs
Jus one more week gone by ! So many changes and life is jus going on .. To dream big and to plan big is on the agenda.. But I am fighting a battle to win my will,mind and at times laziness.
I was sitting next to James H Morris the co-discoverer of KMP String searching algorithm. Wow ! I am so previleged and blessed to meet these esteemed people. I need to do my BIG things. Life is getting better everyday ! I started winning.. No Doubt abt it.
I love it !
Pras @ the MindLabs
Thursday, June 17, 2004
M-e-Mail...
with GMail's spread,the holy war of eMail began on the grounds of Information Superhighway. Yahoo!'s 100Mb enhancement is the first surprise to the users. Remember there is no place for the second rankers. Its all about users honey !
Well! On the long wait @ Castro for the Line 51 that takes me to Carnegie, I was analyzing some pattern of eMail and its uses. Ofcourse I started analyzing my use..
I use eMail for tacit knowledge and for storage...I was thinking of a PKMS with efficient searching. Now GMail is all about searching your mails with in a few second.
Does that mean Mails need no more be organized ? I was happy @ the first glare of this thought. I realized that human brains have unique patterns of organizing information so the challenge is to make the best use of "Information around us".
The law of diminshing returns holds good for the Information also and in the series of articles that will follow, I have made up my mind to write about the information & eMail..
with GMail's spread,the holy war of eMail began on the grounds of Information Superhighway. Yahoo!'s 100Mb enhancement is the first surprise to the users. Remember there is no place for the second rankers. Its all about users honey !
Well! On the long wait @ Castro for the Line 51 that takes me to Carnegie, I was analyzing some pattern of eMail and its uses. Ofcourse I started analyzing my use..
I use eMail for tacit knowledge and for storage...I was thinking of a PKMS with efficient searching. Now GMail is all about searching your mails with in a few second.
Does that mean Mails need no more be organized ? I was happy @ the first glare of this thought. I realized that human brains have unique patterns of organizing information so the challenge is to make the best use of "Information around us".
The law of diminshing returns holds good for the Information also and in the series of articles that will follow, I have made up my mind to write about the information & eMail..
Thursday, June 10, 2004
I am jus thinking of a community website for the my place.. want to come out with a whole new concept of communicating.. like ppl buying and selling to each other and shld be a virtual community outthere.. I need to do some thing serious abt it .. thinking.. Its been a long time since I blogged but..U bet.. Blogging is a healthy investment of time.. I know I have loads of work to take care of.. but Gee ! help me balance the loads.... getting back to the Project "Big" -
P ............ R............A.................S..........A..............N....N.....A
P ............ R............A.................S..........A..............N....N.....A
'Nerd Values' Help Propel Tiny Craigslist Into Classifieds Threat From [http://ojr.org/ojr/business/1086222946.php]
Following is the article on Craigslist.org[The entier bay community virtually lives here]
Craig Newmark started the community site as a hobby, but it soon became a San Francisco area institution for selling cars, getting jobs and finding sex. But just how much has it eaten into newspapers' traditional classifieds business, and can they win that back?
Mark Glaser
Posted: 2004-06-03
In San Francisco's bustling Inner Sunset neighborhood, you might find a coffee shop, a restaurant, a pharmacy or the offices of Craigslist.org. It's no wonder that the infamous community site is nestled in so well with the shops and hubbub along Ninth Avenue, because it has learned how to fit in and help the community more than any other media Web site in San Francisco.
Started nearly 10 years ago by soft-spoken software engineer Craig Newmark, Craigslist went from a small e-mail list of local events and parties to become a national and international phenomenon providing local residents with a cheap, simple way to sell junk, find a new job, or find a mate quickly. And as it has grown to encompass 45 cities -- with more to come -- Craigslist has resisted buyout offers and paid advertising while becoming a powerful alternative to daily newspaper and alternative-weekly classifieds -- especially in its hometown.
I stopped by the funky whitewashed basement and Victorian flat offices of Craigslist recently, and chatted with Newmark, whose eyes flitted to his computer screen from time to time to monitor activity and complaints that come streaming into his inbox. Though the staff has grown to 14, including a recent customer service manager, Newmark still spends 40 hours per week helping to deal with scams, community problems and other customer service details.
"I'm an engineer basically, my background is software engineering," Newmark said. "Our mindset is if we see something that needs to be done, we just do it. That's really it right there. People have said, 'How do you feel being a baby sitter?' and sometimes I have to fulfill that role."
The only income the site gets is from for-profit companies that run job listings in the San Francisco Bay Area, though Newmark said he is considering charging for similar job listings in New York City and Los Angeles. Though many people assume that the site is a nonprofit because of the dot-org in its name, it is a private, for-profit site that does not share its financial information with the public.
Craigslist CEO Jim Buckmaster told me via e-mail why they set it up as a corporation instead of nonprofit. "Since we have never solicited or accepted charitable donations, and since our primary activity does not qualify for tax-exempt status, it doesn't make a lot of sense for Craigslist to operate as a nonprofit. Also, nonprofit vs. 'for profit' status has nothing whatsoever to do with whether an organization is profitable."
Newmark considers Craigslist to be a "noncommercial" site, and says he has rejected many buyout or investment offers from venture capitalists and others. Plus, in 1997 Microsoft Sidewalk approached him about putting banner ads on the site -- something that would have supported the entire enterprise. But Newmark kept the site independent and has supported local charities or put money back into the site, he says.
Newmark's goal is just to live comfortably and not become a dot-com multimillionaire, which he may well have become if he had taken up one of those offers. Newmark calls his philosophy "nerd values," which he explains as making "enough for a comfortable living, at which point you do something fun like changing the world." Newmark laughs at the notion of being a celebrity or mayor of the virtual town (see more quotes from him below).
Howard Rheingold, futurist and author of "The Virtual Community" and "Smart Mobs," says that Craigslist is a great example of a dot-com that succeeded because it didn't take venture capital. "They grew organically," he said. "The fact that Craig is the real thing and is part of the culture. It started as an e-mail list. It wasn't some big company suddenly sponsors this service, it was word of mouth. It's the people themselves that populate it. Why should it change? As far as I'm concerned, it works."
Rheingold also noted that the site has revolutionized sex, both amateur and professional services, with its Casual Encounters and Erotic Services sections. Both offer simple ways to find discreet or indiscreet sexual rendezvous.
"Man, that's a big deal, I think," Rheingold said. "People in their 20s I know who have tried it have indicated to me that there's a whole culture around it. This isn't what drove Craigslist. What really drove Craigslist was finding a place to sell your couch. But it's certainly become a part of it."
The edgy, free-for-all nature of ads placed on Craigslist has led to a documentary movie called "24 Hours on Craigslist," which follows the trail of various people who have posted on the San Francisco site. Plus, the "Best of Craigslist" section includes a quirky collection of community rants, from "The Truth About Blind Dates" to "The Further Adventures of Scrooge the Cat." (Yes, it's a guilty pleasure of mine.)
How big a threat?
There's something so simple and pure about writing up a quick ad when you want free stuff for your young baby -- and then getting it. Or searching through ads for apartments or cars or whatever. But both Newmark and some newspaper chains downplay just how much of an effect Craigslist is having on their traditional classifieds business.
Newmark told me that many of the ads on Craigslist wouldn't be placed in newspapers at all, and come from a hipper online audience. Liddy Manson, vice president and general manager of jobs, cars and real estate for Washingtonpost.com, says that sites like Craigslist and eBay focus on consumer-to-consumer transactions, while the Post's bread and butter is business-to-consumer ads from car dealers, real estate brokers and recruiters.
"As far as I can tell, Craigslist has really taken over the classifieds business in San Francisco, and it's not there in (Washington) D.C.," Manson told me in a phone interview. "That doesn't mean it's not going to mature and grow and become more than it is today. It's only been in D.C. for 14 months. There's no doubt that Craigslist is making us think about our business differently, and making us think about what the hot buttons are for this community -- both in terms of what people are buying and selling, but also in terms of what makes a community come together around certain types of activities."
Manson thinks that the Post has a good head start on Craigslist in job ads, with somewhere between 16,000 and 21,000 ads on its site vs. Craigslist in D.C. having about 2,000 ads. The edge for the Post is with its detailed searches and strong presence in the market, according to Manson, though she admits that there are certain part-time and nanny jobs that work better on Craigslist.
"If you put a listing for a nanny on The Washington Post, you might not be prepared to get 200 calls in a week," she said. "The response can be overwhelming. There are certain types of recruiting where Craigslist or a much smaller community newspaper is an effective alternative."
Peter Krasilovsky, vice president and senior partner at Borrell Associates, helped write a white paper on online recruiting ads, and guesstimated that Craigslist brought in $6.7 million last year in job ads in the San Francisco Bay Area. That's a hefty chunk of the $40.7 million in all online revenues that Borrell estimates came in for the three big classified areas of real estate, automotive and jobs in San Francisco.
Buckmaster disputed the $6.7 million figure, saying that the estimate probably didn't take into account volume discounting, free nonprofit postings or collection failures. But he also said that overall Craigslist postings (other than forums) have hit 2.5 million per month, up 100 percent over last year, while the site has reached 5 million unique users per month.
Krasilovsky says that some newspaper execs have reason to worry about Craigslist, while others are using it as an excuse. "The Bay Area papers, especially the San Francisco Chronicle and San Jose Mercury News, probably feel like they've had their lunch money taken away by Craigslist," he told me via e-mail. "Given the recently depressed job market, there have been a lot of questions in the newspaper industry (as to) why they are not getting the recruitment dollars. Craigslist is a real convenient excuse, but is obviously just a part of the problem."
Though Krasilovsky makes a living giving business advice to newspaper sites, he still has a lot of admiration for the simplicity of Craigslist. "One thing about Craigslist -- it is real thin," he said. "That makes it easy and fun to read, easy to maintain. While newspapers have been adding feature after feature to keep up with (job site) Monster.com's own feature creep, there is Craig with these little text postings, and they do the trick. As a consultant, we are always advising newspapers to add features and diversify their classified revenue beyond listings. But Craigslist suggests maybe that isn't always the right answer."
The Tribe.net alternative
Another answer might be for newspapers to take a more experimental tack via social networking sites, where a visitor might buy something because it's sold by someone they know through someone else. That was the thinking when The Washington Post Co. and Knight Ridder invested money as part of a $6.3 million round of venture capital in startup Tribe.net, which has started to include Craigslist-like listings on its site.
Ross Settles, vice president of new business for Knight Ridder Digital, told me that he sees Craigslist as aggregating a lot of nontraditional listings that are usually under the radar. "It's a different quality of listing, but it's very targeted in nature," he said. "Their users are younger. Those listings are important and attractive to us because they tell us how the market is going, about activity that we haven't penetrated yet."
Settles said that everything was still on the table as far as future steps with Tribe.net, whether that might mean cross-promotion or cross-listing. He says that the Tribe.net investment was basically a way for Knight Ridder to look at "doing some of the same stuff that Craigslist is doing. We're pretty excited about it, but how do we capitalize and leverage that for our market? We should have some answers in the not too distant future."
So far, though, the social networking arena has been long on hype and short on revenues. Plus, the one thing that makes Craigslist so appealing is its noncommercial nature. "Last I looked, none of these (social networking) sites were making money," Newmark said. "Clearly there's a paradox there. Let's say you're a site about people connecting. If you're very obviously there to make some people a lot of money, that might send the opposite message."
But Newmark does want to bring in extra money to stave off a frivolous lawsuit. While he does want to expand Craigslist internationally -- and has considered more features for the site -- he understands that those moves would require translators or more customer service.
New media consultant Barry Parr, who pens the MediaSavvy Weblog, is an unabashed fan of Craigslist, having bought and sold thousands of dollars of goods there. He thinks newspapers have an opportunity to get back some of their lost classifieds business online, but it would mean destroying their print classifieds in the process.
"God, I love (Craigslist's) simple interface and the way their software works," Parr told me via e-mail. "Everyone I've met through Craigslist has been someone I liked doing business with. It's so freaking wonderful. Newspapers' Web sites are unspeakably awful by comparison. They have too many masters to serve and virtually all of them don't understand how to make a Web site work."
# # #
Craig Newmark Quotables
On his personal finances:
"I spent roughly three or four years doing software contracting, which was, in that period, very lucrative. It was '95 to '99. I live relatively simply. I kept my last car 10 years. Despite the occasional gadget, I was saving a lot. Fortunately, I didn't invest a lot (before the crash)."
On his constant vigilance against spammers and scammers:
"We need to do a better job dealing with offshore scammers because the Feds don't have the resources right now because they have bigger priorities. I've had these discussions with cops on all levels and we do take care of a lot of petty crap without involving them. Usually I can reason with someone and almost always that works. There are times when it doesn't."
On his favorite newscaster:
"Jon Stewart (on "The Daily Show") is my favorite source of news now. Only in fake news can you find truth ... Right now Kerry's best advisor is Jon Stewart. Stewart is making fun of Kerry's speaking style and Kerry needs to hear that because 30 years ago he was a good speaker, but he's been too long in the Beltway as a senator."
On journalism and his news consumption:
"Journalism is at the beginning of great changes through blogs and camera phones, especially when you can get live video camera phones. And advertising is changing -- not only classifieds but everything else. They have to learn fast to adapt to those. We're having an effect, but probably not that big of a deal. Google ads are probably a much bigger deal."
On his "open source" way of doing classifieds:
"Let's say the philosophy is the same (as open source). Doing things because they feel right and you know you've got to make a living, but you don't have to go overboard."
On being viewed as the community leader or virtual mayor:
"Maybe so, but I'm not going to believe my own press. That would be bad."
Note: Glaser Online will not run next week because its author will be on a much-needed summer vacation and business trip. The column will return to this space the following week on June 15 with a refreshed outlook on life.
Following is the article on Craigslist.org[The entier bay community virtually lives here]
Craig Newmark started the community site as a hobby, but it soon became a San Francisco area institution for selling cars, getting jobs and finding sex. But just how much has it eaten into newspapers' traditional classifieds business, and can they win that back?
Mark Glaser
Posted: 2004-06-03
In San Francisco's bustling Inner Sunset neighborhood, you might find a coffee shop, a restaurant, a pharmacy or the offices of Craigslist.org. It's no wonder that the infamous community site is nestled in so well with the shops and hubbub along Ninth Avenue, because it has learned how to fit in and help the community more than any other media Web site in San Francisco.
Started nearly 10 years ago by soft-spoken software engineer Craig Newmark, Craigslist went from a small e-mail list of local events and parties to become a national and international phenomenon providing local residents with a cheap, simple way to sell junk, find a new job, or find a mate quickly. And as it has grown to encompass 45 cities -- with more to come -- Craigslist has resisted buyout offers and paid advertising while becoming a powerful alternative to daily newspaper and alternative-weekly classifieds -- especially in its hometown.
I stopped by the funky whitewashed basement and Victorian flat offices of Craigslist recently, and chatted with Newmark, whose eyes flitted to his computer screen from time to time to monitor activity and complaints that come streaming into his inbox. Though the staff has grown to 14, including a recent customer service manager, Newmark still spends 40 hours per week helping to deal with scams, community problems and other customer service details.
"I'm an engineer basically, my background is software engineering," Newmark said. "Our mindset is if we see something that needs to be done, we just do it. That's really it right there. People have said, 'How do you feel being a baby sitter?' and sometimes I have to fulfill that role."
The only income the site gets is from for-profit companies that run job listings in the San Francisco Bay Area, though Newmark said he is considering charging for similar job listings in New York City and Los Angeles. Though many people assume that the site is a nonprofit because of the dot-org in its name, it is a private, for-profit site that does not share its financial information with the public.
Craigslist CEO Jim Buckmaster told me via e-mail why they set it up as a corporation instead of nonprofit. "Since we have never solicited or accepted charitable donations, and since our primary activity does not qualify for tax-exempt status, it doesn't make a lot of sense for Craigslist to operate as a nonprofit. Also, nonprofit vs. 'for profit' status has nothing whatsoever to do with whether an organization is profitable."
Newmark considers Craigslist to be a "noncommercial" site, and says he has rejected many buyout or investment offers from venture capitalists and others. Plus, in 1997 Microsoft Sidewalk approached him about putting banner ads on the site -- something that would have supported the entire enterprise. But Newmark kept the site independent and has supported local charities or put money back into the site, he says.
Newmark's goal is just to live comfortably and not become a dot-com multimillionaire, which he may well have become if he had taken up one of those offers. Newmark calls his philosophy "nerd values," which he explains as making "enough for a comfortable living, at which point you do something fun like changing the world." Newmark laughs at the notion of being a celebrity or mayor of the virtual town (see more quotes from him below).
Howard Rheingold, futurist and author of "The Virtual Community" and "Smart Mobs," says that Craigslist is a great example of a dot-com that succeeded because it didn't take venture capital. "They grew organically," he said. "The fact that Craig is the real thing and is part of the culture. It started as an e-mail list. It wasn't some big company suddenly sponsors this service, it was word of mouth. It's the people themselves that populate it. Why should it change? As far as I'm concerned, it works."
Rheingold also noted that the site has revolutionized sex, both amateur and professional services, with its Casual Encounters and Erotic Services sections. Both offer simple ways to find discreet or indiscreet sexual rendezvous.
"Man, that's a big deal, I think," Rheingold said. "People in their 20s I know who have tried it have indicated to me that there's a whole culture around it. This isn't what drove Craigslist. What really drove Craigslist was finding a place to sell your couch. But it's certainly become a part of it."
The edgy, free-for-all nature of ads placed on Craigslist has led to a documentary movie called "24 Hours on Craigslist," which follows the trail of various people who have posted on the San Francisco site. Plus, the "Best of Craigslist" section includes a quirky collection of community rants, from "The Truth About Blind Dates" to "The Further Adventures of Scrooge the Cat." (Yes, it's a guilty pleasure of mine.)
How big a threat?
There's something so simple and pure about writing up a quick ad when you want free stuff for your young baby -- and then getting it. Or searching through ads for apartments or cars or whatever. But both Newmark and some newspaper chains downplay just how much of an effect Craigslist is having on their traditional classifieds business.
Newmark told me that many of the ads on Craigslist wouldn't be placed in newspapers at all, and come from a hipper online audience. Liddy Manson, vice president and general manager of jobs, cars and real estate for Washingtonpost.com, says that sites like Craigslist and eBay focus on consumer-to-consumer transactions, while the Post's bread and butter is business-to-consumer ads from car dealers, real estate brokers and recruiters.
"As far as I can tell, Craigslist has really taken over the classifieds business in San Francisco, and it's not there in (Washington) D.C.," Manson told me in a phone interview. "That doesn't mean it's not going to mature and grow and become more than it is today. It's only been in D.C. for 14 months. There's no doubt that Craigslist is making us think about our business differently, and making us think about what the hot buttons are for this community -- both in terms of what people are buying and selling, but also in terms of what makes a community come together around certain types of activities."
Manson thinks that the Post has a good head start on Craigslist in job ads, with somewhere between 16,000 and 21,000 ads on its site vs. Craigslist in D.C. having about 2,000 ads. The edge for the Post is with its detailed searches and strong presence in the market, according to Manson, though she admits that there are certain part-time and nanny jobs that work better on Craigslist.
"If you put a listing for a nanny on The Washington Post, you might not be prepared to get 200 calls in a week," she said. "The response can be overwhelming. There are certain types of recruiting where Craigslist or a much smaller community newspaper is an effective alternative."
Peter Krasilovsky, vice president and senior partner at Borrell Associates, helped write a white paper on online recruiting ads, and guesstimated that Craigslist brought in $6.7 million last year in job ads in the San Francisco Bay Area. That's a hefty chunk of the $40.7 million in all online revenues that Borrell estimates came in for the three big classified areas of real estate, automotive and jobs in San Francisco.
Buckmaster disputed the $6.7 million figure, saying that the estimate probably didn't take into account volume discounting, free nonprofit postings or collection failures. But he also said that overall Craigslist postings (other than forums) have hit 2.5 million per month, up 100 percent over last year, while the site has reached 5 million unique users per month.
Krasilovsky says that some newspaper execs have reason to worry about Craigslist, while others are using it as an excuse. "The Bay Area papers, especially the San Francisco Chronicle and San Jose Mercury News, probably feel like they've had their lunch money taken away by Craigslist," he told me via e-mail. "Given the recently depressed job market, there have been a lot of questions in the newspaper industry (as to) why they are not getting the recruitment dollars. Craigslist is a real convenient excuse, but is obviously just a part of the problem."
Though Krasilovsky makes a living giving business advice to newspaper sites, he still has a lot of admiration for the simplicity of Craigslist. "One thing about Craigslist -- it is real thin," he said. "That makes it easy and fun to read, easy to maintain. While newspapers have been adding feature after feature to keep up with (job site) Monster.com's own feature creep, there is Craig with these little text postings, and they do the trick. As a consultant, we are always advising newspapers to add features and diversify their classified revenue beyond listings. But Craigslist suggests maybe that isn't always the right answer."
The Tribe.net alternative
Another answer might be for newspapers to take a more experimental tack via social networking sites, where a visitor might buy something because it's sold by someone they know through someone else. That was the thinking when The Washington Post Co. and Knight Ridder invested money as part of a $6.3 million round of venture capital in startup Tribe.net, which has started to include Craigslist-like listings on its site.
Ross Settles, vice president of new business for Knight Ridder Digital, told me that he sees Craigslist as aggregating a lot of nontraditional listings that are usually under the radar. "It's a different quality of listing, but it's very targeted in nature," he said. "Their users are younger. Those listings are important and attractive to us because they tell us how the market is going, about activity that we haven't penetrated yet."
Settles said that everything was still on the table as far as future steps with Tribe.net, whether that might mean cross-promotion or cross-listing. He says that the Tribe.net investment was basically a way for Knight Ridder to look at "doing some of the same stuff that Craigslist is doing. We're pretty excited about it, but how do we capitalize and leverage that for our market? We should have some answers in the not too distant future."
So far, though, the social networking arena has been long on hype and short on revenues. Plus, the one thing that makes Craigslist so appealing is its noncommercial nature. "Last I looked, none of these (social networking) sites were making money," Newmark said. "Clearly there's a paradox there. Let's say you're a site about people connecting. If you're very obviously there to make some people a lot of money, that might send the opposite message."
But Newmark does want to bring in extra money to stave off a frivolous lawsuit. While he does want to expand Craigslist internationally -- and has considered more features for the site -- he understands that those moves would require translators or more customer service.
New media consultant Barry Parr, who pens the MediaSavvy Weblog, is an unabashed fan of Craigslist, having bought and sold thousands of dollars of goods there. He thinks newspapers have an opportunity to get back some of their lost classifieds business online, but it would mean destroying their print classifieds in the process.
"God, I love (Craigslist's) simple interface and the way their software works," Parr told me via e-mail. "Everyone I've met through Craigslist has been someone I liked doing business with. It's so freaking wonderful. Newspapers' Web sites are unspeakably awful by comparison. They have too many masters to serve and virtually all of them don't understand how to make a Web site work."
# # #
Craig Newmark Quotables
On his personal finances:
"I spent roughly three or four years doing software contracting, which was, in that period, very lucrative. It was '95 to '99. I live relatively simply. I kept my last car 10 years. Despite the occasional gadget, I was saving a lot. Fortunately, I didn't invest a lot (before the crash)."
On his constant vigilance against spammers and scammers:
"We need to do a better job dealing with offshore scammers because the Feds don't have the resources right now because they have bigger priorities. I've had these discussions with cops on all levels and we do take care of a lot of petty crap without involving them. Usually I can reason with someone and almost always that works. There are times when it doesn't."
On his favorite newscaster:
"Jon Stewart (on "The Daily Show") is my favorite source of news now. Only in fake news can you find truth ... Right now Kerry's best advisor is Jon Stewart. Stewart is making fun of Kerry's speaking style and Kerry needs to hear that because 30 years ago he was a good speaker, but he's been too long in the Beltway as a senator."
On journalism and his news consumption:
"Journalism is at the beginning of great changes through blogs and camera phones, especially when you can get live video camera phones. And advertising is changing -- not only classifieds but everything else. They have to learn fast to adapt to those. We're having an effect, but probably not that big of a deal. Google ads are probably a much bigger deal."
On his "open source" way of doing classifieds:
"Let's say the philosophy is the same (as open source). Doing things because they feel right and you know you've got to make a living, but you don't have to go overboard."
On being viewed as the community leader or virtual mayor:
"Maybe so, but I'm not going to believe my own press. That would be bad."
Note: Glaser Online will not run next week because its author will be on a much-needed summer vacation and business trip. The column will return to this space the following week on June 15 with a refreshed outlook on life.
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