If you've never been to the online classifieds website known as craigslist.org, your first visit is likely to be a disappointment - especially if you've read some of the press about how successful the site is, how it's killing the newspaper business, how the service is worth billions of dollars and so on.
The site gives new meaning to the word "plain" (not to mention "cluttered"). It's really just a series of lists - of cities, categories and links. According to chief executive officer Jim Buckmaster, who was in Toronto last week, some people say the site has "all the visual appeal of a pipe-wrench."
Google started with a visually unimpressive website too, however, and created what has become a multibillion-dollar search colossus. In many cases, simple works. And when all you're looking for is a place to sell your couch or find an apartment, fancy design and widgets don't make much difference.
In many ways, the site is the ultimate example of what the Web allows businesses to do. It was started on a shoestring by one man - Craig Newmark -- working out of his apartment, who built a vast user base thanks in large part to the "network effect" (users bring in more users) and has become a profitable operation without ever having to raise money by selling shares or soliciting venture capital.
If the lack of a nice-looking website has kept anyone from using craigslist, it's difficult to tell. The service gets more than seven billion page views a month, and has 10 million unique users. By comparison, the New York Times website gets 450 million page views per month and about 13 million unique visitors.
Although it is a private company (controlled by management) and doesn't release financial data, it's likely that it is also wildly profitable - without ever wanting to be - in part because it is still a relatively tiny company, with just 24 employees located in a renovated house in San Francisco.
In 2004, the site started rolling out fees for agencies that do professional job listings in half a dozen of its metropolitan markets - as a way of reducing what its users complained were increasing volumes of job-listing spam - and almost accidentally began bringing in revenue of about $25-million (U.S.) a year (it charges $25 per listing, while other sites charge more than 10 times that amount).
That almost certainly means tens of millions of dollars in profit. One analyst - no doubt salivating at the thought of helping to take the company public or shopping it to venture capitalists - estimated that if the site rolled out similar fees for jobs, apartments and other services to even half of its major markets (it is in more than 450 cities), it could generate revenues of $250-million a year.
That would theoretically give the company a market value as high as $2.4-billion, according to venture capitalist Nisan Gabbay, who runs a website called Startup Review. But craigslist - as if to frustrate its competitors even further - has said repeatedly that it has no interest in rolling out further fees, adding advertising or otherwise trying to "monetize" the vast user base it has built up.
In a keynote address at the recent Mesh Web conference (full disclosure: I am one of the organizers), Mr. Buckmaster talked about what many believe has been the secret to the site's success - a single-minded focus on the users, to the exclusion of virtually everything else.
Craigslist doesn't have a more visually appealing site, he said, because users haven't asked for it. It doesn't have ads for the same reason -- no one has asked for them (except the ad industry, presumably). And it hasn't added video to its listings because, well, users haven't asked.
To make the company even more infuriating for traditional businesses, the service doesn't have any sales or marketing staff .
How's that for a competitive nightmare: a company with a staff of just two dozen people, running a business that is likely worth at least a half a billion dollars (and growing), with profit margins of 40 or 50 per cent, no sales or marketing staff -- making money without even really trying.
Isn't the Internet great?