Tag Archives: disrupt

Do you like the new Facebook app?

Many are in love with the new Facebook app and giving it high ratings. “Its App Store review average has risen from 1.5 stars to 4 stars in just three weeks since relaunch, Facebook told reporters at its headquarters.”

 

source: TechCrunch

 

And apparently we were all chomping at the bit. Half of all iPhone users “updated their apps in just four days”. I was one of them and I love the new app’s speed. The old one was so slow I ignored it and placed it on my last page of apps.

Listen to Mark Zuckerberg and Mick Johnson, mobile product manager, talk about these developments at TechCrunch Disrupt, and learn about how Facebook went native to solve its mobile problem.

Is Craigslist is done for? (nope)

This is part 2 and it messes everything up.

Part 1 was incredibly convincing and most of us bought the argument, hook-line and sinker.

We were ready to write-off Craigslist.

Now, I present the counter-argument. This piece will completely change your mind. It will challenge you to re-think everything and in my case, put Craigslist back on the map for good.

Enjoy.

PS – It works better if you read the original piece first: Is Craigslist done for? (yep)

From Quora

Josh Hannah argues that the premise of this question is false and that Craigslist “has been disrupted.” He mistakenly confuses “competition” with “disruption.”

Craigslist has not been disrupted.

Disruption means to “drastically alter or destroy the structure of (something).” By definition this means that disruption is easy to spot. Something new comes along and crushes an existing business model or technology or product.

Here are a few examples:

Business model disruption:

  • Craigslist disrupted classified advertising
  • CPA disrupted CPM
  • Free has disrupted numerous other industries (telecom, media, etc)

Technology disruption:

  • Cars disrupted horses
  • Downloadable media disrupted CD’s & DVD’s
  • Digital photography disrupted film

Product disruption:

  • Facebook disrupted MySpace
  • Google disrupted AltaVista & co

In every case:

  • The disruption happened suddenly (within a few years)
  • The disruptor’s value proposition was unambiguous
  • Usually a single replacement (business model, tech, product) filled the void

This is what disruption looks like with websites:

This is what disruption looks with offline businesses:

This is not disruption:

…Nor is this:

Josh argues that:

“Bad sites with network effects show much slower decay in use than they should based on their absolute quality. (think eBay.) Bad sites who price most of their product at free show incredibly slow decay in use. (think Craigslist).”

All of this is true, but this is precisely why Craigslist is not being disrupted: It already benefits from enormous network effects, which aren’t being replicated by its myriad competitors. Even if all the sites below shared the same audience as Craigslist (they’re not even close), these users would be split across 30 different sites:


Yes, plenty of people are picking apart categories and trying to improve upon the product, the UI, or the way the information is presented. This has been happening for years and many of these companies have gone under. If you think about it, these companies aren’t really competing directly with Craigslist because Craigslist–unlike every site above–is free.

To argue the image above is indicative of disruption is to misunderstand why Craigslist is successful. How many companies compete with Google in search, advertising, social, apps, mobile? Sheer volume of competition does not signal disruption.As I wrote previously, Craigslist benefits from a killer product/business model combo that protects it from the effects of these startups:

Craigslist = Simple + Free + Network effects + Anonymous

It’s very, very hard to compete with something that gets the job done well enough and is free.

People can criticize the product/UI/search all day long, but minor tweaking is not going to disrupt Craigslist–particularly if it happens across 30+ fragmented sites. Most people have a status quo bias…they must see substantial and compelling benefits to changing their behavior. They won’t learn about all the sites listed above just so they can get a slight UI improvement when they want to unload their couch or casually rent a hooker. (Frequent escort renters might disagree with me :).

Even if someone rolled all 30 of these sites into one competitor with better features, UI, search, etc it’s still unlikely to succeed because of the power of network effects. Craigslist has them. The other guy don’t. And no one can afford to buy these network effects unless they plan to charge for their services. And if they plan to charge then they’re back to square one.

In summary (and forgive me for mashing these answers together):

This is a winner take all business that’s supported by incredible network effects, great brand equity, a degree of trust and familiarity. No upstart is going to unseat Craigslist without a huge & foolish capital investment. The only way Craigslist will be disrupted is if consumer behavior shifts radically away from free, online, and anonymous.

Is Craigslist is done for? (yep)

This is part 1 of 2 which proves that Craigslist is already dead, or in the midst of a slow death.

From Quora

Craiglist has been disrupted, it’s just not obvious yet. And the world will be a better place for it.

Craigslist has fewer unique visitors today than it did at this time in 2009.

Bad sites with network effects show much slower decay in use than they should based on their absolute quality. (think eBay.) Bad sites who price most of their product at free show incredibly slow decay in use. (think Craigslist). But make no mistake, it is happening.

The evidence of their poor quality is so obvious it’s hardly worth stating. Suffice it to say, if I’m looking to rent an apartment, it would be nice not to see the same listing reposted every day, and having to re-read it and figure out if I’ve called them before. It might be even nicer to view them on a map, or god forbid have new and relevant listing emailed to me.

Sites like Oodle have tried to take it head on with a superior interface but have been unable to displace them. Sites like Kijiji have been launched by eBay, or OLX, which is distributed on other people’s platforms with large traffic, have tried to leverage other sources of traffic to combat the critical mass.

Generally speaking, Craigslist has been “good enough” to not be disrupted head-on. Nevertheless, the world moves on, and the gaps in their product (due to a stubborn obstinate refusal to invest in technology) grow wider and wider. As tablets, smartphones, etc disrupt, and craigslist doesn’t invest in those platforms, the feature gap grows wider.

The disruption that has happened has occurred on a category-by-category bases, as this graphic by Andrew Parker (http://thegongshow.tumblr.com/po…) shows:

StubhubAirbnbEtsy have built big businesses in some of these categories, and floods of new startups try to pry off pieces (TaskRabbit, many others).

I have derived a lot of utility out of Craigslist over the years, and it has all come free, so I am grateful for that. But the site reportedly pulls in more than $100M in revenue a year (What is Craigslist’s revenue?) , has only a few dozen employees, continually under-invests in technology and does not innovate. I don’t think Craig’s a bad guy, but he’s harvesting $50M a year into his pockets and not improving the site. In ten years I think Craigslist will be an afterthought, whereas if he reinvested half of those profits into technology and product, it would have a real shot to be a category leader.

Update: Do you think Craigslist is done for….if so Part 2 is now available and it will change your mind – Is Craigslist done for? (nope)