"Leave some money on the table" -- Craig Newmark, founder, Craigslist
How's this for contrarian capitalism: You build one of the most valuable sites on the Internet, a classified-ad market visited each month by 17 million people in 50 countries. You could be raking in $1 billion a year, by some estimates, if you charged every user for the service or littered the site with banner ads. Instead, you're content with a mere $30 million or so in revenue.
Craigslist founder Craig Newmark has left more money on the table during the past dozen years than most Web entrepreneurs see in a lifetime. But that's what has ensured that the cash keeps pouring in. Nearly all of the classified listings on Craigslist are free, and the site has never run ads of any kind. Its sole revenue stream is the $25 to $75 it charges for job postings in seven major U.S. cities, and the $10 per listing it charges New York City apartment brokers.
Users have come to rely on Craigslist and feel comfortable with its online community, allowing the site to steal classified ads from hundreds of daily newspapers across the country. "We've built a pretty good environment of trust," Newmark says. "You always have to respect your customers and follow through with the values you profess. If you do, the market will reward you. Some newspaper chains have forgotten that."