12 December

Anger and Schadenfreude at YouTube / Craigslist / Google / ...

When you can't beat'em, just bad mouth them

Business wimps are shouting again - this time about craigslist. Was YouTube a few months ago.

Calling them "communists" (NYT blog comments), 'trust-afarians’, 'anti-competitive' (MediaPost blog comments), and other silly things. They are mad as hell and wishing bad on CL. Why? Read more...

Simple. CL has taken the game away from them and they can't play anymore the same old game.

My dad taught me a few things: 1) there's nothing as bad as a bad mouth, and 2) cursing the future of others (what germans know as "schadenfreude") curses your own future as well. He was right on both counts.

I've found in business that its even worse than in engineering - it makes you blind to strengths and weaknesses. Nowhere was this more apparent when I tried my hand at doing the classic SOMA San Francisco "dot com" start-up.

One element that was common in the "dot com" failures, but totally lacking in the successes, was the understanding of the cost of customer acquisition. Most handwaved this number, while some did a "cost accounting" total absorbtion model. Many shrewd investors silently took this, and the accompanied customer adoption rate metric into account for estimating success - sometimes more than monetization metrics.

That's the key with CL and others. You want to shoot for the big win, where everyone chooses to do classifieds defacto by craigslist. Remember, at one time, nearly everyone only used Yahoo, Ebay, and Amazon for their specialty.

So you can push a message at cost to acquire customers, or you can acquire them from others at cost, ... or you can barter goodwill for them. What CL found, was that it was easier to be an advocate for their customer, generating enormous goodwill, and carefully using this they could attract customers that couldn't be sold to - no matter the marketing dollars, partnerships, or customer inducements.

It may be hard for these "ad professionals" to understand, but CL has massively expanded the market for classified advertising, by letting it be used more widely than newspapers or local circulars / ad boards. This necessarily comes with dropping the cost to effectively nothing.

To those who have made their numbers in this most difficult of selling times, where bludgeoning the customer and bribing them is a way of life, this is an incredible heresy. So upset, these same people who smarm on about how essential a large firms 'unfair advantage' is to doing business, moan on about how unfair CL's "good will" advantage is, as if its almost worse than murder!

CL also has an effective feedback mechanism, and controls applied by community. Like the same way Google ads have metrics better than print. But this could only come at the price of being always a reflection of its community. Ironically, this is also what many newspapers claim to be, but often aren't.

CL just proves you can have an unfair advantage with fairness!

How a businessman uses this "fairness advantage" is the true measured skill to watch for in seeing the CL advantage unfold.

Oh, and by the way, "Red State America", those WalMart loving types, are fast becoming CL addicts too. Guess they haven't learned about its communist leanings ... hah!

Posted by william at 03:20 | Comments (0) | Trackbacks (0)
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