Craigslist

Bundle or unbundle: the only two ways to make money

Greg cites Netscape's Jim Barksdale: there are only two ways to make money, bundling or unbundling. Andrew Parker's classic 'unbundling of Craigslist' post showed the aggregate market cap of the spun-out verticals (Airbnb, StubHub, etc.) far exceeds Craigslist itself.

“It's a famous thing, I think in the '90s, that Jim Barksdale, Marc Andreessen's partner, co-founder of Netscape, basically said there's only two ways to make money. You can either buy bundle or unbundle. And just, you know, there's, I think, a post by Andrew Parker from— he was at Spark Capital, 2012 maybe. He wrote this post about the unbundling of Craigslist.”

Steal thisFind a big aggregator (Craigslist, Reddit), pick one high-energy vertical, and build a dedicated product for just that community.

Anything big enough is going to get unbundled

Greg's thesis: beyond unicorn status there's 'unbundling status.' Any platform large enough (Craigslist, Reddit, Facebook Groups) will inevitably have its vertical communities spun out into standalone businesses.

“My belief is that like there's unicorn status and then there's unbundling status. Anything big enough is gonna get unbundled.”

Sam rented Craigslist's old office for $500 — Craig's kitchen-table desk still there

Sam co-leased Craigslist's original San Francisco office, a sub-1,000 sq ft mixed-use house in the Inner Sunset. Craig Newmark had left behind his desk — a kitchen table too heavy to move — and ran a $500M+/year revenue company that called itself little more than neighborhood celebrities.

“Craig from Craigslist, Craig Newark, he actually left his desk there and his desk was a kitchen table. That was his desk. But it was too heavy to move. And so he just kept it there. So that's what I used.”

Craigslist was so frugal it withheld rent until the landlord delivered toilet paper

Craig Newmark's Craigslist ran one of the most profitable companies in the world yet was famously cheap. Per Sam's landlord, the lease required the landlord to supply toilet paper monthly — and the team would withhold rent whenever it arrived late.

“And they were so, he said they were so cheap and frugal that in the lease it said something like Emmanuel had to give them toilet paper each month. And every once in a while he would forget or not bring it on time and they wouldn't pay the rent until they got the toilet paper.”

Craigslist: ~$500–600M/year revenue, ~30 employees, never bought a company

Sam describes Craigslist's economics: it monetizes only job and car listings in select markets, keeps everything else free, employs roughly 30 people, has never made an acquisition, and pulls $500–600M a year — likely one of the most profitable companies in the world.

“They make like $500 or $600 million a year that way. And they've never bought a company. They only employ at this point, probably 30 people. So they just must, it must be one of the most profitable companies in the world.”

The Craigslist Unbundling: every category is a billion-dollar startup

Shaan explains the famous 'Craigslist unbundling' diagram: each category on the homepage (shared housing → Airbnb, apartments → Zillow/Trulia) spawned a specialized standalone company. Hundreds of successful businesses were built by taking one Craigslist feature and going deep.

“And so you can just see how many different businesses just realized that, hey, if there was demand for it on Craigslist, maybe we could build a specialized version for— of just that one feature. We could build a whole site of just that one service that it's offering. And there are like hundreds that are in this.”

Steal thisPick one category on a giant horizontal marketplace and build the best specialized vertical version of just that.

How Airbnb seeded supply with fake personas and Craigslist scraping

Shaan recounts Airbnb's early growth hack: they scraped Craigslist rental listings to auto-create Airbnb listings, then went further by emailing every Craigslist host as fake personas like 'Linda,' insisting they'd only book via Airbnb — pressuring hosts to join.

“They started creating fake personas, Linda or Cindy or whoever it was, and they would go and they would email every listing that was up for rent on Craigslist, and they would say, "Hey, I'm super interested in this."”