Why Is the Founder of Craigslist Suddenly Giving Away Millions? Here's His Highly Unusual Story

Let’s talk about billionaires–especially unusual, bootstrapped, secretive philanthropic-minded billionaires who describe themselves consistently as nerds.

It’s a small group. Its leader: the Craigslist founder Craig Newmark.

He’s been in the news recently after donating $1 million to the progressive magazine Mother Jones. That’s in addition to $20 million to the journalism program at CUNY earlier this summer, and millions for other journalism, veterans, and election protection organizations. 

I first met Newmark in 2011 when I was writing for the military newspaper Stars & Stripes, and he was putting up serious money for veteran causes. But I didn’t realize then just how financially successful he’d been until I saw these recent reports on his philanthropy activity.

That’s partly because Newmark, now 65, is scrupulous about not saying anything about his personal finances. (One published estimate, based on a bit of forensic analysis in Forbes last month, puts him at well over $1 billion.)

It’s likely that most of his stake is still in Craigslist, which is just as reclusive, but which analysts think pulls in about $1 billion a year, with a 75 to 85 percent profit margin. That means it’s an extraodrinary cash cow. 

And to put it all in perspective, and appreciate just how different Newmark is compared to all of the other billionaire tech entrepreneurs floating around Silicon Valley and the Bay Area, you need remember two points:

First, the fact that Craigslist is basically bootstrapped, and that it wasn’t originally supposed to be a company.

It grew originally from a single email that Newmark sent to to 10 or 12 people, as he told Inc.’s Jon Fine in 2016. He was 42 at the time, and had been working as an engineer at Charles Schwab (after 17 years at–wait for it–IBM).

And second, what life was like in 1995, when that first email went out:

  • Jeff Bezos had just moved to Seattle. He hadn’t launched Amazon yet.
  • Mark Zuckerberg was in 5th grade. Monica Lewinsky hadn’t even become a White House intern.
  • The #1 song in America was “Gangsta’s Paradise” by Coolio.
  • There was no PayPal. If you won an auction on eBay, you had to mail a check.

Newmark had literally no idea that the site could ever be so successful at first. And why would he?

He says its spare, old-fashioned design was mainly a result of his own limitations as a designer back when the whole thing launched. (“I didn’t know how to do fancy,” he told Fine.)

Perhaps most amazing is that when he did start to see the potential, he took an honest personal inventory and decided that he wasn’t the best person to lead the company he’d created.

He recruited and hired Jim Buckmaster in 2000, and let him take over as CEO.

“I was able, to some extent, to divorce my ego from my CEO role. And I’d had a lot of lessons,” Newmark said in his Inc.com interview. “I’d seen micromanagement be a big problem in the tech industry. I just saw lots of situations where people screwed up by interfering with people who could do the job.”

That’s really the story. No capital raises, no talk about disruption, no rush to find an exit.

Just a simple idea, the prescience to get in very early, the confidence to keep doing the same thing, and the self-awareness to get out. It was simple, really–and sometimes,  simple really does lead to success.
 

Related Posts:

  • No Related Posts