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from Financial Times, 17 September 2007

CEO who puts profits second

By Lucy Kellaway

Jim Buckmaster doesn't believe in maximising profits. He doesn't believe in management. He doesn't believe in brands. He doesn't believe in discussing money and he doesn't believe in smiling.

So much I had found out before meeting the chief executive of Craigslist, the internet classified ads company that claims to have twice as many users as Amazon - yet employs just 25 people out of a Victorian house in San Francisco.

Ahead of our meeting I gave myself two modest challenges: to make Mr Buckmaster talk financial and to make him smile. After all, he has enough to smile about. In 1999, he was an unemployed web programmer who posted his resume on Craigslist, where it was spotted by the site's founder, Craig Newmark, who offered him a job.

A year later he was made chief executive and now he is in the most delicious of positions. Hugely successful, he could also be hugely rich if he wanted to cash in his stake. Only he chooses not to. The high moral ground suits him better.

Mr Buckmaster ambles over to where I'm waiting at his chintzy Chelsea hotel. He is ridiculously tall (6ft8), is wearing flip flops, has dark hair with streaks of grey and is unshaven. He is decidedly attractive, so I'm disappointed that he directs his greeting and all subsequent remarks at the potted orchid over my left shoulder. He does not smile and his handshake is limp.

I tell him this interview slot usually goes to the CEOs of big companies like Nissan - whereas Craigslist is worth . . . how much? This attempt to extract some numbers falls flat.

"Er. We don't give out financial metrics," he says in a gentle, halting sort of way. "But I guess we have 25m users each month. I don't know how many customers Nissan has." These 25m users flock to the site to sell houses, second-hand sofas and their bodies - prostitution taking its place as a service for sale alongside ear candling and trumpet lessons. Most of these advertisers don't pay, though estate agents and companies placing jobs ads pay between $10 (£5) and $75. How much is raised that way he won't say.

The runaway success of the site is odd. The name Craigslist is awful and the design of the page - a long list of categories in tiny, cheap-looking type - is non-existent. "We try to stick with what the user finds useful," he explains.

So the site is clear and fast. Users don't like pop-up ads or big logos, so there aren't any. They have one principle - to please users - and they follow this doggedly. Nothing else gets a look-in.

But what about motivation? If you shun profitability, isn't it hard to get motivated? He disagrees.

"I get e-mails from people who have assembled their entire lives off of Craigslist. They've gotten their current job, spouse, the place they live, their friends and their dog off of this site. It's a direct sort of philanthropy. We are helping people through our service."

There are at least two ways that Craigslist is not helping. Earlier this summer the mayor of Atlanta was the latest to complain about the hookers who use it to tout for business. "The US is very fixated on matters of sexuality," Mr Buckmaster sighs. "It's mildly tiresome at times." He is equally unmoved by claims the success of Craigslist puts newspapers out of business and costs jobs. "Newspapers are still very profitable," he insists.

But if philanthropy is the aim, why not raise more revenue and give more away? "We don't have any genius for giving money away. It's difficult and time consuming. We give away 1 per cent of our revenues, and that is hard."

So is that about $2m? I ask, hopefully, but no dice. "That might lead to unfortunate back-of-an-envelope calculations," he says.

I show him a press cutting saying the company is worth over a billion dollars. "I don't really know if that's true or not," he says in a faraway voice. In any case, he says, it's hypothetical as it is not for sale. Isn't he sometimes tempted? "No, I'm not. We run the business the way we want to run it. We have lifestyles we are satisfied with. We find this very enjoyable and fulfilling."

Does he actually disapprove of money, I wonder.

"I'm not averse to riches or profit, but not at the expense of the user. We could raise more revenue, but I don't see any of us pocketing it. It would sit with the rest of the money in the bank unspent."

He spends his existing salary renting a nice house in San Francisco with his partner, who also works for Craigslist. He doesn't own a car, but he does admit to enjoying travelling. On a whim I ask how much his jeans cost.

"I buy much more expensive jeans than I used to. These were one-two-five bucks," he says.

He then looks stricken, as if the jeans thing was bad. "I'm a little uncomfortable with my current lifestyle, given where I came from," he says. In his 20s and early 30s he used to lead a "monk-like existence". Indeed, 10 years ago, when he was 34, his parents (his father was a chemistry PhD working for Dupont) had given up hope that their medical-school dropout of a son would ever do anything in career terms.

"I used to buy 50lb bags of wheat and grind it to make bread." He does the hand movement, solemnly. "My grandmother spat the bread out." A smile is suggested in his eyes but doesn't make it to the mouth.

These days the amateur baker is increasingly in competition with the toughest internet companies, which are moving into classified ads. One competitor is Ebay (which bought 25 per cent of Craigslist from a former employee in 2004). Mr Buckmaster doesn't seem terribly interested in the threat. "From the users' perspective it can't be bad if we are ever displaced by someone doing a better job," he says, though clearly he doesn't see that happening soon.

So if he doesn't worry about competitors or profits, what does he worry about? He pauses for 10 interminable seconds. "I worry if I've made the right decision in keeping the company so small." More people would mean more brains to serve users - but large organisations are dysfunctional. Small ones can be too, I say. He agrees: "Yeah. You just mustn't screw it up."

The interview is over and I have failed: no smile and no numbers. The photographer arrives and I suggest the picture is taken outside as the hotel is too frumpy. "Frumpy?" he exclaims, inexplicably amused. He smiles, broadly.

It seems the minute I stop trying, I succeed. Which is a little like Craigslist. While all those other internet companies strived so hard to make money and went bust, Craigslist wasn't trying at all, but still hit the jackpot.

 

The management philosophy of Jim Buckmaster

  • Listen to what users want. Try to make the site faster and better.
  • Hire good people. "We work hard trying to get the right kind of folks." It pays off: they hardly ever leave.
  • No meetings, ever. "I find them stupefying and useless."
  • No management programmes and no MBAs. "I've always thought that sort of thing was baloney."
  • Forget the figures. "We are consistently in the black, so if we do better or worse in any given quarter it is absolutely irrelevant."
  • Occasionally, give people "a very gentle nudge". This can be done over lunch or on the instant messaging boards.
  • He doesn't reply to any of his 100 daily messages, most of which beg Craigslist to do a deal. "I'm not real chatty on e-mail."
  • Put speed over perfection: "Get something out there. Do it, even if it isn't perfect."
  • "Don't screw it up by doing things that make people feel worse about their work."