Some people may have heard of Craigslist.org. It is one of the most popular websites in the world with millions of users logging on everyday. In New york City, it is literally a more integral part of daily life than the sun. Craig built a loyal and rabid user (and fan) base for many reasons, and near the top of the list is because the site is free.
Free helps the website in many ways.
It encourages more people to participate.
It allows people that do participate to have an extremely low break even point if any at all.
For some reason if posting is free (and relatively equal) I feel like I’m getting more honesty. Or at least I will find out, from other pissed off posters, who is lying.
A community is built.
I could probably go on for twenty minutes listing reasons why free makes a better website. One of the biggest reasons is that on the web people expect free.
Lets contrast Craigslist with another list, Angie’s. I don’ know much about Angie’s list and I’m not sure if I know anyone that does. I don’t even know the URL – although I could take a pretty certain guess. What I do know about Angie’s list is that she needed to break even. Where Craig could work after hours, on the side, and give up much control – Angie needed cash flow to keep the site running. I believe that the sites do similar things in terms of help promote small business or individual merchants and dispense feedback throughout a community. In Angies list you had to pay to join, and that is the major difference.
So where are they today? Well I think the point is rather obvious. Free is better for some things – and maybe it never would have or will be better for Angie. Angie needed to fight for customers and spend money on advertisements and work to invision and build the brand. She still does today. Craig let “Free” build his brand.
Something else that is very interesting to look at is what “Free” does to the conventional risk vs. reward trade off.
Looking at both companies, one would assume that Craig is bigger because somewhere along the line he risked more. I don’t think that is the case. In fact, I think that Angie had always risked more. For some reason, “Free” inverts the curve.