I'm sure the story of bootstrapping Craigslist is very interesting, I don't doubt it.
But that's not my point. My point is, their bootstrapping was a challenge just like any other other startup has to gain users, but it was possible, with hard work.
Nowadays, if any other startup tries bootstrapping that is even better, with even more hard work and dedication, they'll still fail, because Craigslist wins via network effects. It's now virtually impossible.
Resentment towards Craigslist is not because they got to where they are now easily -- they didn't, it was hard. That gets respect. The resentment comes because they're staying where they are now, easily, and potentially better competitors have virtually zero chance, no matter how much they work hard.
You're ignoring that building Craigslist was as possible in 1995 as building its replacement(s) is now. Disrupting the global print classifieds market in 1995 using an unfamiliar new technology was hard, and companies aiming to disrupt CL now will have to work at least as hard (and possibly ride a wave).
In fact, the major difference between 1995 and now is that CL has concentrated the market from zillions of local print publications to a single website. That means they are more vulnerable in some ways than "print classifieds" were in 1995. (It also means they have to stay on their toes to make sure they keep their users happy.)
>> It's now virtually impossible.
Air BnB shows that it can be done, so we know that it's not impossible to build a challenger. And we knew that it would be virtually impossible, or everyone would do it.
It's a childish complaint. The new startups simply aren't better, because they don't have the network effects. They may have better looking UI, better text classification, better customer service, or whatever you want.
But as long as they don't have the users, they are not better.
And don't forget that recent history is filled with companies that were "virtually impossible to defeat" until they were beaten, and harshly.
> But as long as they don't have the users, they are not better.
That's a truism. Crazygringo's point assumes that network effects are excluded from the measure of a "better" service. I think that's a fair basis for comparison, since the network effective advantage accrues from an earlier period in the marketplace's history: it's the prize won by being better/smarter than previous competitors. But it says nothing about the dominant service being better than current, newly launched competitors.
If you define "better" as having more users, then that's pretty much ex post facto reasoning and tells us little.
> And don't forget that recent history is filled with companies that were "virtually impossible to defeat" until they were beaten, and harshly.
1. The number of years that a company dominates is the measure of how much that company has won. The fact that a company eventually falls to a competitor doesn't mean that the company didn't profit handsomely for years or decades.
2. The fact that some large companies have fallen doesn't mean that the existing behemoths don't derive most of their advantage from network effects. Maybe we would have seen better, more open social networking startups emerge and win the market by now if Facebook's network effects were somehow nullified.
The ultimate point is that network effects are a very significant barrier to entry, and mitigating them would allow a more dynamic market for startups to compete in, and higher competition in the market (which is better for consumers). Imagine if all social networks were interoperable and people could choose which service they wanted to live on -- then there wouldn't be a tendency for a 1000-ton gorilla to emerge at the top of the heap.
(Funnily, I have nothing against Craigslist, since they're providing a very useful service at virtually no cost. They deserve their position, easily; their market's story is a happy one. Let's hope it happens in more places soon.)
Regarding network effects the point is that they do make the service more useful (read better) for the users, and in a significant way, many times more significant than a new UI. So, Craiglist's still better now, if only because they were better before. Unfair? Maybe so, but complaining won't solve the problem or make it go away. It's just that we've been spoiled about never having big barriers to entry anymore.
Regarding falling companies was just to counter the parent saying that that kind of companies are unassailable, when they clearly aren't. Nothing more, nothing less... profits or their staying alive being due to network effects are irrelevant to my point.
The ultimate point is that just bitterly complaining about how unfair Craiglist is because it's using its competitive advantages to its advantage will not solve the barrier to entry problem, it doesn't even make it clear why is it a problem, nor posits arguments about what to do (if anything) with it.
But that's not my point. My point is, their bootstrapping was a challenge just like any other other startup has to gain users, but it was possible, with hard work.
Nowadays, if any other startup tries bootstrapping that is even better, with even more hard work and dedication, they'll still fail, because Craigslist wins via network effects. It's now virtually impossible.
Resentment towards Craigslist is not because they got to where they are now easily -- they didn't, it was hard. That gets respect. The resentment comes because they're staying where they are now, easily, and potentially better competitors have virtually zero chance, no matter how much they work hard.