Wednesday, February 8, 2006

Economics, Because People Matter

Some of you might recognize the paraphrasing in today's title—it's a reference to the subtitle of E.F. Schumacher's classic, Small is Beautiful: Economics as if People Mattered. I was reminded of the book by this interview with Jim Buckmaster (open the link at the graphic to see the video). If you're a corporate worker or manager, you'll be glad you spent ten minutes watching this man and listening to his refreshing focus on business and competition.

Buckmaster is, of course, the CEO of Craigslist, the incredibly successful online shopping, employment, and personal connections community that just keeps piling up traffic, revenue, and notoriety, through a simple set of core values that, by and large, quiety defy all the granite rules of the modern marketplace. These include:

Non-competition: they don't look over their shoulder, they don't struggle to be on top, they retreat from display, leverage, and the big grab. They put 90% of their energy into learning what their customers need from them, and providing it.
Simplicity and Utility: these guys avoid flash and glare; they prefer to go with what's inexpensive but useful. Open source software, a simple look-and-feel, ease of use, and again, responsiveness to the needs of the community they serve.
No advertising, no self-promotion: it's ironic that a product like Craigslist, which has obviously become successful as an advertising forum, works so well without advertising itself. There is an underlying modesty to their approach to business that virtually every American company could learn from. I was reminded of this in reading about Apple's stock tumble yesterday: their stock price fell by nearly $10 a share in a day, just after Steve Jobs had thumbed his nose at Dell Computer, after Apple's price had finally eked ahead of the tech behemoth's. Arrogance has a way of backfiring upon itself: we've seen it in government, and we see it in business. There is not a trace of arrogance in Buckmaster and Craigslist.
More is not always more: Note how Buckmaster talks about growth. He recognizes that not all growth is positive. Indeed, in medicine, rampant growth at the cellular level is known as cancer. But in business, growth is the holy grail, the big brass ring that everyone strives after, no matter the cost in human or economic terms. Buckmaster knows better: as he says, if his company's 2005 growth rate of 200% is suddenly cut in half, "big deal—nobody's going to lose sleep over it." Perhaps it is this very detachment that frees the energy that furthers true growth.
Even when you're big, act small: Lao Tzu said this about 2,600 years ago, and Buckmaster puts the principle into practice. Obviously, Craigslist is pretty damned big—best estimates are that they're worth somewhere around $300 million. But they could be raking in two to three times that, if they wanted to charge for more of their services or leverage the trust and popularity they've earned. But they don't: they act small, continuing to work on getting the basics right and delivering a service that's consistently valuable to ordinary people, but not expensive or difficult to use. Therefore, their success continually, and effortlessly, widens.

What's really funny about that video, though, is the calm, poised presence of this quiet, centered kid CEO in a roomful of suits who have been drilled in the rat race, the law of the jungle, the fight-to-the-top mentality of American enterprise. Do you think anyone ever told Jim Buckmaster (now there's an ironic name) that business is supposed to be a dog-eat-dog war of survival? If so, do you think he listened to that crap?

In an era where business has become a me-first-and-fuck-everybody-else obsessive compulsive disorder, Mr. Jim Buckmaster is truly a breath of fresh air.

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