CEO Buckmaster revels in his company’s unorthodox path to prosperity—what he calls “the ironies of unbranding, demonetizing, and noncompeting.” Together, these three “ironies” represent sharp (and sharply effective) departures from the commercialism that infects so much of the Web—which is precisely why the site attracts such a fervent following and has become such a strong business. “By paying no attention to these areas—or by trying to do the opposite of what other organizations do—we end up being strong in each of them,” he explains.
Craigslist certainly has an unconventional approach to investing in its brand—it doesn’t. “We pay zero attention to brand,” Buckmaster says. “We never use that word internally. We do zero advertising. We don’t have a logo. We’ve never done a focus group. We don’t care about any of that. And now we’re told we have the strongest brand ever for a company our size. That’s pretty ironic.”
Craigslist has a fresh approach to competition—it doesn’t believe in it. “We have no interest in competing with anyone,” Buckmaster says. “We consider our mission to be one of public service. We’re just trying to create something as useful as possible. If people want to use it, great. If they don’t find it useful, that’s great too. Yet we keep reading that we’re one of the newspaper industry’s deadliest competitors.” Indeed, one respected analyst has estimated that, in the San Francisco area alone, newspapers are losing $50 million to $65 million in annual classified-ad revenue because of Craigslist.
Above all, Craigslist has a distinctive approach to economics—it keeps finding reasons not to charge customers. It imposes modest fees on companies that post job listings in seven major cities, including Los Angeles, San Francisco, and New York City. The company also imposed a modest fee for apartment listings in New York City—an effort to pare back on the 500,000 listings it receives per month, many of which are duplicates. Newmark and Buckmaster have also discussed plans to charge for job listings in a few other cities, including Boston, San Diego, and Washington, D. C., in an effort to reduce the number and increase the quality of the posted openings for apartments and jobs. Other than that, though, the site is free. Yet Craigslist generates healthy profits, and Internet titan eBay bought a 25 percent stake in 2004 so it could learn more about the company and its mastery of classifieds.
That’s the ultimate irony of Craigslist—and the powerful logic of strategy as advocacy. By building a company around a unique set of anticommercial values and practices, Craigslist has built a flourishing commercial property. “We have to run a strong business, we have to have cash reserves, we want to be here over the long run,” Buckmaster says. “But we don’t view the Internet as being subject to a ‘land grab’ or ‘first-mover advantage.’ Companies that want to dominate in a hurry—they’re the ones that spend all the money. We’re definitely oddballs in the Internet industry, and we always have been. Lots of people made fun of us, especially at the height of the dot-com boom. Most of those people are out of business now.”
WHAT YOU THINK SHAPES HOW YOU TALK—CREATING A STRATEGIC VOCABULARY
Listen closely to maverick entrepreneurs like Arkadi Kuhlmann and Jim Buckmaster, and you quickly realize that they don’t sound like traditional executives. They almost never use conventional jargon to explain how they do business. They almost always describe their strategies and practices—the ideas that animate their companies—in ways that sound unique, authentic, even a bit strange. How many bankers tout the virtues of “agitating” their customers? How many Internet CEOs discuss “the ironies of unbranding, demonetizing, and noncompeting”?
One sign that a company is pursuing a truly original competitive strategy is that it has created its own vocabulary. Not buzzwords, acronyms, and the other verbal detritus of business-as-usual, but an authentically homegrown language that captures how a company competes, how its people work, why it expects to succeed, and what it means to win. You can’t judge a book by its cover, but you can evaluate a company by its language. Because they think about their business differently, maverick organizations almost always talk about their business differently. They devise a strategic vocabulary that distinguishes them from their rivals and sets expectations in the marketplace and for everyone in the organization.
The best way to appreciate the power of language in business (and to evaluate how your own vocabulary stacks up) is to visit a company that speaks a language all its own. Consider our visit to the Seattle headquarters of Cranium, a seriously important young player in the deeply troubled world of toys and games. It’s a bit overstated (but only a bit) to suggest that Cranium is to board games what Pixar is to animated films—a maverick newcomer that has produced a string of hits by infusing a tired industry with fresh energy and a different perspective on how to compete. Since November 1998, Cranium has released a stream of games aimed at adults, preschoolers, and just about every age in between. The games have won rave reviews and millions of loyal fans. Cranium, its namesake title and the Toy Industry Association’s 2001 Game of the Year, ranks as the fastest-selling independent board game of all time. (It is now available in 10 languages and 20 countries and has sold a staggering 5 million copies.) Cadoo, the company’s second title, won Game of the Year in 2002, and Hullabaloo was Game of the Year in 2003 and again in 2006.
All told, in less than ten years, Cranium has won more than 80 industry awards, sold more than 22 million copies of its products, and attracted an estimated 30 million players for at least one of its games. This is, quite simply, a performance without precedent in a $20 billion industry that is actually shrinking, torn apart by kids’ fascination with computers, the Internet, video games, and all forms of electronic entertainment and by Wal-Mart’s stranglehold over the distribution of traditional toys and games, which has resulted in the bankruptcy of fabled retailer F. A O. Schwarz, the humiliation of Toys “R” Us, and other devastating shocks to the retail system. There hasn’t been much fun in toyland for an awfully long time—unless, that is, you work at Cranium.
In the media, Cranium’s track record has been a source of both celebration and mystification. Is it the latest in a line of press-savvy consumer companies that have mastered the art of good PR? (When Julia Roberts appeared on Oprah and declared herself a Cranium enthusiast, the game’s popularity went into overdrive.) Is its unrivaled sales record a testimony to the power of clever packaging and smart design? (All of the company’s artwork, from the games themselves right down to its business cards, feature distinctive illustrations by Gary Baseman, creator of the TV series and feature film Teacher’s Pet.)
Or is the Cranium phenomenon about something deeper, an emerging New Age ethos gripping society? In a long essay for the New York Times Magazine, writer Clive Thompson deconstructed Cranium’s unparalleled performance in the marketplace and concluded that the company’s games have become an emblem of “America’s insatiable thirst for self-esteem.” Why has the company won in the marketplace? Thompson asks. Because, he argues, “Cranium appears to have discovered the paradox that gets kids and families playing together: a game where no one loses.”3
Richard Tait, Cranium’s cofounder and “Grand Poo Bah” (yes, that’s the title on his business card), is adamant that at the heart of the company’s consistent growth is a disruptive business strategy—and that at the heart of the strategy is a homegrown language that communicates the ideas that define the company. How Cranium thinks about its business shapes how everyone at the company talks about the business, both among themselves and to the outside world. And the fact that everyone at the company talks about the business in the same way allows it to keep introducing new games, targeting new slices of the market, even venturing outside board games to book publishing, television, and other fields, without straying from its core values.
“This wasn’t about games at the beginning,” explains Tait, who was a rising star at Microsoft (where he won Employee of the Year honors) before he and cofounder Whit Alexander (also a decorated Microsoft veteran) decided to trade the rigors of software for the fun of games. “We wanted to provide an alternative to the entertainment choices people have, to create a movement around that alternative.