Years ago I lived and worked in the Bay area (I was there for the dot com boom and bust). While I was there I discovered the wonder that is Craigslist. When I was heading back to Canada for my Masters, I had the idea of making a Canadian version. I actually went so far as registering a domain and e-mailing the Craigslist staff asking them if there would be any possibility of a partnership. They blew me off and I dropped the idea, but now that everyone in Canada is using Craigslist, I kick myself for not duplicating their website (which would be easy, the beauty of Craigslist isn’t the technical sophistication of their site, its the community they build and maintain) and beating them to Canada.
Nowadays I think people are idiots who consider competing with Craigslist or E-Bay. These are pretty well the definition of “winner takes all” businesses. You could only really compete with them by starting in a market they hadn’t entered yet.
Along a similar line, another business idea I’ve had is to create classified sites for small communities. This could either be small towns, apartment buildings, schools or areas in a town. The site would let someone set up a new classified site, which would be along the same lines as Craigslist (although with fewer categories since there’d be a smaller user base): buy and sell, jobs, housing and personals. There would be discussion forums that would help build the community and keep people coming back, especially in the early days. There would be a moderator who could do various things to control the site (perhaps breaking up categories, add some of their own advertisements, that sort of thing). The database behind the site would be managed by the company creating the service (think Geocities). The moderator would build the community and advertise the site.
Certain places on the page would be “reserved areas”. When and if a community grew to a certain size, the company would then use them as an ad network (this is how it’d be monetized). Ads could be sold broadly (e.g. this goes in rotation on all sites throughout the network), or targeted (these only go out to sites in Toronto, or apartment buildings in Toronto, or sites within 5 km of the restaurant). Alternatively, if the moderator or community objected to ads, they could pay a hosting fee and get an ads free version (the price would increase with their usage). If there wasn’t any interest in building a sales force, ad space could just be used with Ad Words or sold to some ad network.
The downside is there’d probably be tons of sites with little or no activity. The upside would be that the creation and maintenance of this would be VERY cheap, and would scale with the user base. As there was more demand placed on the system (perhaps leading to higher bandwidth costs or more powerful servers), this would translate directly into more page views, which would translate directly into more revenue. The first version would take nothing more than a bit of developer time and a computer hooked up to the internet 24/7 (I host servers from my home connection when its nothing mission critical).
The actual demand (processing, bandwidth, and hard drive space) on the system should be quite minimal for a classified ads type site.
For this post, or any other of the wacky business ideas I post, obviously I’m releasing any ownership claims I may have over these ideas. If you like something I post and feel like you can make money from it, please feel free to do so! Let me know when you’re opening and we’ll do a post on it to give you some free advertising.