As one of Egret's key incubated projects, every aspect of 58list had been thoroughly considered before its launch. Perhaps it was because they had thought everything through too carefully that the first version of the homepage design was directly rejected by Simon.
It was too cumbersome.
Simon had vivid memories of classifieds websites. At first glance, they were often cluttered, with an overwhelming amount of redundant information bombarding the user, making it difficult to know where to start.
The 58list team initially made a similar mistake.
In an attempt to show that their service was comprehensive, the original homepage design spanned three screens.
This was clearly counterproductive.
Simon ultimately restricted the design to a single screen, demanding simplicity above all else. Given the current mainstream dial-up speeds, the page had to open instantly with no wait time.
This meant the homepage had to be primarily text-based.
Most non-essential classified services were cut, focusing instead on real estate, jobs, and second-hand items. These three categories alone covered over 80% of classified ads in print media.
The final page design, besides the site logo and search box, was divided into four sections: real estate, jobs, and second-hand items, with an additional forum for user communication.
For Egret, a pioneering tech company of the internet age, technology posed no problems.
The key to 58list's success would be its operation.
As a latecomer with hindsight, Simon knew the issues classifieds sites would face, like fake information and online scams.
Thus, in the preparation phase of 58list, the formation of a legal team became a top priority for the subsidiary.
Americans are quick to involve lawyers. If users faced scams on the 58list platform, they would inevitably target Egret, a wealthy corporation.
The advent of online classified services was set to disrupt a traditional print media industry worth $20 billion annually. Any disputes would likely see print media fan the flames, making any issue a major one, similar to how every Tesla accident draws media attention.
Free online classifieds replacing paid print services seemed inevitable.
Simon believed no one could stop this trend.
However, in this inevitable and turbulent industrial redistribution, forming a strong legal team and drafting clear terms of responsibility could best ensure 58list's smooth development.
After the final pre-launch meeting for 58list, everyone had lunch together at Egret's headquarters cafeteria.
Recently, Egret had invested in multiple startups using the $1.5 billion from Goldman Sachs and Morgan Stanley. 58list was the only fully-owned subsidiary with direct portal interfaces, similar to Facebook, Google, and Amazon, indicating the high-level focus on this project.
The CEO of 58list, Michael Novarek, was 35 years old, a graduate of MIT, and had worked at HP for five years.
After Egret was established, Michael Novarek was recruited as one of the company's earliest employees.
A Ph.D. and an energetic tech guru, Michael Novarek had been involved in developing and operating Egret's email and forum projects.
At a table in the cafeteria, Simon, Bezos, Tim Berners-Lee, and Michael Novarek discussed the business model of 58list.
Noticing Michael Novarek's ambition, Simon asked, "Mike, the traditional print classified ad market is worth $20 billion annually. How much do you think can transition to the internet in the next ten years?"
Michael Novarek thought for a moment and said, "In ten years, even if the free nature of the internet prevents the full $20 billion from transitioning, I believe we can capture about $5 billion in revenue. Moreover, the low operating costs will give us a high profit margin, something traditional print media can't match."
Simon turned to Bezos and Lee, asking, "What do you think?"
Tim Berners-Lee said, "I also think it could be around $5 billion."
Jeff Bezos, sensing Simon's intent, said, "We're only starting with classified services similar to traditional print media. As the internet industry evolves, 58list can offer more premium services, further expanding the market. $5 billion isn't a high number."
Simon nodded slightly.
58list didn't aim for any profits initially, but the Egret team had devised several sustainable potential business models.
Craigslist, which dominated the North American market in Simon's memory, only made a few hundred million dollars annually despite massive traffic, due to the founder's free operation philosophy.
Still, with only a few dozen employees even years later, Craigslist's high profit margin made it an attractive target for internet giants like Yahoo, Google, and Facebook.
Craigslist's success lay in its free model and monopoly.
This time, Egret's early layout made it easy to establish a de facto monopoly in this market.
However, achieving substantial revenue would be challenging.
Users accustomed to free services would struggle with a paid model. Forced fees could lead to user loss and the rise of competing sites.
After hearing the trio's opinions, Simon held up two fingers and said, "In my view, it could be just $200 million."
Even knowing Simon was giving Michael Novarek a reality check, Jeff Bezos was surprised. If 58list could only make $200 million in ten years, it wouldn't be worth continuing.
Before they could question him, Simon explained, "With the current free model, 58list functions like a public service platform and will continue to do so for a long time. Fortunately, our operational costs are very low. If we consider it apart from Egret, running a text-based public service platform across the federation would only require a few dozen employees. Including office space, server costs, etc., annual expenses wouldn't exceed $20 million."
The trio, all with strong technical backgrounds, nodded in agreement.
If run purely as a free public service platform without commercial ambitions, 58list would need only a few dozen employees and minimal additional costs.
This would ensure 58list's monopoly in the classifieds service sector.
With a monopolized market and a large user base, achieving $200 million in annual revenue through modest commercialization would be easy.
However, $200 million might be the ceiling.
Exchanging $20 million in fixed costs for $200 million in annual revenue would be comfortable but would limit further breakthroughs.
Seeing the trio deep in thought, Simon resumed his meal.
After a while, with Simon almost done eating, Michael Novarek smiled wryly and said, "If we destroy a $20 billion industry for a $200 million new market, wouldn't that be a huge failure?"
Simon put down his utensils and said, "From the public's perspective, we'd be saving them $20 billion annually. Many people would thank us."
Jeff Bezos added, "The print media groups would want to kill us."
Simon said, "Every technological revolution eliminates certain industries. When steam looms first appeared, traditional workers stormed factories to smash machines but never regained their jobs. Conversely, those who embraced mechanized textile factories made fortunes. The steam revolution, the electrical revolution, it's always been this way. Now, we're at the dawn of a new information revolution. Adapt and thrive, resist and perish—it's an inevitable reality."
Tim Berners-Lee couldn't help but remark, "The start of a great era."
"Indeed," Simon smiled, pointing to themselves and then around the cafeteria, "We are personally ushering in this great era."
Jeff Bezos and Tim Berners-Lee shared a moment of pride.
Michael Novarek, though equally excited, focused back on his project, "I'm still concerned about our project."
Simon redirected, "The $20 billion industry remains. What I mentioned was the worst-case scenario. How much we can convert depends on your work. But Mike, I must remind you: 58list should continuously explore various business models but never prioritize profit. Users must come first. All 58list services must adhere to the principle of user-first. If users find value, they'll willingly pay. Conversely, if the platform is seen as rife with scams, false information, and poor service despite charges, even with a monopoly, you'll only get a small piece of a much larger potential market."
The three nodded in agreement.
User-first was already a principle at Egret.
But, as always, it's easier said than done.
For classified services, Simon could only advise the 58list team to stay on the right path.
Moreover, compared to Egret's expansive layout in other areas, this business was not core. If Michael Novarek failed, Simon would decisively turn the subsidiary into a free public service platform, as a basic service of Egret.
Google's strength in Simon's memory was bolstered by its free services like Google Translate and Google Maps, which enhanced user stickiness to its core revenue products.
With all essential services available on Google for free, users had no reason to switch to other platforms, blocking the rise of competitors.
After the meeting, 58list quietly launched on Wednesday, August 11.
The threat to traditional print media was obvious.
Therefore, Egret avoided any grand announcements, preventing a user explosion and giving 58list's team room to adapt.
As a city-based classifieds service, other startups might start in one or two cities. Backed by Egret's strong technical and platform support, 58list launched across the capital cities of all fifty states and several populous metro areas.
Despite minimal promotion, being featured alongside Facebook, Google, and Amazon on Egret's homepage, and allowing login via Egret email, the free service quickly attracted a massive user base.
Within three days, posts on housing, jobs, and second-hand goods exceeded one million.
Classified ads in newspapers, based on circulation, cost from tens to hundreds of dollars.
In three days, 58list potentially cost the print media industry $50 million to $100 million.
For years, many didn't believe the internet could significantly impact traditional media. With 58list's launch, the threat became real.
Despite many print media outlets initially avoiding the topic, and even Egret maintaining a low profile, some
noticed.
A CNN business talk show did a feature on 58list the following Monday, detailing its popularity and the threat to print media.
Word spread naturally.
With 58list featured on the essential Egret homepage via IE browser, usage was highly convenient. Even uninterested users began exploring.
Professional real estate or job information might not be immediately needed, but the local second-hand market became a popular feature.
The second-hand market in the US is highly developed, with everything from cars to toys and pets for sale. Unlike newspapers, 58list charged nothing, making it easy to post unused items for sale.
Aware of the potential risks, 58list didn't hide them.
Before posting, users had to read carefully drafted site terms and fraud warnings, acknowledging potential risks before proceeding.
Despite these precautions, scams quickly occurred.
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