Hacker News Reader

Comment by davidw | Hacker News Reader

You should read up on the economics of our industry. This book is a good place to start:

http://www.squeezedbooks.com/book/show/7/information-rules-a...

Basically, there are what are called "positive network externalities" or "network effects" for a site like craigslist: if you you want to sell something, you want to go where lots of buyers are. If you want to buy stuff, you'll get a better selection where there are lots of sellers.

View on HN

I agree, network effects is the answer. All other explanations about "feeling the love" and "unsophisticated design" are post-hoc justifications.

Network effects is as glib an answer as "got there first."

These things can be a factor, but are not an explanation.

It's not the only factor, but it's an important one.

I don't know why first mover advantage wouldn't be a good explanation for this case. Just because other companies squandered their first mover advantage doesn't mean they didn't have it initially. The big barrier to entry for a Craigslist competitor would seem to be brand identity since people want to buy and sell where they know other people are buying and selling. First mover advantage plays a big part in establishing that brand identity.

"Got there first" is an explanation. It's an explanation of why some American pioneers became rich in railroads and slightly later arrivals didn't, for example.

I'd say "got big first" is a slightly more accurate phrasing, but the gist is the same.

Reply on news.ycombinator.com