Craigslist offers listings for everything from apartments to lawyers to dates. It is free for users to search and in most cases, free for posters to put up their ads.
Patricia Nakache, a general partner at the venture capital firm, Trinity, is backing start-ups that figure people would be willing to pay for higher-quality, screened listings.
Because Craigslist does not much care about making money, it can be hard for a profit-driven business to compete. Just ask newspapers, which have seen their classified ads virtually disappear. But Ms. Nakache argues that “people are willing to pay for a better experience.”
One of the companies in which she has invested is Care.com, a listing site for caregivers of all types, including nannies, senior care providers, tutors, housekeepers and pet sitters. Caregivers can post their information on the site for free. People searching for caregivers can view limited profiles for free but are charged $25 a month (with discounts for signing up for multiples months) to search full listings.
People are willing to pay, Ms. Nakache said, because they find Craigslist, which does not vet listings, too risky for something as important as child or elder care. Care.com screens all the profiles and provides free background checks and audio references.
The challenge, she said, is how to add on to these services so users keep paying for subscriptions. Care.com includes articles on related topics, like how to deal with an elderly parent’s Alzheimer’s disease, what to pay baby sitters and how nannies should respond when their clients friend them on Facebook. Even after users find a caregiver and end their subscription, they often return to Care.com in the future, Ms. Nakache said, because their need for care changes over their lifetimes.
LoopNet, a commercial real estate listing site that is now a publicly traded company, is another Trinity investment that Ms. Nakache led. It lists $535 billion worth of commercial properties for sale, from offices to agricultural land and hotels. Its customers are individuals and commercial real estate firms and they pay to view and list properties. Subscriptions average $30 a month. LoopNet used to be free and make money from advertising, Ms. Nakache said, but switched to a subscription model after the tech bubble burst. The site had revenue of $71 million and net income of $21 million in 2007 and is now up to 3 million paying members.
Ms. Nakache has also invested in MyNewPlace, a home rental listing site that charges landlords a flat subscription fee or an $18 fee every time a potential renter contacts them, and Jobster, a job listing site that charges employers $99 for a 30-day listing or $10 for every applicant.
Start-ups and big companies have been trying to take on Craigslist for years. EBay, an investor in Craigslist, has Kijiji, a free classifieds site much like Craigslist. There are many other free and subscription apartment listing services and Web sites to help you find concert tickets, plumbers, nannies or whatever else you need. And there are always old-fashioned newspaper classified ads, which reigned before Craigslist arrived on the scene.
Ms. Nakache is betting that niche sites can prosper by charging for ads. Would you be willing to pay?