Whilst we watch the newspaper industry being decimated, its tempting to attribute its demise to the recession and consequent decline in advertising revenue.
But such a widely held view misses the KEY point.
Look at the above chart, comparing ad revenue of US classified ads website Craigslist with ad revenue generated by traditional newspapers over the same period. Advertising revenue for newspapers has decreased (no shocks there) but look at the ad revenue for Craigslist since the recession hit in late 2007 – it has increased dramatically, demonstrating that capital does not disappear, it simply shifts to a more effective and efficient business model. It is estimated that the newspaper industry has suffered a $10bn hole in ad revenue in the last decade – Craigslist has clearly picked up much of this slack.
As well as being a game-changer for the newspaper industry, Craigslist is one of the Top 30 most visited websites in the world yet it has less than 30 employees.
Craigslist is an example of a new breed of flexible, lean, game-changing businesses that are capable of challenging traditional, established businesses – or even entire industries. No industry sector is safe. You should be considering now what game-changing business model could redefine your industry and either prepare to compete in the very near future or (ideally) start building it.