Craigslist, Wikipedia, and the Abundance Economy

In the traditional economy, we operate with a scarcity mindset. There‘s no such thing as a free lunch, we‘re told. You can‘t get something for nothing. Someone always has to pay.

But in the digital era, we‘re seeing the rise of an alternative – the abundance economy. In the abundance economy, costs trend toward zero and immense value can be created and distributed at minimal cost. Free lunches do exist, and they‘re becoming more common than you might think.

Two of the best examples of the abundance economy in action are Craigslist and Wikipedia. These internet giants have transformed how we access information and services, all while remaining free for the vast majority of users. As a full-stack developer, I‘m fascinated by how they‘ve achieved this technically and economically. Let‘s take a closer look.

The Power of Near-Zero Marginal Costs

The key factor that enables the abundance economy is the plummeting marginal cost of digital goods. Once you‘ve created the first copy of a digital product, whether it‘s a webpage or an app, each additional copy costs essentially nothing. It‘s just a matter of transmitting data.

This wasn‘t always the case. Consider traditional print media like newspapers and magazines. There‘s a significant cost to producing each additional copy – you need more ink, more paper, more distribution. The 10,000th copy costs just as much to make as the first. That‘s why print media has to charge each reader and rely heavily on advertising to generate revenue.

But for digital media, the economics are radically different. Whether one person visits a website or one million, the cost to serve those pages is virtually the same. This opens up new possibilities for providing value at scale.

From a technical perspective, this is made possible by the incredible efficiencies of modern software and infrastructure. Open source operating systems like Linux, web servers like Apache and Nginx, and databases like MySQL and PostgreSQL provide robust, scalable foundations at minimal cost. Cloud computing platforms like Amazon Web Services and Google Cloud offer pay-as-you-go pricing, so you only need to purchase the server capacity you actually use.

With these tools, small teams of skilled developers can build platforms that serve millions of users with minimal overhead. It‘s a far cry from the days of having to purchase and maintain expensive physical servers and infrastructure.

Craigslist‘s Asymmetric Business Model

Craigslist is a prime example of leveraging near-zero marginal costs. The site hosts hundreds of millions of classified ads across hundreds of cities, and the vast majority of those ads are totally free to post.

Consider the scale at which Craigslist operates. According to SimilarWeb, Craigslist is the 60th most visited website globally, with over 400 million monthly visits as of January 2023. It serves 20 billion page views per month and handles 80 million new classified ads each month. With that volume, even small efficiencies add up to massive cost savings.

So how does Craigslist make money? Through an asymmetric business model. The site charges for a very small subset of ads – primarily job postings in major cities and apartment listings in New York. By some estimates, these paid ads represent less than 0.1% of the total volume.

But that tiny sliver of paid listings subsidizes free classifieds for everyone else. The people posting those apartment and job ads – primarily businesses and professionals – fund the free lunch for the masses. And they‘re happy to do so, because Craigslist delivers them tremendous value as well.

Craigslist‘s lean operations also help keep costs down. The company has always kept headcount low, with a staff of around 50 supporting a top-60 website globally. Founder Craig Newmark is famous for his focus on customer service over profits. By keeping expenses minimal, Craigslist has been able to maintain its free and nearly-free ad model for over two decades.

From a technical perspective, Craigslist has managed to keep its platform simple and efficient. The site‘s design has barely changed since the early 2000s, and it remains mostly plain HTML with minimal JavaScript and no tracking cookies. By avoiding complex features and focusing on core functionality, Craigslist minimizes development and maintenance costs.

Wikipedia and the Triumph of Crowdsourcing

Wikipedia takes the abundance approach even further. The online encyclopedia contains over 55 million articles across 300 languages, representing the accumulated knowledge of tens of thousands of volunteer contributors. And it‘s completely free to access for readers.

Before Wikipedia, encyclopedias were expensive, limited in scope, and quickly outdated. Compiling all that information in printed volumes was a massive undertaking, requiring extensive resources to research, write, edit and distribute. The Encyclopædia Britannica, one of the most well-known traditional encyclopedias, contained around 100,000 articles in its heyday and cost over $1,000 for a full 32-volume print set in 2010.

Wikipedia changed all that with the power of crowdsourcing and digital distribution. By tapping a vast network of volunteer editors and allowing them to continuously update articles, it quickly surpassed the breadth of any print encyclopedia. As of 2022, English Wikipedia alone contained over 6.5 million articles, with 570 new articles added daily.

And by existing fully online, the cost to "distribute" this knowledge to readers across the globe was essentially zero. Wikipedia‘s PageRank (a measure of the quantity and quality of inbound links) is a staggering 9.74 out of 10, reflecting its status as one of the most linked-to resources on the internet.

Wikipedia does have operating costs for servers, bandwidth, and a small staff, but those are covered by donations. With over 500 million monthly users, if even a small percentage contribute, it more than covers expenses. The Wikimedia Foundation, the non-profit that operates Wikipedia and its sister projects, generated over $120 million in donations and contributions in 2021, against operating expenses of around $112 million.

From a technical perspective, Wikipedia runs on open-source software, primarily the PHP-based MediaWiki platform. Hundreds of developers have contributed to MediaWiki over the years, adding features and improvements that benefit Wikipedia and the many other wikis that use the software. Wikipedia‘s infrastructure is a combination of owned servers and cloud services, designed for high availability and low latency to serve its global user base.

Like Craigslist‘s Craig Newmark, Wikipedia founder Jimmy Wales has prioritized free access to information over profits. He‘s stated "Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That‘s what we‘re doing."

The Benefits of Information Abundance

The impact of Craigslist and Wikipedia‘s free models extends far beyond their own websites. By making classifieds and encyclopedia information radically more accessible, they‘ve helped democratize access to opportunity and knowledge.

With Craigslist, local marketplaces are opened up to everyone. A person can furnish an apartment, find a job, or advertise their services without needing a big budget for promotion. Small businesses and entrepreneurs can connect with customers on a level playing field with larger companies. A 2013 study by the Pew Research Center found that 29% of American adults had used online classified ads for buying or selling, largely driven by Craigslist‘s ubiquity.

Wikipedia has become many people‘s first stop for researching a topic. Students can access in-depth information on subjects ranging from history to science to the arts. Individuals in developing countries can tap into educational resources previously unavailable. A 2011 survey by the Pew Research Center found that 53% of American internet users had consulted Wikipedia, and that number has likely grown significantly since then. Wikipedia‘s wide-ranging knowledge base benefits everyone from academic researchers to curious people looking to learn.

This abundance of information has a multiplicative effect as well. The easier it is to learn about a topic, the more people will develop expertise and build on that foundation. Increased access leads to increased innovation, problem-solving, and creativity across fields.

While Craigslist and Wikipedia are two of the largest examples, the abundance economy mindset has spread across the internet. Millions of blogs, forums, open-source projects and free apps provide value to billions of people every day. For many, the knee-jerk reaction of "how will you make money?" has been replaced by "how can we add value?".

Challenges and Opportunities in Abundance

While the abundance economy has immense potential benefits, it‘s not without challenges. Free and low-cost models can be difficult to sustain, and there are risks of bad actors taking advantage of open systems.

Wikipedia, for example, has had to battle vandalism, misinformation, and editor disagreements. The Wikimedia Foundation employs a variety of technical and social solutions to maintain the integrity of Wikipedia‘s content, including bots that detect and revert malicious edits, a robust system of editor oversight, and clear policies around neutrality and verifiability.

There are also valid questions around how creators and innovators are compensated in a world of abundant free content. If everything is free or nearly free, how do we support and incentivize the development of new ideas and creative works?

I believe the answer lies in a combination of approaches. Voluntary contributions, as we see with Wikipedia donations and Patreon subscriptions, allow fans to directly support creators. Freemium models provide a basic level of access for free while charging for advanced features or services. And there‘s still a significant role for traditional paid content and services, particularly in specialized domains.

As a technologist, I‘m excited by the potential of the abundance economy mindset and inspired by pioneers like Craigslist and Wikipedia. At the same time, I recognize that it‘s not a panacea. We need a variety of economic models and approaches to create a vibrant, equitable internet.

One area I‘m particularly interested in is how we can apply abundance economy principles to open-source software. Many of the critical tools and frameworks that power the internet, from operating systems to machine learning libraries, are developed by volunteer communities and made freely available. Finding sustainable ways to support and grow these projects, whether through corporate sponsorship, user donations, or innovative funding models, is vital for the long-term health of the software ecosystem.

An Abundant Future

The success of Craigslist, Wikipedia, and other abundance economy innovators demonstrates the incredible things that are possible when we prioritize access over scarcity. By leveraging the near-zero marginal costs of technology and the power of voluntary contributions, we can create resources of immense value accessible to everyone.

The abundance mindset is spreading. Socially conscious businesses are looking for ways to balance purpose and profit. Non-profit and open-source initiatives are leveraging technology to expand their reach and impact exponentially. Creators are finding new ways to connect with and be supported by their audiences.

As a full-stack developer, I‘m inspired to build software that maximizes value for users while minimizing costs and barriers to access. That might mean leveraging open-source tools, finding efficiencies in infrastructure and development processes, or exploring new business models that align incentives between creators and consumers.

The challenges we face as a society, from climate change to inequality to disease, will require every ounce of ingenuity and cooperation we can muster. Embracing the abundance mindset and making knowledge and resources as widely accessible as possible is critical to empowering problem-solvers around the world.

In the words of Wikipedia‘s Jimmy Wales, "It‘s time to extend the Golden Rule to bits. Let‘s make information really, truly free." As we build the next generation of technology and online services, that‘s a principle worth striving for. An abundant future is possible – it‘s up to us to create it.