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A few other people already mentioned network effects: It's why Ebay rules over auctions. If you're looking to sell something, you want to go to the place that already has the most buyers. If you're looking to buy something, you want to go to the place with the most sellers/selection. It's cyclical - the bigger the network gets, the more people want to and even have to use that network to be a serious player.

One way you could beat Craigslist: Start in one local region and build a hell of a community around it. Maybe have parties or events. Get everyone in the city talking about it, and own that city. Make it so that everyone in that city chooses the new local competitor over Craigslist.

Another: Find one thing Craigslist is doing really poorly, and do that really, really well. Focus only on that and branch out from there.

If you want to fight an empire, you don't march out the same sets of troops as them into the plains to fight. You go find a tiny, isolated, already unhappy part of their empire, and you raise hell there. Build support for the cause. Get more troops, supplies, allies, experience. Realistically speaking, there won't be a "craigslist killer" that comes out of nowhere with better classifieds unless it's backed by someone that already runs things. Someone like Google might be able to do it by making a push on sites that people already use a lot, similar to the way they're pushing Chrome right now. But if you're starting from scratch?

Then think small. What or where is Craigslist failing? Go there. Take over that place. Then branch out.




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