Ask YC: Why can't anyone compete with craigslist? | Hacker News: Kaizyn 1275 days ago | link
Then don't try to tackle Craigslist head on. Attack them with an indirect strategy. Focus on what Craigslist doesn't get right and aim for the identified weaknesses. Better yet start by building up a position of strength for your own competing site and once your position is unassailable, then go into competition with them for classified ads. Finally, if you prefer neither indirect approach, then compel Craigslist to try and compete with your company in an area closely related to classified ads but different enough that it will be hard for Craigslist to adapt adequately to compete with you in this new space.
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