Living next door to Craigslist.org founder Craig Newmark has rubbed off on serial entrepreneur Mark Pincus, who just landed $6.3 million in venture capital for his new startup and Craigslist rival, Tribe Networks Inc.
Pincus and Newmark used to share only their neighborhood and a voluntary community project. But now they're now vying for business in the same market.
Pincus' online networking community, www.tribe.net, offers a place to pick up a date, sell or buy stuff, or browse job listings in your local area -- same as Craigslist. Tribe Networks of San Francisco is the latest in a string of online social networking businesses to nab VC in recent months, including Friendster Inc. of Sunnyvale ($13 million), Spoke Software Inc. of Palo Alto ($11.7 million) and LinkedIn Ltd. of Mountain View ($4.7 million). Apparently investors believe there are enough paper cocktail umbrellas to go around.
"I think Tribe is an eBay-sized opportunity," says Allen Morgan, a managing director at VC firm Mayfield of Menlo Park who led the round.
In 1997 Pincus co-founded SupportSoft Inc. of Redwood City and earlier founded FreeLoader, which was acquired by Individual Inc. for $38 million in 1996 and is now part of Thompson Financial.
Other Tribe investors are media companies Knight-Ridder Inc. of San Jose and Washington Post Co. of Washington, D.C., which are expected to dovetail into Tribe's online classifieds at some point.
Tribe, like its fellow online communities, works on the premise that a network of friends or online acquaintances could help you find what you need.
But unlike other networks, Tribe also offers online classifieds, which pits it against San Francisco's Craigslist. Since launching on July 25, Tribe has had 144,000 unique visitors to its site, compared to the 4 million people who visit Craigslist per month. Distinguishing Tribe from its 9-year-old rival is user identity. Tribe users are identified by an online profile, which they write and control, and many post photos of themselves. Craigslist users, on the other hand, are anonymous unless they choose otherwise.
Pincus argues his is a "trusted" network since users' identities are revealed, although no one polices the validity of profiles.
"It's a lot harder to fake your friends and who you are when you're putting up info about yourself," he says.
Tribe user Michael Paulukonis of Scranton, Pa., says while there are some "fakesters" on Tribe, he enjoys seeing users' photos and reading their profiles.
Another glaring divergence between Tribe and Craigslist is business model.
"We don't spend a lot of time thinking about competition per se since we're operating mostly as a public service," says Craigslist CEO Jim Buckmaster.
The 14-person company is self-funded and has been profitable since 1998 by charging only for job postings in the Bay Area, which accounts for less than half of the site's activity. Craigslist has no advertisers and is not seeking venture capital.
Tribe, on the other hand, plans to implement targeted advertising that is based on a user's online behavior. Pincus also expects to begin charging for commercial use of the site, including classifieds.
Until now Pincus had bootstrapped Tribe with $100,000 of his own money. He will use its new funds to hire an additional eight staff during the next three months, bringing its total to 30. He also expects to continue development of the Web site.
And what does Craigslist founder Newmark have to say about Tribe? Not much, except that he still likes his neighbor Pincus, as well as Pincus' dog.
Rhonda Ascierto is a Biz Ink reporter.
You can reach her at rascierto.
