
How AirBnB Became a Billion Dollar Company - cabinguy
http://davegooden.com/2011/05/how-airbnb-became-a-billion-dollar-company/
======
Mizza
Is anybody else slightly disturbed by all of the 'attaboy!' comments here on a
post exposing unscrupulous and probably illegal business tactics?

Think the response here would be the same if it was MicroSoft or the RIAA
caught in something like this and not a YC alum?

Anyway, great investigation and great analysis here, I think.

~~~
c2
I agree the 'attaboy' comments are way out of place, but there is also an over
the top reaction the other way with the criticism being heaped onto the AirBNB
guys in my opinion.

It was technically wrong of them to leverage craigslist by circumventing the
community's own "no commercial email" request, and they should get dinged for
it.

But in the grand scheme of things, when you are a tiny start up struggling to
survive, this is a relatively benign grass roots attempt at marketing which
the AirBNB guys even probably regret doing.

Comparing RIAA's scare tactics to this seems a _little_ out of place, but it
is right in line with Microsoft's shady attempts at astroturfing.

~~~
ThomCarver
Can we all agree that a $1Bn valuation stops you being "a tiny start up
struggling to survive"?

~~~
c2
Sure, but the story is from a year and half ago.

AirBNB didn't become 'ramen profitable' until April 2009.

[http://www.quora.com/How-much-money-did-Airbnb-raise-What-
is...](http://www.quora.com/How-much-money-did-Airbnb-raise-What-is-the-
companys-financing-history)

------
pgroves
I started my own company to get away from the do-anything-for-a-sale attitude
of corporate america. I do not admire or respect AirBnb for this behavior. I
don't care that it worked. I don't care if it was legal or not, it was
dishonest. I know it's common, but it takes a fundamental lack of respect to
lie directly to another human being.

I'll just continue to toil in obscurity; self-respect intact.

~~~
marcamillion
I am not being facetious by this question, but did you make a product that you
are selling ?

If so, how did you get your first set of customers ?

Please share.

If you have not made a product that you need to sell yet, I think you will
find when you do it, it's MUCH, MUCH more difficult than you ever thought it
would be.

Also, selling a service - i.e. web development/design is very different than
selling a product.

~~~
kwis
I've sold products.

I didn't spam. I talked with customers before the product was even finished to
make sure we were solving a real problem, to make sure they understood our
marketing message, and to make sure we really understood the space.

This led naturally to a situation where I had _paying_ beta customers, and
even more customers who signed up and started paying as soon as we launched.

~~~
mover
There's a fundamental difference between building a product that doesn't
depend on others for its functioning, and a marketplace, where the core
function is access to other users.

It is about impossible to get a marketplace going from a standing start. I've
commented on it before elsewhere: picking off Craigslist users was always
critical for Airbnb to get going. There are dozens of startups trying to build
companies off the back of what Craigslist doesn't provide.

I'm sure the Airbnb guys probably started with the honest approach, realized
it got them nothing but cease and desist notes, so switched to the craftier
fake emails from girls interested in the well-being of vacation renters
everywhere. I bet it felt icky at the time, but here they are. And "you know
what's cool....?"

~~~
kwis
There are two-sided networks that have launched without spam, or deceit.

The standard approach would be to pick a city like NYC, and pound the pavement
selling the site to every high-influence group you can possibly identify, do
that to get a decent inventory built up and then launch with that inventory
and start proving the model.

Then, pound the pavement in other high-influence cities, work to get inches in
the media, do biz-dev deals with travel/vacation sites, get yourself
interviewed on local radio and tv, find every possible way to insert AirBNB
into the news stories of the day And frankly, with the real estate crash,
there were a _lot_ of possible ways to insert themselves into the news.

Or they could just spam craigslist.

That said, my big question continues to be 'did they disclose this behavior to
their investors'.

------
nhangen
This is the same thing spammers do to steal money from people, and it's the
same thing that dating sites do to pretend to have women interested in meeting
dudes. Either way, it's fraudulent.

I don't hate that they did this, but I hate that they tried to pretend they
were anonymous women that happened to really like AirBnB. Why be so shady
about it and instead why not just be honest?

"Hey, we noticed your rental and thought you might like something we built.
It's helped a lot of people fill vacancies and make money; check it out - url"

~~~
thomasgerbe
I assume they couldn't be honest because it would've violated Craiglist's
Terms of Use, namely:

You agree not to post, email, or otherwise make available Content:

k) that constitutes or contains "affiliate marketing," "link referral code,"
"junk mail," "spam," "chain letters," "pyramid schemes," or unsolicited
commercial advertisement;

l) that constitutes or contains any form of advertising or solicitation if:
posted in areas of the craigslist sites which are not designated for such
purposes; or emailed to craigslist users who have not indicated in writing
that it is ok to contact them about other services, products or commercial
interests.

m) that includes links to commercial services or web sites, except as allowed
in "services";

I wonder if Craigslist could legitimately sue Airbnb.

~~~
run4yourlives
Sue them for what, exactly? Coincidence?

While it doesn't take a rocket scientist to figure out what's happening here,
it takes a bit more than connecting the dots to make a legal case stick.

[EDIT] Just to be clear I'm certainly not a fan of this. It strikes me as
unethical and a little low on the "sleazy marketer" scale. I don't however
beleive that this is illegal unless you can somehow prove that
JillSmith03@gmail.com is professionally connected to AirBnB, and that this was
done under corporate directive.

~~~
alain94040
It's actually very easy to prove, because the same email was sent from several
different accounts: you go after AirBnB directly and shoot for discovery, get
them under oath to answer whether they did this or not.

If you have ever been questioned under oath, you know how tough it is to lie
(ping me offline for details).

No point in chasing the gmail accounts themselves, that would be a dead-end.

------
tlrobinson
It's interesting that a lot of the recent billion dollar internet companies
have some sort of gray/black hat streak. Off the top of my head:

Groupon: "we've already seen businesses complaining that the Groupons didn't
make them money, or that Groupon sales people suggested they raise their
prices substantially just before the Groupon 'discount'."
[http://www.theatlantic.com/business/archive/2011/05/why-
does...](http://www.theatlantic.com/business/archive/2011/05/why-does-groupon-
work/238706/)

Zynga: "I Did Every Horrible Thing In The Book Just To Get Revenues"
[http://techcrunch.com/2009/11/06/zynga-scamville-mark-
pinkus...](http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus-
faceboo/)

------
amirhhz
Is this something the the AirBnB guys would put on their YC app form if they
were applying again? And then what would PG & co make of it? In fact, did pg
know about this or encourage it in the first place?

Answers to these questions might be a good test of whether they should have
done it or not.

------
tomkarlo
Everyone's focused on the ethics here, but if this is indeed what AirBnB was
doing, isn't it a massive (and repeated) violation of Federal laws on
unsolicited emails (for one thing, you're required to identify yourself
properly) and likely other rules as well? What this article alleges isn't just
questionable marketing practices, it's potentially deceptive / illegal
marketing.

~~~
baudehlo
Yes. It's a violation of the CAN-SPAM act.

~~~
throwaway61802
Do you drive 66 MPH in a 65 MPH zone? This is hardly breaking the law. This
would have been perfectly legal in CAN-SPAM if they added three things: an
unsubscribe link, a physical mailing address, and mentioned it was an ad. It
probably would have been even more effective.

If you want to stop spam, don't rely on bureaucratic processes to resolve it
through legislation. Build a spam filter, or do some simple pattern
recognition so you know that the same message sent 100 times isn't a
legitimate inquiry to a posting.

~~~
vacri
So... they didn't do the things required to make it legal, but you claim it's
legal?

"Acquit my client, your honour! It wouldn't have been murder if he hadn't have
killed them, so he did nothing illegal!"

------
ChuckFrank
Clearly the unethical part of this discovery is that Airbnb used 'shell' gmail
accounts to do their work. Instead they should have found a way to present
themselves with honesty and integrity to future members.

What are the good reasons for Airbnb's success and valuation? Are there any
stories about their actions that inspire both confidence and congratulations.
(aside from their Obama O's and Capt'n McCain flash success).

~~~
psawaya
I agree. As if they're fooling anyone pretending to be an anonymous stranger
from gmail who just happens to love promoting airbnb.

~~~
pdenya
Didn't they fool pretty much everyone? Even the author only had a suspicion
and resorted to some (impressive) tests to verify.

~~~
psawaya
Do real humans send out advertisements to strangers on behalf of websites?
Making sure to cite pageviews?

Don't get me wrong, I'm glad he confirmed his suspicion before blogging about
this. But even one e-mail like that is suspicious.

------
BYurgi
> After harvesting email addresses (I only grabbed real email addresses, not
> anonymous craigslist addresses) I did one email blast to people that were
> advertising vacation rentals on craigslist...My results: 1,000+ vacation
> rental owners signed up and listed their properties on my test site.

He's missing a few steps... How many email addresses did this dude harvest and
blast to get 1,000+ people to sign up for his special vacation rental site?
What did the email say that he sent out? Was he also sending them from
throwaway gmail accounts? What were his tactics?

This guy needs to follow up with more details. All he's shown is that at some
point he posted 4 vacation rentals to Craigslist and he got 5 emails linking
to AirBNB.

His findings rely on the fact that he got 1,000+ people to sign up their
vacation rentals on his site after spamming some number of emails he admits to
harvesting.

The "test" site he made (he's since edited it out), but google cached it
<http://bit.ly/iOPWi5> is www.mimbeo.com.

A quick look at the press page (<http://mimbeo.com/vacation-rentals/press>)
and they have press releases announcing they got 1,000+ properties in one
month: [http://www.prlog.org/10408565-mimbeocom-
reaches-1000-vacatio...](http://www.prlog.org/10408565-mimbeocom-
reaches-1000-vacation-rental-listings-in-its-first-month.html)

Here's a quote:

> "It's a no-brainer" said one of the founders. "We are offering owners and
> managers the same great service they receive from the pay-for-placement
> sites like VRBO & Homeaway. Not only that, but we broadcast our members
> listings to Facebook, Twitter, Myspace and more - and we do it all at no
> cost. We like to think of ourselves as the 'craigslist' of vacation rentals
> - with the added bonus that the listings do not expire - which is the main
> complaint we have heard from craigslist users."

Seems odd to go through all that for a weekend project "test" website. What's
this guy's deal? This seems weird...

~~~
Eternal
True this guys methods are questionable, as well as his objective.

But if his claims are true than both and AriBnB was faking user
recommendations to gain users than they should get criticized for it. Even
more so if they systematically violate Craiglist ToS.

------
allanscu
Good research. I don't think this is anything new. I'm familiar with a few YC
companies that use CL as a method to get their supply (in this case vacation
rentals).

~~~
windsurfer
This is unethical.

~~~
orenmazor
though successful.

~~~
palish
Though unethical. If growing a billion dollar company means setting aside what
makes me a good person, then I wouldn't want a billion dollar company.

Nor would I want to work there.

------
euroclydon
One day someone will come along and scrape the data from that "clunky and
expensive AirBnB" to start an XX million dollar startup.

------
techcofounder
can we please get a response from one of the AirBnB founders?

~~~
alain94040
I second that. What scares me the most is that no one from AirBnB came on that
thread to strongly deny this article. And you know they read HN a lot and post
often.

So I'm sad.

~~~
kanamekun
I'm sure that their attorneys have let them know that acknowledging that they
sent out spam would expose them to massive damages under the CAN-SPAM laws. So
AirBnB can't really acknowledge what they did and try and move on...
financially, it would be ruinous for them. They are probably hoping that the
controversy will blow over, until the statute of limitations expires at which
point they can apologize and blame the previous regime.

~~~
alain94040
Since this has been on the front page of HN long enough, I expect more in-
depth coverage from TechCrunh really soon. That's usually how it works. That
could get the ball rolling.

(I know TC has its critics, but they are exactly what's needed for this kind
of story)

------
Joakal
Seems to be happening for over a year so far.

> It never fails that I get at least 20 marketing emails a day from airbnb
> when I post a property on craigslist. I hope they do more of these PR stunts
> than filling up my inbox with unsolicited messages.

<http://techcrunch.com/2010/06/21/airbnb-brian-chesky/>

------
marcamillion
Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell
yes. But is it "wrong" ? I don't think so.

I always thought that getting that first set of customers that will take you
to product/market fit was going to be easy. What with the Twitterverse,
Facebook and all and sundry. But let me tell you, from experience, it is DAMN
HARD!

I guess the true test of whether or not this is 'unethical' is whether those
people that signed up felt scammed after using the service.

If I were one of those people that got that email, sure I might feel a bit
'weird' that they presented themselves as 'Jill D' and not AirBnB, but after
going through what I have been doing the last few weeks - trying to get
customers - I can't say I would be upset.

~~~
thomasgerbe
"Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell
yes. But is it "wrong" ? I don't think so."

I post a listing on Craigslist specifically saying it's not "ok for others to
contact me about other services, products or commercial interests" (an option
in Craigslist) and then a business tries to convince me to use their site
using a disguise DESPITE clearly stating that I don't want to be contacted?

No, I'd say the true test of whether something is ethical or not is whether it
violates rules and/or the choices of a user. Then again, I'm the type that
actually wants businesses to respect my decision.

~~~
marcamillion
But wouldn't you say that's a bit unreasonable given that if you listed your
apartment/house for rental on Craigslist - it can be safe to assume that you
are interested in renting your house/apartment, no ?

I think every 'savvy' user always checks those boxes, but if there is an
option that allows you to actually fulfill your original intent - i.e. you got
no hits on Craigslist, but with AirBnB you have tons of requests and make a
ton of money, wasn't that a win/win - even though they used a 'grey' tactic to
reach you.

You say you don't want to be contacted, but that's to protect you from emails
from the Nigerian prince and the blatantly obvious annoying spam. But things
that are targeted at you, and can add value - I think it would be safe to say
it makes sense in those cases.

~~~
andymatic
They said they didn't want to be contacted. It isn't up to others to decide
that they are a special case. Any marketer would find the wiggle room to make
their email a special case.

------
Lucadg
I lead a group of guys trying make money online with the rental business, so
they can travel. Each one is responsible for an area and it's hard to get new
owners and apartments, believe me, but we never resorted to spamming. Instead
we contact the Owners directly and openly, then we go to meet them personally
and see the apartments, when possible. This way is much slower, but at the end
we have much better listings for our customers. We'll never be a billion
dollars company of course.

------
buildorfail
I do not want to argue if this type of stuff is good or bad. But I do want to
point out to you all that list of tech gods is full of similar stories. Off
the top of my head:

MySpace started out purely through spam...Tim Ferris started out in online
supplement sales...People complained about Plaxo doing black hat stuff... they
sold ok. People complained about Zynga ripping off other games and about
breaking every Facebook platform rule there was... look at Mark Pincus now.
People complained about Facebook's Mark Zuckerberg stealing their idea... he
does not care.

~~~
keiferski
"Everyone's doing it" isn't a valid excuse.

~~~
buildorfail
you did not read the first line of my post. My point is just that this is
nothing new...

------
kcurtin
i think people would have a much different view if this wasn't airbnb and was
a less reputable company. The things described in the post definitely
constitute as spam and violate CAN-SPAM...but these types of tactics do work
(if they didn't we wouldn't have spammers) and there wasn't anything malicious
about it.

~~~
palish
If there were nothing malicious about what they did, then why didn't they
advertise as fake men, instead of as fake women?

------
nhangen
If you were an investor, would you feel lied to, or is this a cause and not an
effect?

~~~
peteforde
There's no such thing as a generic investor. Every investor is different, with
unique values and tolerances.

Some investors would reward this; many would encourage it. It depends on why
they are investors, right? Those looking for a significant return would take a
fairly hard-lined "and the problem is?" position.

------
rvanniekerk
Good read, although, I wouldn't necessarily consider advertising your services
to people already listing vacation rentals as "blackhat".

Blackhat insinuates that someone is being gamed, in this case, both the home
owners and AirBnB are benefiting (maybe craigslist is losing out?).

~~~
helium
Of course it's blackhat. They're sending unsolicited, automated spam to people
who explicitly stated that they didn't want emails regarding commercial
interests. There is a big difference between advertising and spam.

~~~
pbreit
"explicitly stated" = "did not change the default"

~~~
jasonwatkinspdx
You still have to respect opt out, even if it's the default.

------
Zakuzaa
Curious to know PG's opinion on this.

------
dreamdu5t
AirBnB is not a "Billion Dollar Company." Investment is not revenue or profit.
The revenue numbers I heard are in the 5-10 million range.

When AirBnB posts a billion dollars in revenue, then it will be a "Billion
Dollar Company."

~~~
btilly
Sorry, you're absolutely wrong.

The value of X, for any X at all, is what someone else is willing to pay for
it. That is how markets work. Any kind of market. And it works for everything
from pricing apples to pieces of art to companies.

If people are willing to pay $1 billion for your company, it is a billion
dollar company. If nobody is willing to pay you a dime for it, it is worth
nothing. Your revenue is an input factor into what people are willing to pay,
but doesn't determine the price.

If you study financial theory, the theoretically correct price for a company
is the "expected present value of future revenue". Meaning that if you look at
all future revenue that it should ever make, divide that revenue by a discount
factor for the fact that a dollar tomorrow is not worth a dollar today (and
further discounts for risk), that number should be the present value of the
company.

So a company with little revenue and good growth prospects may be worth much
more than a company with great revenue which is going off of a cliff. It is
worth this both in practice and in theory. And anyone who says otherwise
simply doesn't understand how to value companies.

Note that in practice, in illiquid markets (which stock in privately held
companies always is) the variance of market value from the theoretical
relationship becomes wider. We still price companies based on what someone,
somewhere, was willing to invest in it. We do that because someone educated
people, who is paid to get this right, with possession of more facts than we
probably are, decided that this was a reasonable price after doing research.
They may be wrong, but the last price paid is the best market indicator of the
value of the company.

~~~
dfranke
All this is true, but has no bearing on the common use of language. When a
trader refers to Acme corporation as an $N company, he is indicating that $N
is its annual revenue, not its market capitalization.

~~~
btilly
_Citation needed_

Common usage that I've seen is to refer to the market cap as the value of the
company. For a random example
[http://www.fool.com/investing/general/2010/03/19/how-does-
ap...](http://www.fool.com/investing/general/2010/03/19/how-does-apple-
become-a-300-billion-company.aspx).

The other common usage that I've seen is to refer to a company as being worth
_X billion a year_. In that usage the _a year_ bit is not dropped, because
dropping it would introduce confusion with the first common usage.

~~~
qq66
I have no horse in this race, but $x billion company has traditionally
referred to revenues. The usage of "___ company" to mean valuation is new
(last five years), rare among traditional press outlets, and overrepresented
among the startup/Silicon Valley crowd. The idiom may be changing in meaning,
but if so, it's in the early stages.

~~~
btilly
Hmm, that doesn't fit with my recollection.

But when I Googled for "billion dollar company" then "million dollar company"
the first usage I found that wasn't in some way tied to startups was
[http://www.goodnewsnetwork.org/most-popular//red-mill-
goes-t...](http://www.goodnewsnetwork.org/most-popular//red-mill-goes-to-
employees.html) where it clearly refers to revenue.

Ah well. Around here there is no question which usage is more common.

PS You may be amused that the top hit for "x billion dollar company" is
<http://hackerne.ws/item?id=2033232> which involves you.

------
tzm
Unethical? possibly. Does it piss me off? Sometimes. Do I care? No.

I generally expect to receive spam from CL when posting or responding to ads.

~~~
vacri
If you don't care, why would it ever piss you off?

~~~
tzm
Do I ultimately care? No. Lots of other things to focus on.

------
brown9-2
When someone says "Craigslist spam!", is the first you think of a) spam posted
to craigslist as listings, or b) emails advertising something
(surreptitiously) to people that have listed their property on craigslist?

Not that the latter isn't "spam" of a sort, but it doesn't feel quite like
"craigslist spam".

~~~
hollerith
Although it is spam of some sort, a better description would probably be
"using sock puppets".

------
adrianwaj
Why doesn't and didn't craigslist check for the almost identical emails if
they are going through their servers? They could likely dig them out if they
keep archives by searching on airbnb, nicest, largest, page, views. Airbnb
have the funds now to cough up.

~~~
wickedchicken
Probably for safe-harbor laws. As soon as they start inspecting things for
content instead of server abuse, they are then way more involved and become
liable for a lot more shit. They already got a lot of heat from their adult
services section, they don't need any more. It's the same reason banks _do
not_ want to know what is in your safe deposit box, even if it's mundane.

~~~
adrianwaj
I hear you, however this is a competitive issue. It's an offense to craigslist
by airbnb on craigslist, not an offence from person A to person B via
craiglist. I suppose the first issue to look at is whether harvesting and then
spam is against the terms of service. The content of those emails isn't
genuine, Jill and Sarah aren't real people, they cannot judge the beauty of
the properties they proclaim to have seen. It wouldn't be completely
Winklevossing for craiglist to be pissed off.

If they turked each property one-by-one, I think that might be fair game.

------
dhbanes
I wonder what nickb thinks of this.

------
gigantor
Blackhat or not, this is a great example of how there are very viable
alternatives to SEO in terms of internet marketing. The ever changing rules
and laws of search engines unfortunately make or break a vast majority of
online businesses.

~~~
Hisoka
I agree. What AirBnB did is the modern version of creating thin content farms
to spam Google search results.

------
wickedchicken
For the record, I don't think this is that bad of a thing. If all of this is
actually true (I'm not 100% sure it is), then it's certainly not on the level
"actual spammers" perform at. Spam is basically unwanted and harmful
advertising, and nobody complains when someone gets e-mailed an actual useful
relevant thing out of nowhere. If the thing you're being e-mailed _is more
relevant than the ads GMail is showing you_ then I'm not sure you have a right
to complain too much. Sure it may feel slightly off, but calling them
"completely unethical" is going slightly too far.

~~~
thomasgerbe
When you go against the Terms of Service, the CAN-SPAM act, and the wishes of
the classified ad creator, I'd say that's pretty unethical.

------
SkyMarshal
_"Some very famous investors have alluded to the fact that they look for a
dangerous streak in the entrepreneurs they invest in…and while those investors
will never come out and tell you what they mean, this kind of thing is
probably what they mean."_

Eg, be naughty, not evil. Whether they crossed the line or not, dunno. It's a
far cry from Microsoft intentionally leveraging their OS monopoly to destroy
companies and corner industries back in the day.

------
jmtame
In Startups Open Sourced, he says Airbnb "tried everything" but he says that
press is the single best source of their growth. Having the happy customers
came in second, but would be interested to hear if this helped them much. It's
hard to believe that Craigslist is the reason why they'd be so successful when
the product is so easy to spread by word of mouth and press.

------
throwaway61802
Nobody here knows how much of Airbnb's growth is driven by Craigslist, it's
purely speculative. Until Airbnb confirms, you'll never know but you'd have to
be naive to believe that you can build a company up to $1 billion by firing
off a bunch of emails. Nobody here has even suggested the possibility that
"Airbnb became a billion dollar company" by suggesting how many Craigslist
rentals are posted each day, along with a standardized conversion rate.

I'm surprised to see how negative the comments are on this. This is like Yelp
paying people to write reviews. Shady? Sure. Illegal? The only part of the
CAN-SPAM Act Airbnb broke was (1) not including a physical mailing address,
(2) not mentioning it was an ad, and (3) not including an unsubscrive link.
Otherwise, CAN-SPAM is laughable at best. It's hardly enforced. Don't expect
Craigslist to come at Airbnb with a lawsuit, it'd probably not hold up in
court.

I see this instead as one of Airbnb's many tactics to try and reach out to
users. If you look at this logically, they've been covered by the press a lot.
The amount of growth they might (or might not) have reached doing this would
hail in comparison to how much they obtained by press and simple product and
customer development.

~~~
yardie
I see the astroturfers are coming out in their defense.

------
aresant
"It is a story of pure unadulterated hustle. And I love it." - Fred Wilson
talking about the AirBNB team's Obama cereal hustle.

I'd like to borrow his words in regard to this post.

Fred's original post - <http://www.avc.com/a_vc/2011/03/airbnb.html>

~~~
ChuckFrank
'unadulterated hustle' and 'unscrupulous behavior' are surely not synonymous.

~~~
jgmmo
It's true. It's the difference between 'hustle' and 'hustler'. I think most
confuse 'hustling' in the sports sense, with 'being a hustler' in the black-
market sales sense.

I think Fred Wilson's quote is referencing entrepreneurs who 'hustle' and try
very hard/use alot of energy in the sports analogy --- and NOT entrepreneurs
who are 'hustlers' and use shady means to fulfill their needs.

~~~
danenania
In this context I think it's become a blend of the two.

------
bproper
Does the new "illegal hotels" law have any effect on AirBnB?

[http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-
wi...](http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-
with-2k-bookings-a-night-but-many-listings-may-be-illegal/)

------
ivankirigin
I hadnt heard about anything like this from the airbnb folks, but I do know
they have had successful advertising campaigns since over a year ago. So the
basic premise of this article, that their growth source is a big mystery, is
false.

------
mbertrand
Interesting amount of negative feelings towards AirBnB, and as a disclaimer I
am a big proponent of "Do, and ask for forgiveness". This is what startups are
all about, using available resources to their advantage and getting out their
and hustling (even if it involves bending the rules a bit). Obviously rental
owners (their target) were not to upset about being told of another resource
to list their site on otherwise they would not have continued this approach. I
can see where some of you are coming from in feeling violated/disturbed by
this but given that a.) it appears to have worked b.) they informed users of
something they wanted c.) no one complained (until now). I this that it was a
very effective/creative way to solve their supply problem and it obviously
worked.

------
djloche
Supposing Dave Gooden is correct...

The method seems risky at first, but when you think about the risk and how
they solved the problem, it is perfectly acceptable.

To catch danger from unsolicited email (from the end recipient), the mail must
first be reported. A complaint must be made. If the recipient doesn't report
it, there is no action taken. Most of the time, it doesn't take but a few
reports and then there are people digging into the scheme trying to figure out
who is abusing the end users. This is because most people sending unsolicited
email are not able to directly target their market. Viagra spammers have to
send out boat loads of messages just to hit their market of old men with
erectile disfunction who are too embarrassed to get the pills through
traditional means AND not web savvy enough to realize that giving out their
credit card information to a fly by night company selling drugs isn't the
smartest idea.

Simply put - if you can directly target your market AND you have something
that is game changing to those people - eg a superior product / experience /
service compared to their current business efforts, you won't get flagged for
spam. They'll check out your site, think it's the greatest, and become your
customer because you make them money.

The problem for AirBnB was that Craigslist has evolved to try and prevent
unsolicited mail of all kind - because most people or companies are NOT able
to hit the sweet spot where they are sure that what they have to offer is
exactly what the recipient wants, but doesn't know it until the email is
received.

Having interns, family, friends, or other people who are genuinely excited
about your business send email recommending it to exactly who will want it,
without revealing their relationship to the business, is an acceptable, if
temporary solution.

But you only need to build momentum, because if your product is amazing, the
recipients of the previously unsolicited email will do all the word of mouth
marketing for you.

So before you go and try and repeat this alleged successful route, make sure
you have all the pieces to the puzzle before giving the mission a green light.

[cite: personal past experience at an ESP watching and doing the digging in
resolving spam/fraud complaints]

------
theklub
It really shouldn't shock anyone that very few people follow the rules.

------
temphn
AirBnB raided Craigslist for users. Those users made more money and had a far
better user experience on AirBnB to boot. Not exactly your traditional
Viagra/Nigeria type spam.

When the end doesn't justify the means, sure, complain about the means. But
this is not such a case.

~~~
jacoblyles
We shouldn't forget that Craigslist is an evil monopoly

~~~
peteforde
Bullshit. Citations please!

------
hnsmurf
"It is a literal gold mine for black hats that learn how to exploit its
millions of users and curtail its terms of service."

Either he doesn't know what "literal" means or I need to get a pickaxe and
head on over to Craigslist.

~~~
dools
Modern English speakers really need to sort out their usage of 2 words:
literally and physically.

I think we need a movement against improper use of these such as "do I have to
physically login and chage the details" rather than manually, and this
"literal gold mine" which is clearly metaphorical.

What can we call it? How can we stem the tides before the dystopian precitions
of Idiocracy become a reality?!?

~~~
hnsmurf
Since I've already derailed this, also what's up with everyone saying "I could
care less" when they mean "couldn't"?

------
bakbak
just wondering what s/w do you use for mass mailing and craiglist email
harvesting? without getting sandboxed / blacklisted ...

~~~
omarchowdhury
You don't.

------
rkon
These types of messages definitely appear to fit the CAN-SPAM Act, which
covers " _any electronic mail message the primary purpose of which is the
commercial advertisement or promotion of a commercial product or service_ ".

Airbnb may be spending that $100M sooner than they thought: " _Each separate
email in violation of the law is subject to penalties of up to $16,000, and
more than one person may be held responsible for violations. For example, both
the company whose product is promoted in the message and the company that
originated the message may be legally responsible._ "

[http://business.ftc.gov/documents/bus61-can-spam-act-
complia...](http://business.ftc.gov/documents/bus61-can-spam-act-compliance-
guide-business)

~~~
UtestMe
Nobody will ever be able to legally prove the gmail accounts were created for
and by AirBnB. Actually, I don't think those accounts were created by AirBnB
guys, but by a third party, for AirBnB use. Ad extremis, the AirBnB founders
might as well plead they never knew what was the exact method this third party
will use to generate traffic and users.

~~~
mattmanser
Nobody? Get the IP addresses that access those accounts from GMail. You're
going to find them all coming from one IP or a small number of American IP
addresses. Ask the ISPs who they are. Job done, culprit found.

You think they'll be using anonymous proxies or something? I doubt it.

~~~
UtestMe
I think google won't let you bind an email to an ip

------
forgotmyuser
Glad you did all that testing to find something so damn obvious. Look at how
they rank on google - they don't. It was really obvious they were spamming
craigslist.

~~~
kongqiu
If it is/was that obvious, care to share any other 'obvious' practices that
may not be common knowledge?

~~~
forgotmyuser
blackhatworld.com > everything you need to know.

------
Hisoka
Whether or not it's wrong or right doesn't matter.. what matters is are there
consequences? If not, then the guys at AirBnB probably could care less, and
are laughing and enjoying cocktails in rooftop bars while the rest of us are
toiling away at jobs...

Remember, we only got 1 life to live.. think about it. Arguing right or wrong
makes little sense

------
johnx123
I believe, PG spammed more than what the two ladies did in CL.

------
tuckbuck
great writeup. AirBnB may not be wrong, but what this means, it that anyone
else can do the same thing .

this definitely reduces their valuation.

------
savrajsingh
alluded, not eluded

------
gorm
Welcome to The Mesh!

~~~
ChuckFrank
I assume that you are talking about this? <http://meshing.it/> the new sharing
society?

------
andrewcross
While this is clearly not the most ethical behavior, how many of us wouldn't
do the exact same? You gotta do what you gotta do.

------
wickedchicken
Do you know what else is scummy? Writing a smear webpage about a competitor
complete with intrigue involving leet "black hat software" and linking that
page to your for-profit clone (mimbeo.com). For all we know this dude
falsified the AirBnB e-mails himself just to make them look bad.

~~~
thomasgerbe
Found via Google Search:

<http://www.vacationrentalscommunity.com/forums/t/2767.aspx>

~~~
wickedchicken
The author already claims he has access to professional spamming tools. All he
has to do is spam people on craigslist pretending to be AirBnB in a way that
can't be traceable to AirBnB. Then he writes an article complaining about
AirBnB and asks "why would they hide behind shady tactics?"

You get maximum impact if you wait two years and post when your competitor
gets really big so everything is forgotten and really untraceable.

~~~
baudehlo
Your comment is ridiculous. Can you really imagine someone making a two and a
half year plan to set a competitor up like that? And in the meantime you're
giving the competitor customers like crazy? Pull the other one.

~~~
wickedchicken
Sorry, I didn't mean to go all conspiracy theory here. I just felt a sleazy
linkbait vibe from the article and wanted to provide my "fair and balanced"
opinion.

~~~
vacri
With all your suspicion, did you bother to check out any listings on
mimbeo.com? I've opened about 20 from various states and they were all listed
in 2009. The site is not current.

------
andrewhillman
Sounds like a lot of people on here are jealous. Obviously they weren't being
ethical, but I think just about every popular web startup does what they need
to do to solve the chicken and the egg problem. I think every single dating
site puts up fake profiles, sends fake msgs, winks and flirts to get started.

------
orenmazor
The author uses the term "black hat" way too much and very loosely.

~~~
rorrr
Spam is black hat.

------
MatthewB
I love this. Being scrappy is one of the best qualities among entrepreneurs.
The attitude of "do anything" to succeed usually results in success not to
mention it is one of the characteristics that PG looks for in founders.

~~~
llimllib
Even when it's illegal? Is this an action that you consider moral but illegal
(re: CAN-SPAM and various state laws)? Should AirBnB's investors be worried
about the potential liability of lawsuits?

> Each separate email in violation of the CAN-SPAM Act is subject to penalties
> of up to $16,000

\- [http://business.ftc.gov/documents/bus61-can-spam-act-
complia...](http://business.ftc.gov/documents/bus61-can-spam-act-compliance-
guide-business)

~~~
kwis
I'm very curious if they misrepresented the nature of their growth to their
investors. If they did, they could be in violation of securities laws, in
addition to CAN-SPAM.

