
Airbnb - Straubiz
http://www.avc.com/a_vc/2011/03/airbnb.html
======
vizzah
I tried Airbnb several times, looking to find an apartment in London,
Barcelona, NYC.. but it was only a waste of time for me, unfortunately.

The idea is great, but there are just too many people renting their properties
who simply have no idea what they are really doing and how to do it
responsibly.

I was receiving answers like 'Sorry, my flat is not available - it is a very
short notice" from the renter, who's calendar was 'available' for my dates
weeks in advance. From others I heard "This property isn't available, but I
will offer you this and that", which were not even comparable. Then I came to
the realization to avoid dealing with those who maintain multiple listings, as
it's their main trick to lure guests with one available property and then try
to market what they have really available.

All in all, there are just too many time wasting opportunities on Airbnb right
now. I would rather pay a bit higher to deal with someone definitely reliable
and who does it professionally. I think it will take few more years for Airbnb
renters to pass the natural selection and earn enough reputation to be easily
discoverable among those who rent their flats out to get a payday advance..

~~~
mrchess
My experience was half-half. I got a pretty good place, but since I was new to
the area (my first visit), I was displeased when I got there and found the
surrounding neighborhood very sketchy. I mean, the host was nice but I didn't
want to go out past 8pm for fear of my safety. Hopefully in addition to photos
of the room, they will also encourage photos of surroundings at both night and
day!

~~~
jscore
Out of curiosity: what city and neighborhood was this?

~~~
mrchess
Around this area: 239 8th Street, San Francisco, California, United States.

I have since learned that it is the norm and possibly fact for locals to
realize this area is a bit more sketchy. But like I said, I'm not from Cali!

~~~
jscore
Yeah, SOMA is fine. Just steer clear of Hunters Point, and you'll be ok...

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pclark
Dropbox and Airbnb are two of the most revolutionary products (alongside the
iPhone, 802.11b, etc) I have ever used. These two companies, amongst others,
are the answer to when people challenge that no "world altering company" will
come from a startup accelerator.

Dropbox has literally changed how I (and dozens of my friends) use computers.

Airbnb has opened the door to affordably travel the world. I was going to go
to Barcelona for a weekend surfing trip in a week or two, and flights were
£100 (from London) and hotels were £75+ per night. With Airbnb, I found an
amazing apartment for £30 a night. That is a huge.

Traditionally, you have a hotel room - but that is just a _room_ with no
kitchen, meaning eating when travelling almost requires you to eat out, hugely
expensive. With Airbnb I can find an apartment with a kitchen, and purchase
local produce for lunches and such. Being able to request wifi in apartments
is an insanely great feature if you're able to remote work.

I find the Airbnb website pretty bad if I am honest (incidentally, I them tons
of feedback on it a few days ago) but I hope they are going to fix it. Asking
me where I want to travel and only giving my a search box is mediocre, the
benefit of Airbnb is that I can travel to places I have never even heard of,
for less than traditional holiday resorts.

A lot of the best startups are the ones were you can use assets to brutally
destroy the present market incumbents, and Airbnb is a perfect example of
using a hotels largest advantage (erm, hotels) as their weakness. Airbnb will
obliterate all present hotel companies eventually.

I'd bet money that Airbnb will be the largest exit of all batches Pre-2010
(which is when various friends' startups (and myself) were accepted, and well,
we're competitive like that)

~~~
nupark
_Dropbox and Airbnb are two of the most revolutionary products (alongside the
iPhone, 802.11b, etc) I have ever used._

I can't speak to Dropbox, but Airbnb isn't really a revolutionary idea from
the user perspective (although they get a lot of play here for being a YC
company).

<http://www.vrbo.com/> has been around since 1995. They were purchased in 2006
by HomeAway, who just filed for a $230 million IPO.

VRBO's model is different, in that they provide a classifieds service rather
than actually handling the transaction directly; on the other hand, I've had
much better luck finding good temporary apartment rentals in NYC using VRBO.

I'm not saying that AirBNB isn't useful -- or that there isn't some value in
them handling transaction directly, but rather, that they're not really that
revolutionary, and should they succeed in bridging the gap from "rent an air
mattress" to "rent unlicensed privately managed hotel rooms," they'll likely
find themselves falling afoul of local regulations and the neighborhood's ire.
The "Three Big Myths About Illegal Hotels" are a good read:

<http://www.frommers.com/articles/6912.html>

~~~
pg
You have a mistaken view of what makes a technology revolutionary. Sometimes
what seems to outsiders like a minor design tweak makes something immensely
better. For example, Watt didn't invent the steam engine. His big discovery
(he also made several smaller ones) was something called the separate
condenser. Unless you're fairly knowledgeable about steam engines, you'll have
to look that up to know what it means. But this tweak to Newcomen's design was
so important that it caused a qualitative change in the way steam engines were
used.

~~~
lurker14
Is AirBnB eating VRBOs lunch? Reaching an untapped market?

Or is AirBnB a small (and staying small) player getting disproportionate lot
of attention in the YC/HN world because they have friends here?

I'm not saying AirBnB is wrong or unsuccessful, just suggesting that sometimes
"world-changing" really means "my friends and I personally like these guys
better, so the other ones don't count".

~~~
pg
Yes, Airbnb is eating VRBO's lunch. They and Dropbox are at this point the
most successful of all the 253 startups we've funded.

Fred Wilson knows some of the details. That's why he wrote this unprecedented
post about missing them.

If you don't understand the details of a situation, why not default to being
nice instead of mean? Just look at the contrast in tone between Fred's blog
post and your comment.

~~~
nupark
I'm curious -- VRBO could easily pivot and handle transactions themselves,
directly. Instead they've chosen to offer optional insurance:

<http://guarantee.homeaway.com/vrbo/>

Why is that? Intuitively, it seems like handling transactions directly would
paint a target on their back in regards to the unlicensed hotel business,
where regulatory and community concern appears to be a growing issue -- but I
may not understand the details of the situation.

~~~
raghus
_I'm curious -- VRBO could easily pivot and handle transactions themselves,
directly. Instead they've chosen to offer optional insurance:_

In general it is true that BigCo X could do function/feature/integrate Y and
totally kill Startup Z - but it doesn't happen all that much.

~~~
nupark
_In general it is true that BigCo X could do function/feature/integrate Y and
totally kill Startup Z - but it doesn't happen all that much._

I asked _why_ they haven't done it. You haven't really addressed that --
you're attacking a strawman. I'm simply curious as to _why_ VRBO's parent
company hasn't decided to handle bookings directly.

VRBO already supports transaction processing -- they use it to sell the
listings. They also went to all the effort of providing a consumer insurance
service. Why didn't they add support for processing the booking transaction
directly and guarantee it as a matter of course?

My guess is that because to do so would wading into a regulatory quagmire, and
as an established company (rather than a disruptive startup), they have more
to lose. Maybe Airbnb knows this, too, but is hoping to get away with it
anyway -- at least long enough to either change the regulatory environment, or
see their exit and leave the problem to someone else (see: napster) ...

.. but I could be wrong, so I asked the person who has the details :)

~~~
kerryfalk
I could be wrong, but I suspect this is actually a problem with processing the
transaction itself. Processing in the way that AirBnB does is typically
frowned upon within the card processing industry from what I've discovered.

The processors and the banks have the power and can shut a merchant off if
they determine that they're not playing by the card association's rules. The
method that AirBnB employs is referred to as Third Party Payment Aggregation.
They're processing payment on behalf of the hosts.

Venturing into this territory for an established company would likely cause a
lot of pain. They might need to establish a relationship with a different
processor and/or bank who would support the model. If they were to switch
without first talking to the bank and processor they would likely be shut down
quickly for violating the terms of their agreement. So it's not as simple as a
relatively minor product pivot for VRBO.

A smaller startup can risk a lot more by carefully walking the line of what
the bank/processor/association will accept. But they're still at risk, I
believe. Unless maybe they have found some way to mitigate much of the risk (I
can think of one or two that would be possible after building brand
recognition), I'm not sure.

So I think you're right with your last paragraph but I think it has more to do
with Credit Card regulation than hotel regulation... but I don't know anything
about operating a hotel.

~~~
picnicman
I own a hotel in Rome and operate a vacation rental site in Europe and
although I don't if this actually concerns them or not, you are totally right.
In France and Italy, for example, if you take the money, you cannot claim to
just be a marketplace like craigslist. He who takes the money holds a
different kind of a legal responsibility that maybe is avoidable in the US,
but is hard (if not impossible) to justify here. I think big companies don't
want to get involved in the tax and legal implications. That said, I don't
understand why airbnb and their financial supports are not more concerned
about this. Either they have a great legal department backing up their model
or they are naive to how different the business environment is in Europe than
in the US.

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lolizbak
It's always good when VCs publicly reflect on missed opportunities. As a
reminder, here is the incredible (and fun) list of Bessemer anti-portfolio :
<http://www.bvp.com/portfolio/antiportfolio.aspx>

------
tuhin
1\. The story about Obama' Os makes it seem so easy to raise $32k. Of course
it does not always pan out the same way.

2\. A VC/firm accepting their mistake and missed opportunity publicly is
amazing indeed.

3\. The best lesson was making sure the same is not repeated, aka Box on the
table.

~~~
netcan
I have the opposite take on #1.

If someone makes it look easy, watch em. Roger Federer makes tennis look easy,
so easy you wonder why everyone doesn't just do what he's doing. The court
looks smaller, the ball looks slower.

~~~
dtran
It is interesting that you chose the "He (Federer, Jordan, Ronaldo, Hank
Aaron, etc.) makes it look so easy" analogy because you generally know if he's
making it look easy during games/matches, it's only because he's practiced it
a million times before. I would argue that he can make that shot or that swing
so effortlessly when it matters most because he's practiced it so many times
more so than because of natural talent or anything else. We tend to focus on
how naturally talented he is because hard work is unglamorous, but talent
really just gets you to that level of competition - from there, it's mostly
just focus, hard work, determination, and of course some lucky bounces that
separate the 10-time champions from the draft-day busts.

Sure, a startup can't quite practice shots the same way those guys can, but
notice that it's usually the same startups that you hear pulling off these
amazing hacks/hustles that are also crushing every feature/product launch, are
always in the press, etc. Reminds me of that Nike ad campaign showing players
making their amazing, signature plays not under bright lights but alone at
dawn over and over: "There are no cinderellas."

------
coffeejunk
worth watching is Brian Chesky talk at Startup School as he goes a bit more
into detail: <http://www.justin.tv/startupschool/b/272180383>

they also have a dedicated site for the cereals (and a song!!):
<http://www.airbnb.com/obamaos>

------
richcollins
_It is a story of pure unadulterated hustle_

I see it more as a story about creativity. They could have "hustled" selling
something that wasn't novel, completely wasting their time. I don't think that
most entrepreneurs lack "hustle" they lack creativity. It's much harder to
develop, and some people don't have a talent for it no matter how much they
try.

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yannickmahe
A sidenote to the story, I find it funny that they sold the Obama O's easily
but not the Captain McCain's.

Could selling themed cereal be an accurate predictor of an election's results?

~~~
lurker14
Cheerios / O's are also a much more popular cereal product than whatever
Captain McCains are.

~~~
yannickmahe
At 40$ a box, I don't think taste is really the issue.

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listic
The story about Obama O's had me excited. I start imagining myself in such
postition and thinking if I would be able to pull such a stunt and the
objections keep popping in my head. I wonder if it's just my fears or maybe
the situation in USA is so different? Please say if the following is true in
your home country:

1\. You cannot go to presidential nominating convention (or similar political
event).

2\. You cannot engage in unauthorised commercial activity (sell stuff) at
presidential nominating convention (or similar political event).

3\. You cannot engage in unauthorised commercial activity (sell stuff) without
proper license, cash register.

4\. You cannot sell food without proper license (stating your right to sell
food), certificate(stating origin of your food; who's made your "Obama O's"?
Are they safe?).

~~~
rbranson
1\. You are mostly right, but in genuine US style, the other events
surrounding the convention have sort of grown to become larger than the
convention itself. It's likely they were selling these at some kind of event
or area not directly affiliated with the convention.

2\. I'm sure this is the case, but they were likely able to circumvent this
rule by not selling in an area directly controlled by the convention.

3\. You don't need some kind of license for selling most goods, but food is
basically a controlled substance. If it's pre-packaged, the packager is
regulated, not the retailer.

4\. Non-perishable food is regulated mostly at the packaging & handling level.

EDIT: They could have also claimed that it was art and not for consumption,
which is a way to skirt the labeling requirements.

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joshbert
If you watch Fred's interview with Chris Dixon, you can see the honest regret
of not having invested in AirBnB. My sincerest congratulations to the guys
over at AirBnb for all of their success. It is truly a remarkable startup.

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jedbrown
What does this story actually show? Did they have some a priori guarantee that
one of the batches would sell out? If so, why not do a small amount of
research to figure out which one?

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rucx
i think that Airbnb's cereal story doesn't only demonstrate the value of
having a hustler in the founding team of a startup, but also the value of
understanding (pop) culture for IT startups, as this cereal idea only worked
because they caught the right cultural wave at the right time with the right
approach. So at least for B2C startups, marketing/branding is an important
contributor to success from an early stage on.

------
Straubiz
A very compelling story! Raising your first $ has rarely seemed so easy.

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expertio
If you are interested, we are also on our way making Airbnb for individual's
expertise. <http://expert.io> But it is just like the Airbnb story, start from
nothing is always difficult.

~~~
romland
Hm, this was a perfect scenario where I wished the colour of the links would
be as "grayed" out as the rest of the down-modded comment. I ended up clicking
it and, well, it's what you'd expect.

I don't mind the odd guy sneaking in a shameless plug here and there, but this
was just a bit too forced and you just made yourself look silly. :/

~~~
fedd
ha ha!

and check the initial post's comment thread: the same comment caught Mr
Wilson's attention.

so not that silly...

