I'd love to see more of these genuine, high-level business conversations. It can be difficult to learn and understand what really goes on "at the top", because probably every top exec is under some pressure to appear superhuman.
It is interesting to see how PG is selling this to Fred. This is exactly the kind of people you want to work with in a startup. People who believe in you and are not afraid to show it.
This pg quote has an r/LateStageCapitalism vibe to me: "They just arrived back from NYC, and when I asked them what was the most significant thing they'd observed, it was how many of their users actually needed to do these rentals to pay their rents."
>So I think it can scale all the way to the bed and breakfast market<p>> But I am not sure they can take on the hotel market<p>Not an inaccurate assessment.
This is just from memory. Correct me if I’m wrong.<p>2005: mobileride.com in Boston, phone-based ridesharing with voluntary cash exchange, shut down in 2006 with regulatory warnings<p>2006: zipcar hires some of mobileride team and enters rideshare business with shared zipcar rentals among BU students<p>2007: zimride starts with pre-arranged rideshare at Cornell, works with campus transportation directly to keep it legal.<p>2007: google rides opens as a platform for several tiers of ride hailing services, dominates the market and then shuts down in 2010<p>2010: Uber starts in NYC as high-end livery, not sure if they got the license or not, but tweaks business model to have many on-demand part-time drivers instead of full-time, but pays much better portion of fare.<p>2012: Sidecar in San Francisco allows anybody to accept rides and mobile payments but calls them gratuities instead of fare. Regulators show their will to inaction. Uber responds with massive push into taxi services, completely flouts regulation, and Zimride births Lyft to do the same. CALPERS is rescued from bankruptcy by investment in AirBnB and Uber.
> Our two junior team members were enthusiastic<p>> The three "old guys" didn't get it<p>I think that's the main reason why they passed on Airbnb. The VCs themselves were too far away from the initial target market, and could neither relate with the "airbed and breakfast" user base, nor see how it could scale.
While this is an interesting post to read, it is also about 7 years old.<p>It's quite cool how the transcript goes to say "There's no reason this couldn't be as big as Ebay. And this team
is the right one to do it."<p>Turns out that literally was the case! Good call Paul!
Note there is a survivor bias here.
Might be even more interesting to see PG's email exchanges with other VCs on some then successful but later failed startups.
I would be very curious to see what barriers to entry AirBnB has developed vs. say, Uber. While both are marketplaces, Uber benefits tremendously from understanding traffic patterns, from seeing how people ride, from being able to give drivers the option of traveling certain directions, etc. All of that data is worth billions of dollars and not easily discovered, and technically quite challenging to gather and exploit.<p>From what I can tell, AirBnB has a <i>brand</i> and a web application. Technically, I can't imagine the latter is more complicated than the average e-commerce site delivered at scale. I am having trouble understanding how big data can create an advantage (maybe to help owners price their rentals?). If a competitor pops up, there's no reason owners can't list on multiple sites without facing any penalties.<p>AirBnB is not a company I'd invest in for the long term, while I would invest in Uber/Lyft. So, what am I missing?
Airbnb, like Uber, took advantage of regulatory inefficiencies instead of market inefficiencies. The model is do something (in the minds of regulators) illegal, quickly enough that you can become large enough to get a seat at the table when the regulations are reworked.<p>The counter example to these companies are the ones that quickly raised capital to dump scooters on public streets before they could be shut down by cities. None of the players were able to grow large enough to have a say in the reforming of the laws that regulate them (SF learned its lesson from Uber and moved quickly, limiting their participation to asking for proposals).<p>This is framed to present a VC as "missing out" in the financial sense. Ultimately a VC is liable to its capital partners in far more ways. If Airbnb had all of its assets seized by the federal government as an illegal enterprise (just as an example), we would be applauding their foresight and brilliance in avoiding this otherwise lucrative opportunity.
I wonder what was the redacted phrase that was strategic to what AirBNB was doing (I'm sure we might know by now, but not know it was being discusses)
Something I often notice when people complain about AirBNB being a problem in their city- Their city has 'peaked' like a star Quarterback in High school.<p>In my city which is experiencing growth, I find my AirBnB guests are often business travelers who are infulencers in their respected communities. There are some exceptions like college kids on summer vacation trying to hook up away from their parents house- but mostly business people.<p>I see complaints from Europeans about Tourism, but that should be a reflection on the achievements of their ancestors rather than the achievements of the current and recent generations.
This is bullshit. I fund my startup by consulting 1-2 months per year at 40k/month. Zero people think it is impressive. But $25k of Obama cereal makes a better story.