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Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

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Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#101

Post by Jd »

ChuckFrank wrote: post #72
mlinsey wrote: post #68

Earlier quoted context omitted.

This is pretty mild as "calling outs" go. I would summarize your first two points as "there is tremendous demand for this concept". Your first point is that this basic concept has been so successful that governments have felt the need to regulate it to combat its adverse effects, which is a risk Airbnb is pretty well aware of. In fact, all of the adverse effects you list are true of hotels as well, except for "shorti…

Good points. Well stated. I clearly have overstated the VRBO vs. Airbnb customer satisfaction. I've changed it in my original post to reflect that correction.

I just did a quick compare and it looks like VRBO serves the high-end of the market exclusively, with stuff in Manhattan starting around $180/nt, whereas Airbnb starting at $80/nt. That in and of itself should tell you that probably people who only serve the high-end clientele are going to do better on average (e.g. in reviews), yet the market is much larger if you can serve both mid-to-low and high-end, and as far as I can tell Airbnb is doing both.

Which is to say, Airbnb says you have to have do due diligence yourself (which some people won't do, and will have bad experiences), whereas VRBO filters for you, but you will end up paying more on average.

That's to say, if asking which business model is better, I think you have to go 100% with Airbnb. Giving users more power makes them like you better in the long run, and even if there are more flakes, there will also be 10x more enthusiasts (potentially even celebrities which become investors/advisers). Customer enthusiasm isn't something you can immediately capture via looking at reviews, but I think the market is closer to the truth in its valuation then you are in your "call out."

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#102

Post by phishphood »

ChuckFrank wrote: post #59
tonystubblebine wrote: post #55

Earlier quoted context omitted.

It surprised me that VRBO leads in renter satisfaction. Do you have a source for that?

I can't seem to find the exact reference. Though I clearly remember making a mental note of it. See previous post on the topic. http://apps.ycombinator.com/item?id=2333475 See charlie4real comments. Finally, all my friends who rent space in their residences do so with VRBO. Across the board they say that after using and comparing both services, VRBO is a superior service than Airbnb for those wanting to have short te…

very similar to charlie4real - cancelled my airbnb listing and keeping vrbo.com - basically same reasosn, site heavily skewed towards renters, no control over money, wrong kind of renters (short term, always asking for discounts, etc) They do have a market niche, just not applicable for my situation (renting vacation home 8 month out of 12)

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#103

Post by invisible »

rst wrote: post #7

Techcrunch says, "On any given night in New York there are more people staying in homes via Airbnb than there are rooms in the biggest hotel in Manhattan." For comparison: Starwood Hotels (whose brand names include Westin, W, Sheraton, and others) has more than 20 hotels in New York (some quite large), and a market cap of about $11.3 billion. FWIW, Airbnb's commissions are 9-15% of the rate (3% from the host, 6-12% f…

Airbnb does not have many expenses (afaik) besides payroll and low operating costs. Their profit is probably huge considering that. (Whereas a hotel must spend money on electricity for each guest, linens, toiletries, water, elevators, real estate, etc.)

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#104

Post by naeem »

All things considered, this is definitely fantastic. I was watching the TechCrunch TV video of Ashton Kutcher earlier today about his surprise (at the time) investment of Air BNB. Looks like this guy really knows what he's doing when it comes to investing - skype, foursquare, not abnb. Pretty cool.

Anyway, congrats to the abnb team, much deserved!

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#106

Post by impendia »

ChuckFrank wrote: post #43

I've been waiting for some time to call out Airbnb, and I think this is the right time. Firstly, the idea of short term residential rentals is not new. Long before Airbnb major cities, Paris, London, New York, and Toronto were dealing with the issues and the problems of short term / nightly residential rentals. In fact the latest condo boom in Toronto has been ascribed to international investors buying condos explici…

So I agree that cities want to control who can rent what, and where, and that AirBNB is trying to disrupt this.

As you point out, there are negative consequences to this. These are serious, and I don't want to dispute any of them. But I do want to point out a positive consequence.

Recently I needed to stay for two weeks in Princeton, New Jersey for a mathematics conference. I learned to my horror that the only hotel within walking distance of the university is uber-fancy, and costs like $200 a night. If it wasn't for services like AirBNB (I used Craigslist, but would use AirBNB now), I would have had to pay $2800 for accomodation, or rent a car which I would have otherwise had no use for. (Or perhaps there are other options of which I am ignorant.)

Pardon my cynicism, but this is what I believe the people living in Princeton want. They enjoy the small town ambiance, even if it is vaguely faked, and presumably through their city council they push strong zoning regulations which make it impossible to build hotels, and therefore impractical to visit on business.

(N.B. None of this is even remotely unique to Princeton, but that is the one experience I have personally had which sticks out.)

There is a flip side to this (if I bought a $500K house perhaps I would want strict zoning too), but I still hate it. With AirBNB, rentals cost what the market will bear. AirBNB is bringing good old-fashioned free market capitalism where, IMHO, it belongs. I hope they are a wild success.

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#107

Post by pg »

kjksf wrote: post #84
pg wrote: post #20

Earlier quoted context omitted.

I can think of cases where startups have found no one to invest, and have ended up doing well. This is where something like YC can help, actually; we can tell people candidly whether we think it's the investors who are wrong, or the startup.

You're assuming that you're more likely to be right than other investors. There's an adjective for that kind of thinking, which I won't use because in context of hn it would be downvote suicide. And yes, I know you're THE pg, but other investors, like Fred Wilson, John Doerr or Marc Andreessen are also THE investors. The argument that I would find more persuasive would be that YC can help because it's willing to take…

Did you not see this? http://news.ycombinator.com/item?id=2600286

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#108

Post by pg »

robg wrote: post #83
pg wrote: post #44

Earlier quoted context omitted.

I have so much more data. I've been watching their trajectory for 4 months, while other investors (especially those that chose not to invest) may only have seen them for a few minutes at Demo Day.

But without something as quirky as the cereal story, you would have rejected them?

No. We liked them as people. The cereal story was just evidence of the qualities we sensed when we met them.

Re: Airbnb Has Arrived: Raising Mega-Round at a $1 Billion+ Valuation

#109

Post by derrida »

For all the talk of bubbles, I think AirBnb is actually undervalued at $1billion. I want this noted. Before AirBnb space was being wasted. Now its being used. That is something of fundamental value. The dubious valuations are things like FourSquare, LinkedIn and GroupOn.
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