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Airbnb, My $1B Lesson

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Re: Airbnb, My $1B Lesson

#131

Post by nazka »

forgetsusername wrote: post #117
pitchups wrote: post #89

It is interesting and a bit ironic that AirBnb accepted funding from YC - who did not believe in their idea [1], and rejected the only investor that not only believed in their crazy idea, but actively sought them out and tried to woo them. Did they go with YC because of its brand, name recognition, or because it offered them better terms? Of course, it is all counterfactual, but could Airbnb have been as successful h…

> "but could Airbnb have been as successful had they not joined YC?" These guys had a good idea, some luck, and were able to execute. I doubt that the "brand" of their money or broad aphorisms from VCs had much to do with any of it. For all intents and purposes, money is money. There's an element of "tech celebrity" in the Valley, and big-name VCs are part of that. In reality, successful businesses around the country…

Yes. I don't think that the YC brand or any VCs would have helped them to attract customers. The VCs are well too far as a marketing environment compare to the kind of people who could use their platform. If it's a company like docker then yes: the VCs, tech guys, and companies using it are all connected and know each other. Their mutual respect and actions create their own brand so it works. But here people renting their apartment not so much, even more cities outside the Valley. They can be in the energy industry, banking industry, manufacturing... so with no particular interest in the tech world or VCs/startup world.

The biggest challenge for them was to find people willing to use their platform to rent their apartment to strangers.

Re: Airbnb, My $1B Lesson

#132

Post by jmtame »

I think the fundamental lesson here is speed. What took Paige 3 weeks or more to accomplish took YC 10 minutes, and then they said yes and signed the paperwork. Remember, this was unheard of before YC came along (granted, there's more money involved in Paige's side of things, but even that doesn't matter). Founders recognize this and respect it, and it's going to be what distinguishes the good future dealmakers from the bad ones.

Thanks for sharing this Paige. Excellent write up and valuable lessons learned.

Re: Airbnb, My $1B Lesson

#133

Post by infinite8s »

ashleyblackmore wrote: post #93

"Over the last seven years, I’ve discovered and invested very early in a handful of highly valuable companies (Wish, Lyft, Zenpayroll, Postmates, AngelList, Plated, Styleseat, Klout, etc.) as well as plenty of disasters." Any middle ground between "highly valuable" and "disaster"?

I think in most VCs minds, there is no middle ground (ie everything not highly valuable is effectively written off as a disaster).

Re: Airbnb, My $1B Lesson

#134

Post by damonpace »

If I remember correctly, Airbnb struggled to raise after YC as well. Sequoia came in and gave them $600k quietly after Greg McAdoo synthesized and reframed the Airbnb vision (See Nathan's Startup school speech from 2013). Why didn't Paige participate in funding after demo day?

Re: Airbnb, My $1B Lesson

#135

Post by jsprogrammer »

AnimalMuppet wrote: post #123
frogpelt wrote: post #103

Earlier quoted context omitted.

This is generally true. "Today and today only" is usually a red flag. But those who aren't willing to pull the trigger quick enough miss the great deals.

It seems to boil down to "How fast can you be mostly right?"

Pretty close to what was found here: http://arxiv.org/abs/1201.3798

It also sounds fairly intuitive when you verbalize it: the faster you can update your (presumably sound) strategy to new information, the "better" you are likely to do compared to someone who responds to changing information at a slower rate.

Re: Airbnb, My $1B Lesson

#136

Post by AnimalMuppet »

jsprogrammer wrote: post #135
AnimalMuppet wrote: post #123

Earlier quoted context omitted.

It seems to boil down to "How fast can you be mostly right?"

Pretty close to what was found here: http://arxiv.org/abs/1201.3798 It also sounds fairly intuitive when you verbalize it: the faster you can update your (presumably sound) strategy to new information, the "better" you are likely to do compared to someone who responds to changing information at a slower rate.

Even if your initial strategy is less sound, if you can (and are willing to) update it faster, you can still win (so long as your initial strategy wasn't too horrible).

Re: Airbnb, My $1B Lesson

#137

Post by dear »

eonw wrote: post #124
forgetsusername wrote: post #117

Earlier quoted context omitted.

> "but could Airbnb have been as successful had they not joined YC?" These guys had a good idea, some luck, and were able to execute. I doubt that the "brand" of their money or broad aphorisms from VCs had much to do with any of it. For all intents and purposes, money is money. There's an element of "tech celebrity" in the Valley, and big-name VCs are part of that. In reality, successful businesses around the country…

frbo.com had been up and operating for many years before airbnb came around. "good idea" in this case wasn't original, so that would leave luck or connections. maybe it wasnt the YC money that helped as much as YC's connections. in the end we will never really know, but it wasnt the "good idea" part that made them successful.

It's not the idea. It's the execution.

The world is more than just about idea, luck, and connections.

Just by looking at the websites of airbnb and frbo will tell you a ton.

Re: Airbnb, My $1B Lesson

#138

Post by gargarplex »

AnimalMuppet wrote: post #136
jsprogrammer wrote: post #135

Earlier quoted context omitted.

Pretty close to what was found here: http://arxiv.org/abs/1201.3798 It also sounds fairly intuitive when you verbalize it: the faster you can update your (presumably sound) strategy to new information, the "better" you are likely to do compared to someone who responds to changing information at a slower rate.

Even if your initial strategy is less sound, if you can (and are willing to) update it faster, you can still win (so long as your initial strategy wasn't too horrible).

Thats why comments on Hacker News are editable :)

Re: Airbnb, My $1B Lesson

#139

Post by s73v3r »

pitchups wrote: post #89

It is interesting and a bit ironic that AirBnb accepted funding from YC - who did not believe in their idea [1], and rejected the only investor that not only believed in their crazy idea, but actively sought them out and tried to woo them. Did they go with YC because of its brand, name recognition, or because it offered them better terms? Of course, it is all counterfactual, but could Airbnb have been as successful h…

I dunno, something like "Make sure you have nice pictures" for a business where visual things (where you're going to sleep) is quite important doesn't seem that groundbreaking of advice.

Re: Airbnb, My $1B Lesson

#140

Post by s73v3r »

beambot wrote: post #21

If it's bad form for a VC to break a handshake deal, it's equally-bad for a startup too... no? Doesn't that reflect poorly upon the founders? It's so important that YC went through the effort to codify the process: http://www.ycombinator.com/handshake/

Like most things, reputation is important, but is second to money.
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