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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

#71

Post by hitechsites »

thaumaturgy wrote: post #36
IsaacL wrote: post #14

Earlier quoted context omitted.

Yes, it's quite inspiring to see how much it succeeded despite the overwhelming negative feedback. Just goes to show that judging the viability of ideas is hard , no matter how many experts there always seems to be in the TechCrunch/HN peanut gallery. I've really tried to train myself to answer "do you think this is a good idea?" with "I haven't a clue."

I don't think anyone can predict what's going to be big, and what isn't, and that's why bad VC/investor/coach advice is so pernicious. Let's look at the progression: Google shows up, makes a big splash among the tech elite but attracts little attention in the popular market until their obscene IPO, and investors collectively say, "Damn, well, I don't want to miss out on the next Google!" Then there was Facebook, and…

Airbnb joins a long line of startups that became big in spite of initial rejection. In fact, it almost seems that a necessary - though not sufficient condition that your idea maybe the next big thing, is that it is initially rejected by everyone you pitch it to!

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

#72

Post by ChuckFrank »

mlinsey wrote: post #68
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…

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.

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

#73

Post by cyen »

prostoalex wrote: post #54
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…

Do you have good stats on the size of the market? I somehow thought http://www.homeaway.com was the leader here, and if you count in timeshare rentals, eBay being a close competitor, but I could be way off.

http://siteanalytics.compete.com/vrbo.com+airbnb.com+homeawa...

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

#74

Post by ChuckFrank »

mrgordon wrote: post #62
adamt wrote: post #61

Earlier quoted context omitted.

I think you miss the point if you rate the market leader by customer satisfaction rather than revenue or customer base. I just did a few searches of smaller US and UK cities, and found 5-40x as many listings on Airbnb as VRBO. For example in my nearest city (Cambridge, UK, which is both highly techie and touristy), Airbnb returns 38 results, VRBO 0. I tried various US and European cities and got a common pattern.

Thanks. Interesting data points. Surprised VRBO has nothing in Cambridge!

And to their credit. Their customer acquisition rate appears to significant indeed.

http://www.fastcodesign.com/1663349/infographic-of-the-day-a...

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

#75

Post by chrisaycock »

hvass wrote: post #69
chrisaycock wrote: post #66

Earlier quoted context omitted.

If I understand your first complaint, it's that short-term rentals increase the cost to buy real estate in a touristy location. I believe a more accurate way to phrase this is that the short-term rental market provides a more accurate valuation of the property. High prices are complaint only for the buyer; the seller will be glad that his condo is now valued correctly.

How is a one night/one week rental a 'more accurate' valuation? I don't get it.

@ChuckFrank said that buying property for the purpose of short-term rentals is responsible for "artificially increasing housing costs for residents". I was just pointing out that the cost increase wasn't artificial; the property value was intrinsically worth more than the market rate before short-term rentals were common.

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

#76

Post by dataminer »

revorad wrote: post #67
dataminer wrote: post #63

Earlier quoted context omitted.

Does Airbnb have yearly revenue of a billion dollar? According to the article 1.6 million nights have been booked through them, if they are a "billion dollar" business than average booking revenue will be $625.

Did you read the headline?

Yes it says 1 billion+ valuation not a billion dollar business.

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

#77

Post by olalonde »

hvass wrote: post #69
chrisaycock wrote: post #66

Earlier quoted context omitted.

If I understand your first complaint, it's that short-term rentals increase the cost to buy real estate in a touristy location. I believe a more accurate way to phrase this is that the short-term rental market provides a more accurate valuation of the property. High prices are complaint only for the buyer; the seller will be glad that his condo is now valued correctly.

How is a one night/one week rental a 'more accurate' valuation? I don't get it.

Regulations distort true market prices.

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

#78

Post by ChuckFrank »

cyen wrote: post #73
prostoalex wrote: post #54

Earlier quoted context omitted.

Do you have good stats on the size of the market? I somehow thought http://www.homeaway.com was the leader here, and if you count in timeshare rentals, eBay being a close competitor, but I could be way off.

http://siteanalytics.compete.com/vrbo.com+airbnb.com+homeawa...

AMAZING. A great addition to this discussion.

http://www.google.com/trends?q=airbnb%2C+vrbo&ctab=0&#38...

Google trends airbnb v. vbro.

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

#80

Post by hitechsites »

hitechsites wrote: post #60
olivercameron wrote: post #9

I think a lot of startups put too much weight on what an investor thinks of their idea. Airbnb is a prime example of carrying on in the face of rejection, even if people are saying "it's a stupid idea". I know a lot of founders who, after being told by many of the Valley's finest angels that their idea is no good, would just give up. It just goes to show that you can create a $1 billion company, even if no one really…

Totally agree. Ultimately the only test for your startup idea is market acceptance and resonance - and experience repeatedly shows that no amount of prior experience and knowledge helps in predicting correctly what the next big thing will be. After the fact, it is easy to look back and rationalize and attribute certain factors for all the big successes - but no matter how many times this happens, we always miss the n…

The success of Airbnb and many others like it raises the interesting question - How many other billion dollar ideas, never got off the ground because investors thought they were awful ideas? We may never know. But it should give every entrepreneur something to think about and not be discouraged by rejections. Your idea does not need to be accepted by investors - only by the market! So if you really believe in your idea launch it and see if the market accepts it. If not tweak the parameters till it does. Build a minimum viable product and try to fail cheaply. If it works, investors will come running to you. A good way to look at it is that your startup is like an experiment and your product/service is the hypothesis you are testing. If it fails, your hypotheis is wrong - so change it and try again.
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