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San Francisco entrepreneurs Joe Gebbia and Brian Chesky are ardent supporters of Democratic presidential candidate Barack Obama. They've attended his rallies and have an Obama '08 poster hanging in the hallway of their apartment, and Mr. Chesky has donated to the campaign.
But when running their start-up, AirBed & Breakfast Inc. -- a Web site that helps travelers find locals willing to rent them a spare bed -- they keep mum about their politics. In fact, they've approached both presidential campaigns in hopes they will promote their site to supporters trekking to the national party conventions.
We couldn't wrap our heads around air mattresses on the living room floors as the next hotel room and did not chase the deal. Others saw the amazing team that we saw, funded them, and the rest is history. Airbnb is well on its way to building the "eBay of spaces." I'm pretty sure it will be a billion dollar business in time.
We made the classic mistake that all investors make. We focused too much on what they were doing at the time and not enough on what they could do, would do, and did do. I am proud that our portfolio is full of companies where we saw the vision before other investors did and backed a great team. But we don't always get it right. We missed Airbnb even though we loved the team. Big mistake. The cereal box will remain in our conference room as a warning not to make that mistake again.
2011.03.17 - Paul Graham - Subject: Airbnb
Ideas can morph. Practically every really big startup could say, five years later, "believe it or not, we started out doing ___." It just seemed a very good sign to me that these guys were actually on the ground in NYC hunting down (and understanding) their users. On top of several previous good signs.
(...)The Airbeds just won the first poll among all the YC startups in their batch by a landslide. In the past this has not been a 100%
indicator of success (if only anything were) but much better than random.
(...)Did they explain the long-term goal of being the market in accommodation the way eBay is in stuff? That seems like it would be huge. Hotels now are like airlines in the 1970s before they figured out how to increase their load factors.
from: Fred Wilson
to: Paul Graham
date: Tue, Feb 17, 2009 at 2:05 PM
subject: Re: airbnbThey did but I am not sure I buy that
ABNB reminds me of Etsy in that it facilitates real commerce in a marketplace model directly between two people
So I think it can scale all the way to the bed and breakfast market
But I am not sure they can take on the hotel market
I could be wrong
But even so, if you include short term room rental, second home rental, bed and breakfast, and other similar classes of accommodations, you get to a pretty big opportunity
fred
from: Paul Graham
to: Fred Wilson
date: Wed, Feb 18, 2009 at 12:21 AM
subject: Re: airbnbSo invest in them! They're very capital efficient. They would make an investor's money go a long way.
It's also counter-cyclical. 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.
--pg
from: Fred Wilson
to: Paul Graham
date: Wed, Feb 18, 2009 at 2:21 AM
subject: Re: airbnbThere's a lot to like
I've done a few things, like intro it to my friends at Foundry who were investors in Service Metrics and understand this model
I am also talking to my friend Mark Pincus who had an idea like this a few years ago.
So we are working on it
Thanks for the lead
Fred
from: Paul Graham
to: Fred Wilson
date: Fri, Feb 20, 2009 at 10:00 PM
subject: airbnb already spreading to prosI know you're skeptical they'll ever get hotels, but there's a continuum between private sofas and hotel rooms, and they just moved
one step further along it.[link to an airbnb user]
This is after only a few months. I bet you they will get hotels eventually. It will start with small ones. Just wait till all the
10-room pensiones in Rome discover this site. And once it spreads to hotels, where is the point (in size of chain) at which it stops?
Once something becomes a big marketplace, you ignore it at your peril.--pg
from: Fred Wilson
to: Paul Graham
date: Sat, Feb 21, 2009 at 4:26 AM
subject: Re: airbnb already spreading to prosThat's true. It's also true that there are quite a few marketplaces out there that serve this same market
If you look at many of the people who list at ABNB, they list elsewhere too
I am not negative on this one, I am interested, but we are still in the gathering data phase.
fred
Quora - How did AirBnB, Dropbox and Stripe do at their respective YC Demo Days?
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