This also announces that Ken Chenault, former CEO of American Express, joined their board. What's really interesting is that he also joined the board of Facebook last week [1].
He must be a damn good exec who was recruited left and right during his 37 years at Amex and, now that he's retired, he's going to mentor the top execs at the top companies [2]. Exciting development for both Airbnb and Facebook.
The Costco guys were tickled by how meticulously Amex choreographed Chenault's movements.
Ken Chenault would have an advance team come to our office before he visited. They planned everything — where he would enter the building, the route to the boardroom, where he’d sit at the table.
Soon after the breakup with Costco, JetBlue ditched Amex for Barclays and MasterCard. Fidelity may also be thinking about canceling its affinity card.
One thing that AirBNB seems to get right, is knowing who its customers are. They have two major categories of customer: Hosts and Guests. (Those have subdivisions as well, which may be quite significant.) Curiously, one of those is effectively the "product" peddled to the other. This model can be generalized across many kinds of gig economy websites. How is it that AirBNB can be so much better at this than other websites with similar models? Is it because the services on offer are that much more complex?
There are a few reasons why AirBnb is succeeding and many other gig economies are struggling.
1. AirBnb is a global market place. It’s much more difficult to build a global market place and its much easier to defend your moat once you are a global marketplace. Travelers from all over the world want to visit all over the world. There is a chicken and egg problem when you start. This benefit applies to Uber to much lesser degree because they are a city level market place. Most riders ride in their home city majority of their time.
2. Repeat business between travelers and hosts are much lesser compared to other gig economies. While people might get tempted to cut a direct deal with their cleaner or dog walker after a few good experiences, it’s much less likely to happen with AirBnb. Same benefits applies to Uber.
Re: 1. Also, at least the legitimate parts of AirBnB's business (i.e. not the condo sublets that break lease agreements or homeowner's association rules), are a pretty well-established business. Low-touch B&Bs, including without the breakfasts, is a thing. So are vacation home rentals.
There wasn't a very good company to do all this through in anything like a consolidated way before. There were some vacation rental companies but none were very good. My parents rented out their vacation home in Mexico for many years and would absolutely have used AirBnB had it existed at the time.
> This means that we must have the best interest of three stakeholders in mind: Airbnb the company (employees and shareholders), Airbnb the community (guests and hosts) and the world outside of Airbnb.
There are good things in there, and then there is this:
“Where every city is a village, every block a community, and every kitchen table a conversation. ”
Didn’t he get the memo that many people explicitly want to be in cities for the very reason that they are disturbed by the social dynamics of villages (everyone knows everyone and is involved in everyone’s business)?
I love Airbnb but I would hate if every city becomes a village.
Also, this talk about building an infinite company. I’d argue that in the current public debate about tech’s power, this actually can sound a bit threatening.
At the same time, many people in cities are disillusioned with the dynamics of cities (everyone is in a rush to get somewhere and there is little close-knit community). Maybe the implication is that everyone should have the option for either if they want it.
That's why I moved to Chicago, and staying at Airbnbs while looking for an apartment was fantastic. It was hostel style so while most people were tourists, I also met friends who were in the same position as me.
The "ability to walk to a lot of things you can do" implies your agency. You have lot of options, but you're not automatically attached to anything; you can choose what to get involved in. Whereas in villages, "everyone knows everyone and is involved in everyone’s business"; you're attached to everything whether you like it or not, with all the social consequences coming from attachment.
No I get that, I'm just saying I've only heard that from 2 HN users, and not from anyone else who chose to live in NYC or SF in the years I lived there. It's not exactly an obvious memo that AirBnB didn't get.
Lots of platitudes in there, but not much substance.
How about you tell me how Airbnb is contributing to vacancies in crowded real estate markets? Or what you are doing about cities introducing regulations that will make Airbnb essentially the same as a hotel? Why are condos starting to ban Airbnb rentals?
It kind of feels like Airbnb knows they are on shaky ground and this memo is step 1 of reinventing themselves to prevent their collapse.
Why should AirBNB take on ownership of the problem of vacancies in crowded real estate markets? AirBNB is, if anything, helping this problem in many cases by allowing people to compensate for the expense of living in a crowded real estate market by renting out rooms. Also, AirBNB isn't the only game in town any more and they need to compete with the likes of Vacasa among others.
The regulation question is a real issue for AirBNB and I agree that they ought to be telling their shareholders and their hosts what their plan is.
> Why should AirBNB take on ownership of the problem of vacancies in crowded real estate markets?
Because their business actively contributes to these shortages, and the associated human suffering... While evading hospitality taxes.
> AirBNB is, if anything, helping this problem in many cases by allowing people to compensate for the expense of living in a crowded real estate market by renting out rooms
That's a minority use case. More commonly, landlords take rentals off the market, to let out on AirBnB.
>Because their business actively contributes to these shortages
NIMBY regulators are the ONLY significant contributor to long term shortages in affordable housing. In other words, the local voters are the ones responsible for their own pain.
NIMBY is only a small part of why boom cities do not have enough high-density, affordable housing exists. Not every metro area in the United States is as myopic as the Bay.
Developers providing overwhelming amounts of funding for political campaigns, razor-thin profit margins on non-luxury condos, setbacks, foreign millionaires, local millionaires, rent control, parking requirements, inadequate transit, low land taxes, airbnb, demand for school districts, the average homeowner having most of their wealth locked in a single illiquid asset, limited capital gains taxes on property appreciation... I could go on and on.
There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Blaming voters for this situation is like saying that the 2008 financial crisis happened because of voters. Technically correct (We could have - in theory - elected someone who could have appointed someone who could have appointed someone who could have stopped that particular disaster), but not in any meaningful sense.
>Developers providing overwhelming amounts of funding for political campaigns
The developers who provide overwhelming amounts of funding for political campaigns are generally the ones trying to build new housing. So they're the opposition to the NIMBYs, they're your friends in this case.
>razor-thin profit margins on non-luxury condos
If the profit margins are razor thin, then there's probably an over-supply.
>setbacks
lolwut?
>foreign millionaires, local millionaires
The best way to fight them is to allow supply to increase at a rate to meet the market demands such that buying property and leaving it empty is a bad idea. Or at least isn't harmful to others who will still be able to find supply.
>rent control
This is again, something the local voters have done to themselves.
>parking requirements
If you build a new condo or whatever that has no parking you're probably going to go broke because no one will want to purchase your condos.
>inadequate transit, low land taxes, demand for school districts
Luckily we'll be building a bunch of new expensive properties who will be paying new higher taxes. Or better yet, we'll have AirBnB places that pay the same taxes, and bring in tourists who will pay sales taxes, etc. but won't be using most of that infrastructure like public schools.
>the average homeowner having most of their wealth locked in a single illiquid asset,
This is not something that stops new development, unles those average homeowners are the NIMBYs.
>limited capital gains taxes on property appreciation.
This certainly isn't something that stops new development. In fact, it should encourage it.
>There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Sure, there's no SINGLE lever, but the biggest lever that will have the most impact is to let the market decide what kind of housing and how much to provide.
In places with limited rental properties, some people have got leases on apartments and are then renting them out via AirBnB instead of living in them. This decreases the total amount of apartments available for long-term renters.
In NYC, you can rent a room out as AirBnb if either of the following:
1. the rental is long term
2. you are present in the apartment while the guest is staying
The issue with the third case:
3. short term rental while owner is absent
is that the apartment is a secondary rental unit for the host/owner and is not a primary residence for the guest. Rich people can afford this, poorer people cannot. Hence the problem.
That is when AirBnB does not help the housing market and some cities have rightfully legislated against that case.
Not only that, but it appears AirBNB doesn't discourage this practice and there have been some articles claiming they actively encourage people who turn rentals into AirBNBs.
AirBNB doesn't seem as bad as Uber, but there have been many questionable decisions .. and cases like the London guy whose guests threw a massive party and caused like 3k GBP in damages:
No where in this letters were the words, "We've made some mistakes" or "we need to get better" ... unless I missed it? It's like they're not even addressing serious customer issues.
Uber was much more problematic in terms of culture (at least until recently, if you're inclined to be generous) and they seem to have been more directly involved in actively thwarting laws, etc. And they've created this big gig economy workforce that is barely scraping by in most cases. On the other hand, with relatively few exceptions, existing taxi companies--and especially those built around medallion monopolies--were extremely user-friendly and generally pretty awful in a lot of places.
AirBnB, on the other hand, seems at least more reasonable as a company but has still turned largely a blind eye to its hosts evading their legal requirements in a way that's arguably much more damaging to communities than Uber.
Because that decreases the supply of housing available for those that cannot afford secondary residencies. If there is not enough extra housing supply, you end up raising rent prices. If the market isn't creating enough housing for some reason or another, middle-class and lower-middle-class are left hung out to dry.
This dichotomy bleeds over into arguments about welfare state, supply-side economics vs high upper income taxes, etc. You can argue that people should be able to create value and earn however possible, but I'm going to disagree with that view. I think regulation and limits are appropriate in some cases, this being one of them.
There's a lot of ifs in your statement. I don't necessarily think that raising real-estate prices is a bad thing. It will encourage building of more real-estate. Laws that precent so artificially should be abolished. Using regulation to prevent a private owner from exploiting his property to the maximum degree ought to only be reserved for matters of commons (such as environmental polution/degredation etc).
In a libertarian world, of course it's winner takes all. Luckily we still have some governments (boo, government, right?) that actually care about their cities, and they prefer long term tax-paying community-contributing residents, not short term tourists. So, it's mostly local governments making rules that disallow AirBNB-style short-term rentals.
Maybe if the government just wants to have a Disneyland with rich apartment owners who rent everything out and zero long-term residents, they'd go along with AirBNB, but then these people wouldn't be in government, they'd work as resort managers. And they'd be voted out of office and be replaced with people from the community who actually care about said community. Also, tourists go to a city to experience its vibe, it'd be kinda interesting if they go somewhere and all they see are other tourists.
> some people have got leases on apartments and are then renting them out via AirBnB instead of living in them
You are choosing one person over the other. More people are serviced through this mechanic. A lot more. You can argue that you want more long term tenants than short term tenants in a city, but thats a preference. In absolute value, having more units available for Airbnb service more people and more value, otherwise it wouldnt be profitable to do so.
This is also a consequence of onerous legal responsibilities on long term leases. SF city government has to get their shit together for building more housing, not blaming that Airbnb is harming its constituents. (because it is, as visitors are not constituents of the city)
I am sure there are people out there renting their spare bedroom, but they aren't the problem. The problem are the "pseudo-hoteliers", who purchase multiple condos and homes and rent them exclusively on Airbnb. I want Airbnb to get away from those users, those are the vacancies that cause problems; entire condo floors empty for weeks at a time, meanwhile, there's nothing but run-down apartments and basements listed for long-term rental.
The regulation question is huge. Airbnb can't survive thousands of cities implementing different kinds of regulations.
This letter sucks. Why would any host or guest take a minute out of their day to read this corporate bullshit? Believe it or not, Brian, I don't care about your journey or your company or your management philosophy, I just want a cheap room.
I'd like a cheap room that doesn't cut into people being able to get affordable apartments. They need to address the issues around people leaving flats empty after people leave and turning them into permanent AirBNBs instead of renting out room to people who actually live there.
If you really want to build community and meet people, you should try Couch Surfers. It's part of the real sharing economy, not the bullshit sharing economy.
Didn't Airbnb just have something like 5000 units yanked off their site where the owners couldn't prove they were legit "sharing"? Seems like it's their issue now.
As of July 2016 Bloomberg estimated that AirBnB had 2.3 million listings[1]. At just 0.2% of their entire listing base, culling 5k bad ones from time to time seems pretty reasonable.
But more to the point, this was the original comment I'm responding to:
>They need to address the issues around people leaving flats empty after people leave and turning them into permanent AirBNBs instead of renting out room to people who actually live there.
If the NIMBYs weren't allowed to have a strangle-hold on supply, then it wouldn't be a problem for the wider market if some property owners turn their units into AirBnBs.
You're getting downvoted for tone but I share your sentiment. This guy is writing like he's the president of the united states. "We think that a company should survive to see the next century, not just the next quarter."
Really makes me admire guys like Buffett who manage to build long-term empires without the need to write manifestos like this.
"This means that we must have the best interest of three stakeholders in mind: Airbnb the company (employees and shareholders), Airbnb the community (guests and hosts) and the world outside of Airbnb."
> I was thinking about the next ten years of Airbnb when I received a phone call I’ll never forget. A close advisor told me that now was the time to “institutionalize your intentions so that even as you grow, you can minimize what conflicts with your vision.”
"I'll never forget that time my advisor told me to institutionalize my intentions to minimize conflicts," he said, wiping a single tear from his eye.
I feel like I'm supposed to be somewhat embarrassed to admit, as someone working in tech, that I prefer hotels to Airbnb. Unless hotels are completely booked, overly expensive, or it's a location with few hotels to begin with, I highly value the consistency and reliability of being able to check-in at anytime, knowing there's a baseline of security that a hotel offers, having access to basic amenities like a gym, having access to generally English-speaking staff if it's international, and having flexible cancellation policies depending on the rate.
With Airbnb, you really have no idea what you're going to get until you get there. The platform skews heavily in favor of hosts, and most listings I see have stricter cancellation policies than your average hotel and zero recourse if the host decides they want to cancel on you last minute.
I really don't get this kind of opinion, just because it is so binary. Hotels are great when you need to quickly check-in and check-out, although the experience vary grandly and they can get pretty bad and pretty expensive.
On the other hand if I want to feel "at home", if I want something cheaper, if I want a kitchen and if I want something well located. Airbnb is always the answer.
There's something really impersonal about staying in a hotel that you don't get with an Airbnb (although some airbnbs are pretty bad as well).
I remember almost all the airbnbs I've stayed at. I usually forget about how a hotel room looks a few days after checking out. Try to think about this, you'll be surprised ;)
And I pretty regularly stay, for roughly the same price, at "extended stay" hotels (where I am not staying for an extended stay) with a kitchen, albeit a small one.
Ditto. I don't usually use anything except the refrigerator--and even many "regular" hotels these days seem to have emptied the minibar and left the mini-fridge--but they usually also have sofas, etc. and generally room to stretch out. I often find it preferable to usual hotel amenities that I mostly don't use.
I'm the same way as the parent. Especially traveling on business, I want something straightforward and reliable even if my flight is delayed. Especially outside of cities on vacation, I may well stay in "official" B&Bs (which are increasingly listed on Airbnb although I almost always book direct) assuming it's not somewhere like a national park where I likely don't have that option.
I can't imagine a scenario in which I'd prefer an AirBnB for business travel. But here's a scenario that AirBnB was a perfect fit. My daughter is a cheerleader and we sometimes have traveling competitions. There are some families on her team which we're friends with. Rather than everyone getting a hotel room we rented an entire house on AirBnB. Each family got their own room, the kids got to enjoy being together, and we had a default location to just waste time watching TV or whatever all together between competition events. We ended up cooking out at our AirBnB location. It was really great for this more casual travel experience.
Absolutely. And, as I said in another comment, the marketplaces for renting vacation homes, houses, etc. was very fragmented and generally not very good until AirBnB came along. A lot of their business still depends on sketchy host behavior but there was clearly a legitimate need for a better service.
Also, in cities, I'm not sure I even want to spend enough time in wherever I'm staying to have a memorable experience. The city is the experience, not the place I'm staying. Not that I hang around where I'm staying most places but definitely not in cities. Or if I do, it's because I'm working :-/
With regards to non-business stays in cities, I'm more than happy to use AirBnB if I can simultaneously save money and support a small business. I've used AirBnB for beach vacations before and it worked out great for that as well, equally a scenario where hanging out at the house wasn't desired. We were at the beach all day.
It really boils down to how long you're staying, and how convenient you need your check-in/check-out experience. I did get Airbnbs when I was going to conferences for work and it was awesome (one of them was in an amazing house in the middle of Zurich with two other crypto homies).
> Really? How "at home" can you feel when you are in a total stranger's home?
Have you tried it? I've heard that argument before but I do feel "at home" when I'm travelling and airbnb'ing. When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling. As I said I still remember the Airbnbs I've been to just because I felt like I "lived" there for a while.
> This is certainly not always the case.
It is constantly the case in my experience. I've airbnb'ed in France, HongKong, Japan, the US, the UK, China, Switzerland, Spain, Portugal, ...
> Right, because all hotels are always in some completely undesirable part of town, far away from anything and everything.
Yes I've stayed at people's houses whom I didn't know very well. I don't think paying for the experience would have made me feel any more "at home."
>"When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling."
Exactly but it has the feeling of "wow someone came in and cleaned, there's fresh towels, toiletries, water and the bed is made." And I don't have worry about playing games with reviewing people or being reviewed.
Lots of people just go home when they want to feel at home.
I’ll argue that there are two ways to visit a city/country. You can be a tourist, or you can live there. The second option is always better imo (I lived in quite some places myself). Of course most of the time you’ll only be able to visit, that’s when Airbnb makes you feel like you’re “living” in the city. You’re not going back to a hotel, you’re going back to a home.
Say what you will but in my own anecdotic experience (I travel a lot) I do feel like I’ve lived in these cities for a bit when I airbnb there. And I still remember all these airbnbs even after many years.
The idea that staying in an AirBnB instead of a hotel means you are "living like a local" is patently absurd. It's also an invention of marketing folks at AirBnB. One that you have apparently bought right into.
Your credential signaling - "I travel a lot" adds no weight at all. I too travel, most of the year and have been around the world more than a few times at this point in my life. Living like a local is about many things - establishing friendships and relationships with people that live there, its about establishing a routine, its about having life experiences there. But it most certainly has nothing to do with staying in a hotel vs staying in an Airbnb.
Well I'm glad I did then, because I truly feel at home when I stay in an Airbnb, and I don't feel at home when I'm staying in a hotel.
Of course living in a city is about more than just having a home, but it gives you that feeling, for a bit.
> "I travel a lot" adds no weight at all
Of course it adds weight. I have the actual experience of living in different cities (and different continents) and I've been staying at airbnbs and hotels enough to understand the difference. Now again, these are just my personal anecdotal experiences, but saying that it is absurd is absurd. You can't objectively think that living in someone's "home" is not more homely that staying in a hotel.
I'm with you, hotels are instant to book while airbnbs you have to correspond and have this whole personal experience, no thanks. Also I can't in good conscious support them after having to buzz in a drunk airbnber at 2AM who was ringing every single apartment in my building because they lost their key.
Likewise, Cabs are much cheaper and faster to grab than Ubers in my NYC neighborhood (east village). Don't believe the hype...
That kind of behavior is not common at people's homes, unless they're being rented out like a hotel, which is Airbnb's business. It's not about airbnb directly, but the effects of its business.
No, it's effect of people acting in a way they wouldn't normally do at their homes because there are no consequences. Let's fix that and stop blaming Airbnb.
Actually it's way easier than enforcing a ban on Airbnb and similar services (don't forget that a decentralized alternative would be created, etc). If you're going to spend a night in jail for disturbing other people, you'll think twice before you do it.
I've always balanced my usage between Abnb and hotels. As hotels fulfilling the role of resort vacation or business trip overnight stay. Weekend trips or city crawling vacation I usually stay with Airbnb. I relate to your statement that you never know what expects you.
There's also something that no one talks about this short term sublets is that the hosts' neighbors are the ones who have to deal with most of the annoyance of having a new tenet every week or so.
When doing extended traveling mixing hotels and AirBNBs is great because you can get laundry done and make your own meals when you want. Also, AirBNBs are great because they usually go the extra mile for you while looking for a good rating. That can look like a bottle of family wine and a homemade pie, or the host walking you around the town to orient you.
I don't think that's an unreasonable preference (I work for Airbnb) and it's not for everyone. There is however, consequences, for hosts who do cancel on our guests last minute and we take those types of violations seriously unless it was an extenuating circumstance. Hosts can be penalized with financial penalties, they lose their Superhost status and eligibility, and this information is posted to their review section. Repeated violations also will result in suspension from the platform.
Anecdotally I've heard of many cases where hosts, especially for conferences/events when demand is extremely high, cancel on guests last minute in hopes of rebooking at a higher rate. Unless there's a preventative mechanism in place to stop that it leaves attendees in a really bad spot.
Only if they attest that they are "uncomfortable with the guest" as their reason for canceling. Abuse of any type of cancellation in general on the host side will trigger thresholds for follow up action. This type of cancellation is not the norm.
>"I feel like I'm supposed to be somewhat embarrassed to admit, as someone working in tech, that I prefer hotels to Airbnb."
I don't know why you would be embarrassed to admit that. I prefer hotels as well. I also don't think there is any connection that working in tech means you are automatically prefer Airbnb.
I agree with all of the reasons you listed. And when you add in all the fees now I think hotels are actually more compelling now. Problem with your room? You generally get a new room just by picking up the phone.
I prefer hotels too, for much the same reasons you mention. I've had a couple of bad experiences with AirBnBs, including one with no smoke detectors and the wall opposite the fuse box feeling hot to the touch.
Hotels are a more consistent experience and there is a baseline of quality and service that you can rely on. Refunds or room exchanges are easier when there are problems (the AirBnB resolution process is stressful when there is the potential for conflict with the host), plus you get charged when you checkout, not having to pay the full amount in advance when you book.
I've found the Airbnb experience in the U.S. to be much more uneven than overseas. I don't know quite what it is, but I've gotten more places in the U.S. that just weren't quite what was advertised, and most of the places outside the U.S. are at least as good as advertised...even right across the border in Canada.
I don't get it, it's far too abstract to me. A company's goal is to fulfill its vision? It really doesn't help unless they identify what that vision is. And identifying who the stakeholders are is of course an important step but it doesn't illuminate anything unless we know what they intend.
I don't think that Airbnb is really giving back to the community: they might IPO this year or the next and most of the value created will go to VCs, founders and employees, while guests and hosts still pay up to 20% fees.
That's why I've built CryptoCribs (https://www.cryptocribs.com) to enable repeat users to share their homes without paying a middleman
Why does everything crypto related feel the need to create a whitepaper following scientific conventions, even when there is nothing scientific about it...
> Why does everything crypto related feel the need to create a whitepaper following scientific conventions, even when there is nothing scientific about it...
That is how you bamboozle all the rubes into buying your worthless garbage. If it sounds all high tech and futuristic, it has to be awesome, right? See also: Ethereum and all it's weird futuristic terminology like "gas" and stuff...
I get what he's going for here, but this phrasing just sounds too TED-talk-y for me. I also don't get what they'd change as a result, but I guess that's TBD.
Being an infinite company is an idea that my friend, author Simon Sinek, has been discussing with me. Simon explained that a company’s purpose is to advance its vision, and since a vision is a mountaintop you never quite get to, you should have an infinite time horizon. But many companies are designed to be finite. Finite companies are focused on beating their competitors and appeasing short-term interests. But business is not finite.
I love AirBnb and I hate being negative about Brian's post but I stopped reading there. Perhaps this is AirBnb's reality but it certainly isn't the reality for 99.999% of other companies, who aren't dwelling in unicorn land. Companies don't think finite because it's fun, but because they have to. Because there are bills and salaries to pay and shareholders to satisfy. Because there are people who expect a return on their investment in a finite time, because their lives are finite and because their kids will grow up a finite time before they enter college.
Don't get me wrong, as a founder there's not much I despise more than short-term thinking, but if a strategy can't work within a time frame of, say, a couple years it's kinda worthless. It's hard enough to plan and predict 2 years into the future and god knows what's 5 years from today. Why be concerned with infinity?
Yeah, this sounds weird - especially from a VC-funded company! One can hardly imagine a better way of having myopic perspective, of being forced to optimize for short-term, than taking regular VC funding. Because, as you've said, "there are people who expect a return on their investment in a finite time".
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[ 4.8 ms ] story [ 127 ms ] threadHe must be a damn good exec who was recruited left and right during his 37 years at Amex and, now that he's retired, he's going to mentor the top execs at the top companies [2]. Exciting development for both Airbnb and Facebook.
[1] https://www.recode.net/2018/1/18/16905386/facebook-ken-chena...
[2] https://www.nytimes.com/2017/10/18/business/american-express...
This is the dinosaur who will transform Airbnb into an "infinite" 21st-century company??
Here's the ridiculous story of how Ken Chenault's old-school ways cost Amex their Costco relationship and chopped their customer base by 10%.
https://www.bloomberg.com/features/2015-how-amex-lost-costco...
The Costco guys were tickled by how meticulously Amex choreographed Chenault's movements.
Ken Chenault would have an advance team come to our office before he visited. They planned everything — where he would enter the building, the route to the boardroom, where he’d sit at the table.
Soon after the breakup with Costco, JetBlue ditched Amex for Barclays and MasterCard. Fidelity may also be thinking about canceling its affinity card.
1. AirBnb is a global market place. It’s much more difficult to build a global market place and its much easier to defend your moat once you are a global marketplace. Travelers from all over the world want to visit all over the world. There is a chicken and egg problem when you start. This benefit applies to Uber to much lesser degree because they are a city level market place. Most riders ride in their home city majority of their time.
2. Repeat business between travelers and hosts are much lesser compared to other gig economies. While people might get tempted to cut a direct deal with their cleaner or dog walker after a few good experiences, it’s much less likely to happen with AirBnb. Same benefits applies to Uber.
There wasn't a very good company to do all this through in anything like a consolidated way before. There were some vacation rental companies but none were very good. My parents rented out their vacation home in Mexico for many years and would absolutely have used AirBnB had it existed at the time.
“Where every city is a village, every block a community, and every kitchen table a conversation. ”
Didn’t he get the memo that many people explicitly want to be in cities for the very reason that they are disturbed by the social dynamics of villages (everyone knows everyone and is involved in everyone’s business)?
I love Airbnb but I would hate if every city becomes a village.
Also, this talk about building an infinite company. I’d argue that in the current public debate about tech’s power, this actually can sound a bit threatening.
How about you tell me how Airbnb is contributing to vacancies in crowded real estate markets? Or what you are doing about cities introducing regulations that will make Airbnb essentially the same as a hotel? Why are condos starting to ban Airbnb rentals?
It kind of feels like Airbnb knows they are on shaky ground and this memo is step 1 of reinventing themselves to prevent their collapse.
The regulation question is a real issue for AirBNB and I agree that they ought to be telling their shareholders and their hosts what their plan is.
Because their business actively contributes to these shortages, and the associated human suffering... While evading hospitality taxes.
> AirBNB is, if anything, helping this problem in many cases by allowing people to compensate for the expense of living in a crowded real estate market by renting out rooms
That's a minority use case. More commonly, landlords take rentals off the market, to let out on AirBnB.
NIMBY regulators are the ONLY significant contributor to long term shortages in affordable housing. In other words, the local voters are the ones responsible for their own pain.
There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Blaming voters for this situation is like saying that the 2008 financial crisis happened because of voters. Technically correct (We could have - in theory - elected someone who could have appointed someone who could have appointed someone who could have stopped that particular disaster), but not in any meaningful sense.
The developers who provide overwhelming amounts of funding for political campaigns are generally the ones trying to build new housing. So they're the opposition to the NIMBYs, they're your friends in this case.
>razor-thin profit margins on non-luxury condos
If the profit margins are razor thin, then there's probably an over-supply.
>setbacks
lolwut?
>foreign millionaires, local millionaires
The best way to fight them is to allow supply to increase at a rate to meet the market demands such that buying property and leaving it empty is a bad idea. Or at least isn't harmful to others who will still be able to find supply.
>rent control
This is again, something the local voters have done to themselves.
>parking requirements
If you build a new condo or whatever that has no parking you're probably going to go broke because no one will want to purchase your condos.
>inadequate transit, low land taxes, demand for school districts
Luckily we'll be building a bunch of new expensive properties who will be paying new higher taxes. Or better yet, we'll have AirBnB places that pay the same taxes, and bring in tourists who will pay sales taxes, etc. but won't be using most of that infrastructure like public schools.
>the average homeowner having most of their wealth locked in a single illiquid asset,
This is not something that stops new development, unles those average homeowners are the NIMBYs.
>limited capital gains taxes on property appreciation.
This certainly isn't something that stops new development. In fact, it should encourage it.
>There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Sure, there's no SINGLE lever, but the biggest lever that will have the most impact is to let the market decide what kind of housing and how much to provide.
In NYC, you can rent a room out as AirBnb if either of the following:
The issue with the third case: is that the apartment is a secondary rental unit for the host/owner and is not a primary residence for the guest. Rich people can afford this, poorer people cannot. Hence the problem.That is when AirBnB does not help the housing market and some cities have rightfully legislated against that case.
AirBNB doesn't seem as bad as Uber, but there have been many questionable decisions .. and cases like the London guy whose guests threw a massive party and caused like 3k GBP in damages:
http://observer.com/2017/03/airbnb-nda-damage-in-london-afte...
No where in this letters were the words, "We've made some mistakes" or "we need to get better" ... unless I missed it? It's like they're not even addressing serious customer issues.
Uber was much more problematic in terms of culture (at least until recently, if you're inclined to be generous) and they seem to have been more directly involved in actively thwarting laws, etc. And they've created this big gig economy workforce that is barely scraping by in most cases. On the other hand, with relatively few exceptions, existing taxi companies--and especially those built around medallion monopolies--were extremely user-friendly and generally pretty awful in a lot of places.
AirBnB, on the other hand, seems at least more reasonable as a company but has still turned largely a blind eye to its hosts evading their legal requirements in a way that's arguably much more damaging to communities than Uber.
I don't see why this is necessarily bad. If short-term renters provide better value to the owners, why should they be deprived of this opportunity?
This dichotomy bleeds over into arguments about welfare state, supply-side economics vs high upper income taxes, etc. You can argue that people should be able to create value and earn however possible, but I'm going to disagree with that view. I think regulation and limits are appropriate in some cases, this being one of them.
Maybe if the government just wants to have a Disneyland with rich apartment owners who rent everything out and zero long-term residents, they'd go along with AirBNB, but then these people wouldn't be in government, they'd work as resort managers. And they'd be voted out of office and be replaced with people from the community who actually care about said community. Also, tourists go to a city to experience its vibe, it'd be kinda interesting if they go somewhere and all they see are other tourists.
You are choosing one person over the other. More people are serviced through this mechanic. A lot more. You can argue that you want more long term tenants than short term tenants in a city, but thats a preference. In absolute value, having more units available for Airbnb service more people and more value, otherwise it wouldnt be profitable to do so.
This is also a consequence of onerous legal responsibilities on long term leases. SF city government has to get their shit together for building more housing, not blaming that Airbnb is harming its constituents. (because it is, as visitors are not constituents of the city)
The regulation question is huge. Airbnb can't survive thousands of cities implementing different kinds of regulations.
If you really want to build community and meet people, you should try Couch Surfers. It's part of the real sharing economy, not the bullshit sharing economy.
If by "they" you mean NIMBY regulators who won't allow more housing to be built, then we agree. This is not AirBnB's fault or responsibility.
But more to the point, this was the original comment I'm responding to:
>They need to address the issues around people leaving flats empty after people leave and turning them into permanent AirBNBs instead of renting out room to people who actually live there.
If the NIMBYs weren't allowed to have a strangle-hold on supply, then it wouldn't be a problem for the wider market if some property owners turn their units into AirBnBs.
[1]: https://www.bloomberg.com/news/articles/2016-07-11/airbnb-fa...
Really makes me admire guys like Buffett who manage to build long-term empires without the need to write manifestos like this.
Pick one.
"I'll never forget that time my advisor told me to institutionalize my intentions to minimize conflicts," he said, wiping a single tear from his eye.
As he mentions in the letter, they are friends. I’m sure he’s knee deep in most of Sineks’ philosophy on orginzations and products.
With Airbnb, you really have no idea what you're going to get until you get there. The platform skews heavily in favor of hosts, and most listings I see have stricter cancellation policies than your average hotel and zero recourse if the host decides they want to cancel on you last minute.
I really don't get this kind of opinion, just because it is so binary. Hotels are great when you need to quickly check-in and check-out, although the experience vary grandly and they can get pretty bad and pretty expensive.
On the other hand if I want to feel "at home", if I want something cheaper, if I want a kitchen and if I want something well located. Airbnb is always the answer.
There's something really impersonal about staying in a hotel that you don't get with an Airbnb (although some airbnbs are pretty bad as well).
I remember almost all the airbnbs I've stayed at. I usually forget about how a hotel room looks a few days after checking out. Try to think about this, you'll be surprised ;)
Also, in cities, I'm not sure I even want to spend enough time in wherever I'm staying to have a memorable experience. The city is the experience, not the place I'm staying. Not that I hang around where I'm staying most places but definitely not in cities. Or if I do, it's because I'm working :-/
It is almost always a worse experience than a hotel. Also hotels get screwed on taxes in a way airbnb doesn't.
Really? How "at home" can you feel when you are in a total stranger's home?
>"If I want something cheaper, ..."
This is certainly not always the case.
>"if I want something well located."
Right, because all hotels are always in some completely undesirable part of town, far away from anything and everything.
>"Airbnb is always the answer."
No, it is not.
Have you tried it? I've heard that argument before but I do feel "at home" when I'm travelling and airbnb'ing. When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling. As I said I still remember the Airbnbs I've been to just because I felt like I "lived" there for a while.
> This is certainly not always the case.
It is constantly the case in my experience. I've airbnb'ed in France, HongKong, Japan, the US, the UK, China, Switzerland, Spain, Portugal, ...
> Right, because all hotels are always in some completely undesirable part of town, far away from anything and everything.
For the same price, yes.
> No, it is not.
I'll still recommend you to give it one more try!
Yes I've stayed at people's houses whom I didn't know very well. I don't think paying for the experience would have made me feel any more "at home."
>"When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling."
Exactly but it has the feeling of "wow someone came in and cleaned, there's fresh towels, toiletries, water and the bed is made." And I don't have worry about playing games with reviewing people or being reviewed.
Lots of people just go home when they want to feel at home.
Say what you will but in my own anecdotic experience (I travel a lot) I do feel like I’ve lived in these cities for a bit when I airbnb there. And I still remember all these airbnbs even after many years.
Your credential signaling - "I travel a lot" adds no weight at all. I too travel, most of the year and have been around the world more than a few times at this point in my life. Living like a local is about many things - establishing friendships and relationships with people that live there, its about establishing a routine, its about having life experiences there. But it most certainly has nothing to do with staying in a hotel vs staying in an Airbnb.
Well I'm glad I did then, because I truly feel at home when I stay in an Airbnb, and I don't feel at home when I'm staying in a hotel.
Of course living in a city is about more than just having a home, but it gives you that feeling, for a bit.
> "I travel a lot" adds no weight at all
Of course it adds weight. I have the actual experience of living in different cities (and different continents) and I've been staying at airbnbs and hotels enough to understand the difference. Now again, these are just my personal anecdotal experiences, but saying that it is absurd is absurd. You can't objectively think that living in someone's "home" is not more homely that staying in a hotel.
Likewise, Cabs are much cheaper and faster to grab than Ubers in my NYC neighborhood (east village). Don't believe the hype...
Everything in the world could be solved by fixing how people act, but obviously the world doesn't work that way so societies resort to other means.
There's also something that no one talks about this short term sublets is that the hosts' neighbors are the ones who have to deal with most of the annoyance of having a new tenet every week or so.
I don't know why you would be embarrassed to admit that. I prefer hotels as well. I also don't think there is any connection that working in tech means you are automatically prefer Airbnb.
I agree with all of the reasons you listed. And when you add in all the fees now I think hotels are actually more compelling now. Problem with your room? You generally get a new room just by picking up the phone.
Had a really bad experience with AirBnB where PUD showed up to shut off the power to the place we were staying with no notice that left us scrambling.
https://en.wikipedia.org/wiki/Public_utility_district
Hotels are a more consistent experience and there is a baseline of quality and service that you can rely on. Refunds or room exchanges are easier when there are problems (the AirBnB resolution process is stressful when there is the potential for conflict with the host), plus you get charged when you checkout, not having to pay the full amount in advance when you book.
But I’ve found that Airbnb is great when traveling in a small group — hanging out in a home with communal rooms is awesome.
That's why I've built CryptoCribs (https://www.cryptocribs.com) to enable repeat users to share their homes without paying a middleman
That is how you bamboozle all the rubes into buying your worthless garbage. If it sounds all high tech and futuristic, it has to be awesome, right? See also: Ethereum and all it's weird futuristic terminology like "gas" and stuff...
I get what he's going for here, but this phrasing just sounds too TED-talk-y for me. I also don't get what they'd change as a result, but I guess that's TBD.
Up next, the merger of WeWork and AirBnB?
AKA, the gov't.
I love AirBnb and I hate being negative about Brian's post but I stopped reading there. Perhaps this is AirBnb's reality but it certainly isn't the reality for 99.999% of other companies, who aren't dwelling in unicorn land. Companies don't think finite because it's fun, but because they have to. Because there are bills and salaries to pay and shareholders to satisfy. Because there are people who expect a return on their investment in a finite time, because their lives are finite and because their kids will grow up a finite time before they enter college.
Don't get me wrong, as a founder there's not much I despise more than short-term thinking, but if a strategy can't work within a time frame of, say, a couple years it's kinda worthless. It's hard enough to plan and predict 2 years into the future and god knows what's 5 years from today. Why be concerned with infinity?