Comment by chailatte | Hacker News Reader

Comment by chailatte | Hacker News Reader

At this point in time, I wonder if it's in pg's best interest to cut loss, and sever the relationship with airbnb altogether. Sell yc's stake in airbnb, and avoid talking about them ever again.

Sure, airbnb has a $1b valuation for now. But does anybody really think they're worth $1b after this, and only on an estimated $10M cumulative revenue? (not to mention the pending stock market collapse and IPO window closing, precipitated by US default next Tuesday)

They have a pretty toxic public image now amongst early adopters, and will only get worse. They have a business process which now appears to be broken, and it will cut into their already miniscule revenue to fix it. They do not have a moral/charismatic leader that can guide them thorough an important crisis like this. They are deemed illegal in many parts of US, and will likely be more so later once more mainstream media picks up on it.

On top of that, they are destroying yc's precarious image. And they're dragging this entire mess on all the other yc's startups (the other yc founders have to stand up to defend airbnb. Other applicants realizes that the best performing company in yc is one that does evil)

With the exception on the potential hit to AirBnB, I think you've overstated every single claim in your post. Of course, I have no evidence of market effects; only time will tell, but YC is not going to be judged and thrown out as unworthy because one company has a significant (perhaps deadly to the company) issue.

And why does YC have a "precarious image"? I've never heard anything of that nature. Every YC person whom I've spoken to (albeit not a huge percentage!) has loved the program.

Some aging statistical research shows that if you have a bad experience you'll share it with 26 other people; having a good experience nets only 13 people. Multiply that by the internet and predict the market effects.

As disastrous as this is to EJ and her life, I think it'll be the utter ruin of AirBnB.

I think you're overstating the case. It's just another problem to be solved.

The short-term solution is to take care of EJ, make her whole as much as possible. So far they seem to be botching that, but it's not a lost cause yet, and I doubt it's enough to destroy them in the long term.

The long-term solution is multi-part:

1. figure out a new renter's insurance they can offer as an optional product to property owners. Difficult, but I'm sure there's some intrepid banker or actuary looking to make a name for themselves. Maybe they can require all AirBnB properties pay a small fee into an insurance fund that's backed by a derivative that gets sliced and diced in some clever way and resold on the secondary market, or whatever.

2. Step up the Facebook integration. Make it more prominent. Base the site around real identity, users' social graphs, etc.

I also don't see this destroying YC's (precarious? really?) image. YC has hundreds of companies now, several large exits. This issue with AirBnB isn't going to hurt them in any way that matters. It's not like Ron Conway and Yuri Milner are going to withdraw their investements, or promising startup founders will stop applying all of a sudden.

"At this point in time, I wonder if it's in pg's best interest to cut loss, and sever the relationship with airbnb altogether. Sell yc's stake in airbnb, and avoid talking about them ever again."

Give them a chance to rectify this ONE publicized incident before throwing them under the bus.

Thankfully, I would think most level headed investors would feel the same.

Where did you see that AirBnB has only 10M cumulative revenue? That seems way too low.

Someone else did this rough math in one of the (seemingly numerous) AirBnB threads we've had recently...

2 millions nights (claimed) @ $50 per night (est.) with 10% cut (est.) = $10m revenue

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