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Comment by jmaha | Hacker News Reader

Lots of these marketplaces face the same major challenge of offline commerce once first contact is made. Basically, there's little to nothing to stop the seller from taking the relationship offline and make 2x the money as the relationship continues. Services try to mitigate this with value adds like scheduling services and providing more leads, but it's so difficult to police that most just try to continue to fill the funnel.

Airbnb is different because the relationship is long distance and trust, payments, insurance, etc are a much larger issue. It's also typically a one-time transaction and there's little need to take the deal offline. I'm sure they deal with this with people wanting to stay beyond their trip date or trying to book directly, but Airbnb can easily track this stuff with the scheduling feature and seeing discrepancies when users try to go offline.

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That definitely is a problem marketplaces face, but it actually wasn't the problem that we had. When customers started working with us, they stayed with us - repeatedly booking new lessons and packages.

As strange as it feels to say it, we had a business that could grow over time, and that's something we'll always treasure. What we didn't have was something that we could grow at the rate we wanted, at the economics that we thought made sense.

When you say it that way, it basically sounds like greed.

You assert to have had a good, long-term business going; but screw that when you can take another spin of the VC wheel, right?

I guess if the yard stick is always "become the AirBNB of <random industry>..."

And this basically sounds like passing judgement. Not everyone has to share the same goals. Some want to go for the billions, others are happy with a few million. It's not your place to judge someone else's goals as greed. Just like it wouldn't be Aaron's place to judge your goals as settling.

True.

I suppose I was mostly nit picking on the portrayal of "oh, hey, we had a good business, but, meh, so what."

When, for a lot of people, myself included, that sounds pretty nice. E.g. (from another reply) 2-3% monthly growth is meh? I suppose...

But, yes, as you said, different goals and circumstances (I of course know nothing about the company/VCs/etc.).

So, yeah, akharris, sorry for being an ass--shutting down a company definitely sucks, and you have to do it in front of your friends/hecklers on HN. Good luck on the next thing.

You make it sound like they had a choice. They'll never be able to say it publicly, but even if they were happy with slow growth I'd bet a lot of money their VC investors weren't.

Wait, let me understand this... You're implying that investors have more than 50% voting shares then right?

It doesn't just come to voting share. You'll be taking their advice if you want that next round of funding.

So they did have a choice...? If the business goes bust, then why do you need another round of funding?

Or maybe they have other things they want to do with their lives than grind it out at 2-3% monthly growth for 5 years.

With great power comes great responsibility.

If they can apply themselves to something that has greater economic benefit to themselves, and thus society, they are doing a disservice to society by underutilizing their abilities.

If the only person in the world who can cure cancer decides to be a janitor and nothing more, is he not greedy, or is he lazy?

You're misjudging them and treating them as if they are somehow stealing money through their startup(s). Not making enough money is just a way of saying they just feel they can contribute to society in a bigger way.

If you think the business would grow overtime, doesn't it make sense to sell it to someone rather than shut it down?

We've seen this same behavior @TutorUniverse, student-tutor pairs aren't as flaky as you would think. Since we have thousands of tutors to choose from the students sometimes switch between tutors to find a lower rate, different schedule, etc. but rarely do we see them going offline. Aaron, hats off to your team for doing a wonderful job building TutorSpree. Do you have an outplacement plan for your tutors? We're recruiting :)

You raised a very good point. The thing about tutoring is that it is a very personal service. Good tutors are hard to find, and a lot of the time it's about how well a tutor can relate/communicate with a particular student; nevertheless, once the fit is established, then the relationship is quite steady and last a while.

For the tutor as well, once they find a good client, they may get many other referrals from the same client. For example, if Jimmy's math grades all of a sudden improved, his parents may attribute it to the tutor, which gets the tutor a lot more calls for work within that community.

All of the above means that beyond a finders fee, there isn't too much of an ongoing role for Tutorspree.

Except there's so much that TutorSpree could've done in the marketplace model. They could've built a better scheduling system. They could've built a better way for tutors to offer discounts for purchasing packages. They could've built a bidding model where tutors could pay to show up higher in the rankings. They could've built a content network (e.g. various blogs about tutoring or education) and have tutors pay a fee to have their profile featured on those blogs.

You know what I hate doing? I hate printing paper that says "Tutor available" with my name and credentials on it, and those little paper tails that you rip off on the bottom with your email and phone number, and then going to the local university and posting it up everywhere. I will pay money to a service that solves that marketing problem for me.

Edit: to put it a different way - dating sites have this problem even worse than tutoring sites, because the presumably monogamous members of a couple meet each other, they don't need the dating sites anymore. Tutoring sites have a smaller problem because the tutor-tutee relationship isn't exclusive.

> I hate printing paper that says "Tutor available" with my name and credentials on it.

Are you willing to take a 40% cut in your rate for someone to do this for you?

I think this illustrates nicely why the market is a graveyard. It's competing with a super-simple task that cannot be replicated at scale.

I think the tutoring industry is a readily attackable problem. It might not be just like BnB inns, but there are plenty of varied markets that companies have cracked. Freelancing markets, used good auction sites, and all sorts of other examples abound. The fact that the tutoring industry has its own really tricky wrinkles just means that it takes a team uniquely attuned to the market to pull it off. Maybe they just didn't have the right ideas or execution. As a founder, if you're not bringing your own runway, you only get so many missteps. I'd bet on someone breaking this market open sooner or later.

"I'm sure they deal with this with people wanting to stay beyond their trip date or trying to book directly, but Airbnb can easily track this stuff with the scheduling feature and seeing discrepancies when users try to go offline."

Just curious, what recourse does Airbnb have when discovering these discrepancies?

They could disallow that host from listing their space. Small revenue loss to AirBnB. Big revenue loss to the host. Not really worth the few bucks to not be able to use airbnb.

If you bypass AirBnB, you will not benefit from their insurance coverage. I have heard of cases where recurring guests would try to arrange the next deal directly, and that factor was always the decisive reason for the host to decline.

Up until the the SF incident, I'm pretty sure AirBNB didn't even offer insurance.

I'd imagine it's hard to tell the difference between offline bookings from other sources, and repeat guests. We list our room on Airbnb and occasionally on work email lists, CL etc, for longer-term sublets. We have never taken an Airbnb guest offline, but from the surface it would look pretty similar, with the balance of insurance vs someone you have had enough contact with to trust (and the fees/tax aspect), I can certainly see why people'd do it. Especially given a recent experience with unexpected underpayment from them :/

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