This week, we take a look at AirBnB, a startup that wants to be the eBay of space by being the conduit for couch or bed rentals as well as entire apartments, hotel rooms or villas in Malaysia. AirBnB facilitates the transactions and takes a 10% booking fee, which it collects once the traveler checks in.
Noah Doyle, managing partner at early-stage venture firm Javelin Venture Partners, was our guest host for this episode, joining myself and Ezra Roizen, digital media investment banker and Vator Box regular.
Here are our highlights:
- Co-founder Brian Chesky's pitch was excellent, entertaining and clear.
- AirBnB is a great alternative to staying at youth hostels. There could be a very social element to staying with people who share the same affinity. On the other hand, it could be a totally bad experience if the renter enjoys classical music and sleeping in early yet ends up in a house of where the heavy-metal band Anthrax is playing at all hours of the night. Renters should make sure to get all the details and AirBnB should have some way of ensuring users that those renting homes are credible.
- AirBnB should find a way to leverage the social graph on Facebook, much like Aardvark, the social question and answer service on top of Facebook. By layering this service on top of social networks, AirBnB solve the issue around credibility when renting from some unknown person.
- The service is similar to HomeAway and to some extent Zilok. The difference versus HomeAway is that AirBnB is going after the "floor" of the market (no pun intended). It's also far more focused than Zilok, which is a peer-to-peer lending site for everything, such as lawn mowers, electronics, etc.
- The timing may be right as it's the new barter economy. Additionally, on a typical night, a third of all U.S. hotel rooms go unused. So, there is opportunity to partner with hotels to provide more inventory to its members.
- OffBeat Guides, the personal travel guide, would be a good partner for distribution.
- Would Noah invest? Here's his thoughts: This is one idea, where clearly they’re filling a gap. It might be easy to copy. But if they can move quickly to build their community of users, and lock up partnerships and build a moat around their business, that's positive. In terms of investment, it’s better fort them to bootstrap it. If they take money too early, they will be signing up for a high-risk growth pattern. At the early stage, it’s hard to build a strong investment thesis without knowing how big this market will be and how much bigger it will get beyond a small community.
Watch the rest for more highlights.