27 ms·

Airbnb S-1

• epa 6y ago
  http://www.paulgraham.com/airbnb.html http://www.paulgraham.com/airbnb.html
  • vecter 6y ago
    pg is surprisingly prescient in his predictions about the potential size of the opportunity. This might just be survivorship bias though, but still, one takeaway I got from the email exchanges is that pg really evaluated founders on both the idea/market opportunity and the qualities of the founders themselves: I'd recommend having the debate after meeting them instead of before. We had big doubts about this idea, but they vanished on meeting the guys. To be fair, pg probably has more signal on the founders as individuals and VCs may not get as much signal based on a pitch meeting, but you could also argue that one of YC's edge was their focus on identifying stronger founders moreso than great ideas, whereas VCs, given their general strategy of investing more in large priced post-seed rounds care more about traction and market opportunity and less on the "intangible" traits of the founders. It's interesting that pg also believed in the eventuality of AirBnB competing with and taking a lot of market share away from hotels. Fred and the "older" guys at their firm didn't believe this.
    • treis 6y ago
      It's interesting that they both missed the real killer edge here. Fred said it was Etsy, Paul said it would move up into hotels. Neither are really what happened. Turns out in most places it's profitable to arbitrage long term property cost and AirBnB income. So you have a bunch of small time operators buying or leasing property and putting them on AirBnB. AFAICT that seems to be the bulk of AirBnB business. Not Etsy (person to person) nor Hotels. But a new kind of "hotel" that consists of one person running a handful to a couple dozen apartments.
      • agustif 6y ago
        Reality and organic matters are much more messy than predictive simple abstract models.
      • deleted 6y ago
        [deleted]
      • lotsofpulp 6y ago
        >But a new kind of "hotel" that consists of one person running a handful to a couple dozen apartments. The most important part of Airbnb is creating a hotel "chain" or "brand" without having to deal with things like zoning or licensing or insurance for hotels. While Hilton/Marriott/IHG/Hyatt/Accor/Choice/Wyndham/etc collect 10% to 20% in exchange for putting their brand on the line, Airbnb also was able to create a business where they can take 18% without putting their brand on the line, and keeping the ability to dump all the liability on the hosts. However, I think this is a weakness for Airbnb long term, but they may be able to take advantage in the short term. Quality control for real world products, especially volatile ones such as abodes rented night after night, are costly and I'm willing to pay a premium to make sure there are some double or triple checks going on.
        • JohnJamesRambo 6y ago
          I kind of despise Airbnbs for this reason. It's usually some clean on the surface mess that was mostly cleaned up by the previous guests. I got sick of having to wash all the dishes, take off sheets, etc when I check out (usually having to check out at 11 am or earlier, so it can be as easy as possible on the host to rent it out again!). When I vacation I want a hotel room that someone else professionally cleaned, not more chores and what feels like staying in someone's dirty house. And we stay in some of the nicest Airbnbs, my brother is a doctor.
        • treis 6y ago
          Those chains don't really deal with zoning or licenses. The actual hotels are almost all franchises. The real difference, as you allude to, is centralized reputation. If you stay at a crappy Marriott you blame Marriott. If you stay at a crappy Airbnb you blame the host. It will be interesting what happens in the long run. There's now a proven market for apartment style hotel options. I could see a reputable brand move into the space.
  • creddit 6y ago
    Wow, PG is pushy in such a way that really shows his dedication to the team. Really interesting to see.
  • 11thEarlOfMar 6y ago
    Anyone know who '[link to an airbnb user]' was? I heard the story about a celebrity using AirBnb very early, but can't recall who it was any longer...
• szemy2 6y ago
  I wonder if this is the right timing?
  • quickthrower2 6y ago
    They need the cash? If they survive through covid they are back to winner takes all.
    • mrgordon 6y ago
      They don't need the cash necessarily but the early employee options were expiring so they needed to go public
      • subsubzero 6y ago
        This. A large number of employees were granted RSU's and these have the stipulation that the company goes public at a certain time.
      • kevindeasis 6y ago
        im not familiar with this, i havent read much about early employee stock options, what does this mean?
        • mrgordon 6y ago
          The stock options were written to expire after ten years and the ten year expiration date was coming up. Airbnb wanted to IPO to ensure these early employees got properly rewarded for their huge contributions. I’m not sure exactly why they couldn’t just grant replacement options but I believe this would cause issues with the cost basis / additional tax and they probably can’t issue equivalent options to some of those people who no longer work for them due to IRS regulations
          • quickthrower2 6y ago
            Do they need an ipo to exercise them? What about private sale of shares?
• nicolashahn 6y ago
  Anyone know when the IPO listing date is?
  • raiyu 6y ago
    Usually within 4-6 weeks of the S-1 becoming public.
  • mrgordon 6y ago
    Most likely the first or second week of December
  • marc__1 6y ago
    Roadshows must start 15 days after the listing. After that the company will start with their roadshow with institutional investors to gauge interest (~20 more days). Once demand and supply of the shares is established, they can announce a public price for the share on the date before the IPO. My initial guess is that we can expect pricing of the IPO on the week of 12/14
• ShakataGaNai 6y ago
  No idea what the process for getting this information released is... but it feels unlikely to be a coincidence that on the day a 2nd extremely effective vaccine is announced to the world... Airbnb files their public S1. A lot of that document talks about COVID-19 and how it's effected their business (no surprise there) but also several mentions of vaccines. Mostly in the following phrase (repeated 3 times in the document, I think): > The extent and duration of the adverse impact of COVID-19 on the Company over the longer term remain uncertain and dependent on future developments that cannot be accurately predicted at this time, such as the severity and transmission rate of COVID-19, the extent and effectiveness of containment actions taken, including mobility restrictions, the timing, availability, and effectiveness of vaccines, and the impact of these and other factors on travel behavior in general and on the Company’s business.
  • justapassenger 6y ago
    1. It’s been well known for a long time that vaccine results will start showing up this month. 2. Every single company in the world had to list COVID as a potential source of adverse effect to their business. It turned around whole economy and further impact is still unknown. And by every I literally mean every. Even companies like Zoom, that are super hot as a result of COVID - for them getting control of COVID will mean potentially big slides down.
  • mrgordon 6y ago
    Total conjecture and even if its true, who cares?
  • eloff 6y ago
    It's not something you can just throw together on news of a vaccine. It's maybe possible they had it ready for this eventuality, but given they need to synchronize this with investment banks, the SEC, etc, I don't see them able to hold that credibly until news breaks.
• m1117 6y ago
  Great! Hotels don't like this.
• ztratar 6y ago
  Down $600m in 2019 and another $600m in 2020? With $2b in debt? Ouch. I'm reading this right, correct? I see the cash positions below are a bit different, but that's likely from... the loans? 2018 looked so hopeful. They only lose $20m total! 2019 should have been a profitable year, IMO, but they went with the aggressive strategy.
  • SilasX 6y ago
    >With $2b in debt? Don't forget, there was the announcement in April [0], they issued $1 billion of that debt at 10% interest, and it's convertible, which is equivalent to rate of about 12-13% non-convertible debt. [0] https://www.businessinsider.com/airbnb-paying-10-percent-interest-debt-valuation-cut-18-billion-2020-4 https://www.businessinsider.com/airbnb-paying-10-percent-int... What the S1 says about that loan: Interest on the First Lien Loan is payable monthly or quarterly in arrears, at our option depending on the chosen per annum interest rate equal to (i) in the case of LIBOR borrowings, 7.5% plus LIBOR, subject to a floor of 1% (the “First Lien Eurodollar Rate”), or (ii) in the case of base rate borrowings, 6.5% plus the greatest of (a) the prime rate, (b) the federal funds effective rate plus 0.5%, and (c) LIBOR for a one-month period plus 1%, subject to a floor of 2%.
  • smitty1110 6y ago
    It's more like $3 billion, there's a notice that the IRS is telling them they owe $1.3 billion in back taxes, plus interest and penalties.
    • afterwalk 6y ago
      How can an unprofitable companies rack up $1.3b in taxes?
      • hnburnsy 6y ago
        From the S1... 'While we have not yet received a Revenue Agent’s Report generally issued at the conclusion of an IRS examination, in September 2020, we received a Draft Notice of Proposed Adjustment from the IRS for the 2013 tax year relating to the valuation of our international intellectual property which was sold to a subsidiary in 2013'
• seattle_spring 6y ago
  Excited to learn more about the specifics. Really hoping people don't flood this thread with their anecdotal bad Airbnb experiences ("I paid below market rate this one time 6 years ago and got a crappy host, therefore this company is going to fail!"), which seems to happen every-time someone mentions their name.
  • iends 6y ago
    The company will do great, I'm sure. airbnb sides too much with the host in my experience. When a host left me and my family in an unsafe environment due to a gas leak, airbnb was impossible to work with. It took months of escalation with airbnb to get things fixed, despite providing all the documentation required the same day that I didn't stay at the property and had to book a last minute hotel at increased cost. :)
    • iratewizard 6y ago
      We run multiple vacation rentals through airbnb and others. AirBNB does not side with the host more often. It prefers to do nothing. We had drug dealers moving product from one. We told airbnb not to contact the guests. They contact them anyways trying to "resolve" the situation. Every time guests break rules like smoking that have clearly posted fees, airbnb says they can't help. Even when the guests admit to it. When we needed to call CPS on morons endangering their one year old, we were not able to get the guests information to give to the police. Their support will straight up lie to you to resolve cases faster.
  • johnfn 6y ago
    Got punched in the face outside of an Airbnb once and left immediately. Host charged me for damages including blood on the towel because I got punched. Airbnb sided with the host.
    • lotophage 6y ago
      Was it the host's fault that you got punched?
• wholien 6y ago
  huh > Most of our guests discover Airbnb organically, with approximately 91% of all traffic to Airbnb coming through direct or unpaid channels during the nine months ended September 30, 2020. Anyone know what % of traffic to Bookings and Expedia (and others) are paid vs unpaid? 91% unpaid seems really high, and I wonder if it's because Airbnb is so differentiated / people want to "Airbnb" a place (vs. "stay somewhere") edit: > Our hosts had 7.4 million available listings of homes and experiences as of September 30, 2020, of which 5.6 million were active listings. We consider a listing of a home or an experience to be an “active listing” if it is viewable on Airbnb and has been previously booked at least once on Airbnb IMO it's super sneaky to blend homes and experiences together
  • josephjrobison 6y ago
    AirBnb took the opposite approach of Expedia, Booking, VRBO, etc. Instead of focusing on SEO and paid search like the incumbents, AirBnb focused on brand. Great breakdown by Casey Winters on the strategies - https://news.greylock.com/four-strategies-to-win-big-with-low-frequency-marketplaces-cf046883bc5c https://news.greylock.com/four-strategies-to-win-big-with-lo... - showing that there are different strategies, and not one absolute best.
    • yowlingcat 6y ago
      Great article. But I think that saying "AirBNB focused on brand" is almost literally a misinterpretation: "Brand is an extension of the Airbnb model, not its own strategy. If the product doesn’t deliver on a differentiated experience, brand building usually does not create loyalty." This post seems to say that AirBNB didn't just focus on brand, but they innovated on /somehow/ making booking UX "10x" (let's leave the ostensible 10 aside for a moment and just say "a lot" instead) better than incumbents. But that requires a durable product advantage, one that consistently creates a differentiated experience. It's more accurate to say that brand is a downstream side effect of the core product than a sole or primary focus.
  • hn_throwaway_99 6y ago
    Bookings and Expedia are way, way, way lower than that. Expedia has been complaining a lot in recent years how Google has been taking away a lot of their search traffic with in-results-page hotel listings. At one point in the past I heard Booking was the largest spender, worldwide, on Adwords.
• nmjohn 6y ago
  Does anyone know what happened with the stock options for early airbnb employees which were expiring this month (Nov 2020)? Did they find some legal way to extend the options, or did employees end up having to find the money to exercise them or else lose out on them? For context: http://archive.is/xdv1u http://archive.is/xdv1u (NYT Article)
  • mrgordon 6y ago
    I don't think they expired quite yet but they let some very early employees sell as part of the IPO which may address those people
• nabaraz 6y ago
  I expected far-worse numbers but they seem to be doing okay considering the pandemic. Revenue: 2020* 2.5billions 2019 4.9billions 2018 3.7billions *until September.
  • colmvp 6y ago
    Airbnb in the less urban areas where I live was incredibly popular during the summer / fall. Covid-19 encouraged people in the city I live in to travel in the province instead of go to other countries.
    • tidepod12 6y ago
      Yep. COVID surprisingly ended up increasing the usage of Airbnb amongst my circles. My entire Insta/Twitter timeline is full of people who wanted to take advantage of the remote work situation and travel, but didn't want to stay in hotels due to a perceived risk of COVID, so they chose Airbnbs. And then of course they also posted a lot of pics of said Airbnb on their timelines, which basically became advertisements encouraging other people to do the same...
• hnburnsy 6y ago
  Can anyone estimate what an investors in 2009 in Air BNB will get for an ROI post- IPO? I just looked and S&P 500 returned 426.134% with dividends reinvested through September 2020.
  • draw_down 6y ago
    I'd certainly hope it's more than 4x. Otherwise what exactly are we all doing?
  • raiyu 6y ago
    3,000-10,000x return approximately. Depends on later stage dilution and what the pre-money is, but still a ridiculous markup. No comparison to S&P.
    • hnburnsy 6y ago
      Thx!
    • leptoniscool 6y ago
      wow.
  • mrgordon 6y ago
    I believe in 2011 the strike price (accounting for both stock splits) would have been around $0.75-0.80 after they raised funds around May 2011. Assuming they are worth at least $30 billion, the shares would be around $50 for around a 6150% total return assuming $0.80 initially. If someone got shares in 2009 they likely had a substantially higher return.
    • hnburnsy 6y ago
      Wow thanks, that is eye opening.
    • subsubzero 6y ago
      I think shares on the open market were selling for around $230 a share 2 years ago, I don't know valuation on that number but despite covid and the $1B loan amongst other things the people who joined earlier are making out like bandits(a few of my ex-coworkers went there and a friends wife joined there in 2011).
• x87678r 6y ago
  I wonder about their long term business model. Sure they have opened up the industry, but I'd think its quite easy to copy them. Sure there are a bunch of people that will keep AirBnB their favorite but when I'm looking at places I'll religiously check every site I can. There will be nothing unique about them.
  • maltelandwehr 6y ago
    Trust, inventory, and demand are not that easy to copy. Most people probably don’t want to check a dozen different sites (convenience) or don’t know which sites they can trust.
    • x87678r 6y ago
      > Trust, inventory, and demand are not that easy to copy. Maybe that is true right now, but in the future I doubt it. The last place I rented was on both AirBnB and VRBO, VRBO having a slightly lower price.
    • Dragonai 6y ago
      I'd also like to add that Airbnb has become a pretty widely adopted verb. Once a brand becomes a verb, overtaking and unseating that degree of brand recognition becomes a feat that I can't recall has ever been done before.
      • x87678r 6y ago
        I did a search and Xerox, YoYo, JetSki, Windsurfer, Velcro, PC seem a good start. Brands that still are used like Uber, Google are still new.
  • dkislyuk 6y ago
    I disagree strongly on this point. Building up a two-sided marketplace is incredibly difficult. On the consumer side, consider that many younger travelers have zero affinity towards hotel chains, and manage their entire accommodations arrangement through AirBnB, which feeds into an absolute requirement for hosts to list on the platform. This is not simply two markets you can copy: the feedback loops are so powerful already.
• tannhauser23 6y ago
  They lost $600 mil in _2019_? And $700 mil so far this year? Woah.
  • paxys 6y ago
    Keeping losses flat while going through the pandemic is a feat in itself tbh.
    • darkwizard42 6y ago
      To be fair they funded that by dropping a ton of spend out of the marketing (which makes sense). I know there were layoffs so I'm sure they were in full cost-cutting mode by the time the pandemic hit full swing
    • cinntaile 6y ago
      Well it's a software company after all, all they had to do was cut their ad spending. It's the hosts that are in trouble instead.
  • darkwizard42 6y ago
    To be fair the loss in 2019 is largely attributed to the drastic increase in marketing spend, but also their increase in product development cost line item. Neither of those increases led to a significant increase in revenue though. Makes me wonder what the 2020 story would have been without COVID. Personal bias makes me think Airbnb is here to stay and the marketing spend can definitely be cut back. The timeline to revenue growing back against their costs is probably 2 years with this pandemic though and that hurts anyone who is looking to invest and hold.
• callmeed 6y ago
  I heard a podcast discuss the possibility of AirBnB offering shares or options to superhosts (like me) ahead of the IPO–essentially as a "thank you" to the people who helped build the marketplace. Anyone have thoughts on if that is possible or plausible?
  • maltelandwehr 6y ago
    Not plausible. Just wishful thinking. How would that even work if superhosts are not accredited investors?
    • svbanker 6y ago
      Airbnb Host Endowment: A fund that is intended to provide support to our host community now and in the future, which we expect will be initially funded with 9.2 million shares of Airbnb stock https://www.airbnb.com/resources/hosting-homes/a/how-were-giving-hosts-a-seat-at-the-table-283 https://www.airbnb.com/resources/hosting-homes/a/how-were-gi...
    • callmeed 6y ago
      Employees that get and exercise stock options are not accredited investors either. Couldn't they take a similar route? I admit, I ask mostly selfishly (my wife and I are superhosts, we have managed a full-time AirBnB in CA for 2 years). But it's also an interesting thought experiment. It would be quite the contrast to how the rideshare and food delivery companies treat their non-employees.
      • EdJiang 6y ago
        Uber and Lyft did give long-term drivers “appreciation awards” which they could use to buy stock in the IPO. So not unprecedented. https://techcrunch.com/2019/04/11/uber-is-dishing-out-appreciation-awards-up-to-10000-to-let-prolific-drivers-buy-stock/ https://techcrunch.com/2019/04/11/uber-is-dishing-out-apprec...
        • julianozen 6y ago
• H8crilA 6y ago
  It is so frustrating with all those recent tech startups how much they're spending on sales and marketing: https://www.sec.gov/Archives/edgar/data/1559720/000119312520294801/d81668ds1.htm#fin81668_3 https://www.sec.gov/Archives/edgar/data/1559720/000119312520... How does one figure whether the business will keep growing without blasting people's faces with ads? If so much spend on ads is required to generate revenue growth then there will either never be profits or the revenue growth will stall (and thus the equity is worth rather little), if ads are not required then why are they spending so much on them, or maybe when will they stop spending. All the "heroes" of the tech boom (Facebook, Google, Apple, Microsoft) did not suffer from this problem - they were profitable before going public. It feels like this time we're in an advertising bubble. Nearly every single S-1 submitted to HN has this feature. I am genuinely puzzled by this, if someone can offer some perspective on how can you model something like this I would be grateful - what assumptions you'd be making here.
  • ToFundorNot 6y ago
    Incidentally, half of those companies you've mentioned are in the top 50 spenders for marketing [1]. I'd hazard to say that they are all in the top 100 in global spend. [1] https://howmuch.net/articles/worlds-top-50-biggest-advertising-spenders https://howmuch.net/articles/worlds-top-50-biggest-advertisi...
    • H8crilA 6y ago
      Well yeah but that's because of how massive they have become (thanks to being profitable and internal compounding). Their marketing spend in terms of % of revenue is not comparable to the late IPO up-starts, they make very very very healthy margins. I am not saying advertising is bad, or that it doesn't work, or that you shouldn't do it. Nothing of this sort. It's just unclear to me what's the plan for eventually returning anything to the shareholder. All of the eventual value depends on this.
    • yreg 6y ago
      Considering their revenues they would be in top 100 ad spend even with conservative ad budgets. However, I think H8crila meant that they did not spend that much on advertisement around the time they ipoed.
• rel2thr 6y ago
  77% of nights booked were for entire homes ( not spare rooms ). I would have guessed this to be much higher, like 95+ or something. That’s interesting and I guess the big thing that makes this different than vrbo if they can grow the spare room side much more over time
  • user5994461 6y ago
    I think the number is bullshit. They can't tell the difference between a room and a full home. At least that's my experience when I was trying to search on the site. There was little filtering available and the owners were listing their properties as anything.
    • jjj123 6y ago
      Really? I’ve never had this issue and I’ve stayed in dozens of listings. I’m sure this could vary by price/location though.
      • user5994461 6y ago
        My experience is that you have read the listing extremely carefully trying to devise what is it about. Is it a whole flat, or a room in a property with the landlord living in, or a room in a property fulled rented on airbnb (how many people?), or a bed in a bunk of beds (yes that's a thing). There's listings for everything and quite a few are misleading. It doesn't help that you have no idea what is the normal price range when traveling abroad and may not speak the language very well. If you're interested by the way. My counter experience renting a flat on airbnb over the summer, is that guests are evaluating everything they could use including beds and couches and ground space. The guest renting a one bedroom could be anything from a person or a couple to a family (maybe with extended family/cousins joining in) to a group of many friends. It's always a surprise whether there will be 1 or 6 people showing up.
  • afterburner 6y ago
    How often is it the case where a house is split into many units though? They're all for rent, but none are for the whole house. Yet the whole house is being rented in pieces.
• eigen-vector 6y ago
  Assuming COVID ends up as less of a threat towards the end of next year, this might be good timing in favor of employees. Travel (and market sentiment around travel companies) might pick up right around the time when their lock-in period expires.
• formercoder 6y ago
  2bn in debt on negative 250mm of adj. ebitda? Wow
  • newguy1234 6y ago
    Not a concern at all. For IPO type companies, the objectives is to grow as fast as possible. Losses in the short-term don't matter.
    • formercoder 6y ago
      For a normal non-tech company, this would be considered beyond over leveraged, in fact no one would have ever lended to them at all. Granted these notes have warrants attached, I’m guessing SVB was involved, but still that’s a lot of debt service for a company with no cash flow.
• Cyclone_ 6y ago
  I switched from hosting with Airbnb over to a property management company when I'm out of town. Airbnb continues to refuse to take security seriously and won't fulfill their host guarantee in the event that a guest causes thousands of dollars in damages. They should be an easy company to beat for long term rentals since they're so poorly run in many ways. I don't think they have any serious competition for very short term housing rentals ( not talking about hotels).
  • paxys 6y ago
    Are they even interested in the long term rental space?
    • Cyclone_ 6y ago
      Yes someone tried to book a long term rental with me recently and I said I wouldn't take it on Airbnb since they've screwed me over in the past. I realize people here don't like others being critical of quality of tech companies but it's just the reality many have experienced
    • Cyclone_ 6y ago
      To anyone who disagrees with above statement though...I'd love to debate you if you think it's acceptable for them to just back out of their host guarantee.
• jfoster 6y ago
  Has anyone done a comprehensive review of the Airbnb regulatory environment? I know there's a bunch of places where some of it has settled but also many where hosts might still be operating contrary to regulations. Would be interested in knowing how that breaks out around the world.
  • user5994461 6y ago
    There's a long list of cities with what they started to do. Search for "Paris" or "London" and should find them in the document. It's not really a problem from a financial perspective because law is lagging decades behind the real world and there's way too much money on the table for renters to care about the restrictions/bans (and there's almost zero enforcement of restrictions anyway).
• vvladymyrov 6y ago
  Does anybody know when liquidity event will happen for employers and ex-employers? Potentially could be a good time to buy stock shares.
• darkwizard42 6y ago
  Wow, the financials are a little bit surprising (in how bad they seem to be, but in actuality might be okay) Amazing growth and story up to 2018 (only $20M loss on $3.5B rev), clear investment in the marketing side that leads to the 2019 loss, but now curious if they can rebound when the world opens up. Investing in Airbnb is definitely a bet on their model righting itself in a reasonable time frame. I wonder if their IPO price will have to reflect current realities instead of just future potential (given it probably won't improve its profitability for 2 years now)
• godelmachine 6y ago
  >>the board of directors reduced Mr. Chesky’s base salary from $110,000 to $1, set his target bonus at $0, and granted him a long-term, multi-year equity award comprised of 12,000,000 RSUs (the “Multi-Year Award”). Its quite surprising that CEO of Airbnb should make just $110k/ annum in base salary before the company goes public. I would expect it to be around $500k.
  • tallgiraffe 6y ago
    He's got a place to live, and food to eat, and he spends 200% of his time at work. At that point money is really just a thing that idles in the bank.
    • inerte 6y ago
      That's not at all how most rich people behave. They want more money, and they wanna make sure nothing stops them from getting even more.
    • marcinzm 6y ago
      No, money is the thing you use to allow yourself to spend 200% of your time at work. Private tutors to school your kids so you don't have to. Cleaning services so you don't have to spend time cleaning. First class plane tickets so you can relax, sleep or work on the flight. Private driver or Ubers so you can work while driving places. A personal assistant to book travel, appointments and everything else mentioned so far.
      • enahs-sf 6y ago
        I'm sure he has an EA at the company's expense at this point.
      • TedShiller 6y ago
        None of the items you mentioned cost much
        • 6y ago
• kirillzubovsky 6y ago
  It is probably early to congratulate the founders and the team, but as someone who started using Airbnb before they were cool, and having watched the company grow, it is very joyful to see they are finally going public. Hopefully it's just up and to the right even more from here onwards. Good luck!
• agustif 6y ago
  wow so finally they pulled this through during covid, good timing with the vaccines just coming out. Any airbnb=er here wants to invest in a travel company? lol you never know..
• aliston 6y ago
  The seesaw in revenue over the last 3 quarters is insane: 841M, 334M, 1.3B in Q1, Q2, Q3. They even posted a profit last quarter. I've gotta say, the S1 looks appealing considering how few profitable silicon valley companies there are these days. On the other hand, I have a hard time interpreting whether this is truly a profitable company since the numbers are all over the place. It also looks like Q3 tends to be their best quarter by far. Is that because of summer vacations?
  • user5994461 6y ago
    Q2 saw all travels being cancelled due to lockdown across the world. It's surprising the activity bounced back this quick, back to normal in Q3.
    • rossdavidh 6y ago
      Widespread supposition is that AirBnB does better than hotels lately because: 1) when people do travel, they'd rather be at a single apartment or cabin than a many-person hotel (not saying that's well-founded, just that it's a widespread opinion) 2) some people who are now remote working decided that if they couldn't do anything in this city, they would live elsewhere for a little while. I have, however, no hard data to back up if these are actually the reasons.
      • henryfjordan 6y ago
        The CDC recommends AirBNB style vacation rentals over staying at a hotel or even with family while traveling: https://www.cdc.gov/coronavirus/2019-ncov/travelers/travel-risk.html https://www.cdc.gov/coronavirus/2019-ncov/travelers/travel-r...
      • ghaff 6y ago
        Yeah, it's hard to say how the numbers work out overall. But, if I were to travel at all over the next few months it would almost certainly be to a place with a kitchen (and preferably someplace separate) so I didn't need to go to restaurants for every meal or mingle generally. Certainly, couldn't find AirBnB for fall time off I was considering.
• cletus 6y ago
  I'm curious how badly the pandemic has hit and will hit AirBnB. I scanned a couple of tidbits from the S-1: - Reducing full-time employee headcount by approximately 25% (I'm curious from what/to?) - Setting expectation for the potential of no employee bonuses for 2020 and reducing executive team member salaries for six months (interesting that executive team _salary_ is getting reduced rather than bonuses, no? At this level isn't most of your compensation not direct salary?) - (to the above point) , in May 2020, we announced a reduction in our workforce of approximately 1,800 employees (So I guess they had ~9,000 employees?) - Outstanding RSU obligations are quoted as ~$2.7B It seems fair to wonder, given the timing during a pandemic, that there's a need or desire to cash out by the investors and founders. I wonder if their headcount downsizing wasn't severe enough. 9,000 employees seems like a lot for an intermediary. A lot of these companies seem to get in the habit of thinking they're the next Google long before they have the Google revenues to fund such pursuits. The risks section reads as expected. I do wonder if the tide is turning against home "sharing". Unlike ride-sharing, there are significant externalities to deal with. People don't generally don't want to live near an illegal (in many cases) hotel and it's not so easy for them to up and move. It's classic tragedy of the commons. What's more AirBnB has (IMHO) a provable negative impact on the supply of rental units in many cities. So cue the standard self-serving defense of AirBnB. I, for one, would not be sad to see it go.
  • Germanika 6y ago
    You're not far off on your numbers, they laid off around 1900 people back in May, out of ~7500 employees. I would think the IPO is happening despite the pandemic, not because of it. They had been planning to go public long before the IPO hit, so I wouldn't read into that too much. I definitely have similar reservations about the company as you do though. I get the impression the tide is generally turning against the airbnb model at least within major cities.
  • newguy1234 6y ago
    While those are certainly negatives. I could see AirBnB turning into a double-edged sword for communities. Yes, AirBnB would bring in some nuisances but it would also bring in tourists - who spend money in your community. Areas that ban AirBnB would suffer the loss of tax revenue and have to figure out how to deal with that. Also AirBnB just gets blamed for the rental shortage in many communities. The truth is poor zoning results in a shortage of rental units. Many areas with rental unit shortage have that shortage because zoning does not allow for high-density construction. The easiest solution to any shortage is to simply increase supply.
• kart23 6y ago
  I like airbnb. They need to get better at weeding out fake/scammy listings, that tend to plague many online marketplaces where things can be listed for free. Maybe some in-person verification system, or a fee that gets refunded if you have a certain number of guests. There are plenty of listings with huge/exclusive homes, yet no reviews and extremely cheap prices. I don't know what people get out of these listings, but it's really weird and makes the user doubtful about the authenticity of the marketplace.
  • newguy1234 6y ago
    Easiest solution is to force new hosts to provide a "surety bond" to basically be an honest host. Maybe make them pay 10-25k lump-sum in cash. After a certain amount of guests have visited the offering then the money can be returned. If the host is a scammer then the money can be used to reimburse the guests for their troubles. The risk vs rewards under this system would discourage bad hosts from joining the platform. For new, honest hosts, it would be a minor inconvenience at best.
    • deleted 6y ago
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    • gnopgnip 6y ago
      That would almost completely rule out people renting out a room in their home
      • SilasX 6y ago
        Considering they’re borrowing at 10%, they could pay good interest on that money and both sides would come out ahead. https://www.businessinsider.com/airbnb-paying-10-percent-interest-debt-valuation-cut-18-billion-2020-4 https://www.businessinsider.com/airbnb-paying-10-percent-int...
        • shajznnckfke 6y ago
          That story happened when both the company and financial markets in general were in the dumps. As you can see from the headline, times have changed.
• carlineng 6y ago
  A few random observations I found interesting: - Looks like they are significantly leaner now as a result of COVID. Cost of revenue is at an all-time low in Q3 (17% of revenue on p164). There's a lot of focus the drastic cuts to Sales and Marketing, but it looks like there's a fair amount of increased discipline across the board. - It's interesting that Operations and support looks to be very similar in both the first 9 months of 2019 and 2020 despite having drastically different revenue numbers. They had to spend roughly the same amount (600 million) to support 30% less revenue - Looks like China is a huge part of their future strategy, so much so that it is explicitly called out in their Executive Compensation bonus calculation (p271). I can think of exactly one other American consumer tech company that has had success in China.
  • edoceo 6y ago
    Who's the other one? Microsoft?
    • apocalypses 6y ago
      Apple
    • svbanker 6y ago
      Apple probably
    • pdxandi 6y ago
      I would guess Apple.
    • deleted 6y ago
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    • finolex1 6y ago
      Apple. Tesla too, if you're willing to stretch definitions a bit.
      • tenpies 6y ago
        Did they? Not only is national demand nowhere near enough to use up the Shanghai production, but they're having to export MIC vehicles and adding Model Y production. All of this with strong government backing of Tesla (as Musk said "the same as any Chinese company") and Chinese banks being told to accept any loan for a Tesla vehicle. Despite that they've had more price cuts than quarters and demand does not show any signs of improvement. This also on the back of the ticking time bomb that is their Shanghai contract. We should probably wait until the end of 2023 to see if Tesla "succeeds" in China.
• newguy1234 6y ago
  I look at IPOs quite differently than most. For me, I am looking at the fundamental business. For me the usual questions are: Does the company have a legitimate business advantage that can establish market dominance? How easy is it to replicate the business? Consumer trends - Who is using the product - young people vs older? Revenue: Quarter over quarter increase? or a logical explanation if the rev is not growing. *Consumer comments: Do people like the company so much that they tell their friend about it? Based on this, I think AirBnB is a winner all around. The company has developed a platform and a brand loyalty that has basically eliminated most competition in this space. In fact, their competitors are so small that most could not even name them. From a technology standpoint, it is relatively easy to replicate but the branding and loyalty to AirBnB is unrivaled so this is what creates their moat. First-mover advantage is strong is this sector and it is clear AirBnb has gained the first-mover advantage by a wide margin. Consumer trends - Young people love it. As these consumers get older, their income will increase and they will book more through AirBnB. The very young will most likely start off using AirBnB and never use hotels directly. Revenue - Showing consistent growth prior to COVID-19. With COVID-19 apparently on the way to being vaccinated away the "COVID-19 slump" is not a concern for me. I could see vacation spending soaring once COVID-19 fears subsidies with consumers. Consumer comments - People love AirBnB so much that they tell their friends about it. There are some issues with fraud but my guess is over time, AirBnB will figure out how to snuff these bad hosts out of their platform.
• Havoc 6y ago
  In the middle of a pandemic. Bold move
• TedShiller 6y ago
  I’d say Uber must be envious of Airbnb’s much better business model.
• sithlord 6y ago
  i know that a lot of it is standard, but woowee, like 74 pages of risk factors.
• nixass 6y ago
  Another middle-man company goes IPO, getting more funds to lobby/bribe local politicians to allow smooth operation at local population's quality of life expense. Hope they don't live too long. Covid might've done something good here
• bigpumpkin 6y ago
  Gotta love the accounting practice of putting coupons/discounts in the Sales and Marketing Expenses. I saw the same thing in Doordash's S-1. I wonder what their true gross margin is.
• 11thEarlOfMar 6y ago
  In my view, AirBnb made the travel pie substantially larger. More people can afford to travel when rooms in far away places can be rented for small amounts. If the choice is not traveling at all vs. putting up with the friction of finding the property and getting the key, reviewing the house rules and then stripping the bed and taking out the trash before you check out, many people will choose the convenience hit and take more trips. Such as 260 entire place stays in London for under $60/night. Put that together with some ridiculously low international air fare, like, RT SFO LHR for $700, pre-pandemic, and many more people will travel.
  • kspacewalk2 6y ago
    The other segment where Airbnb filled a huge market need is medium-to-large family travel. I went to Italy last year with 4 family members ranging in age from 3 to 70. Staying in hotels would have been prohibitively expensive and more cramped, so we probably would not have gone. They definitely made the pie larger in the category.
    • gabereiser 6y ago
      All these things. I’ve used AirBnB to snag a single bed at a hostel at $3/night to renting out a ski villa in Breckenridge for the whole clan of 14. While there are a lot of hotels pretending to be owners in high travel hotspots, most of the time it’s someone trying to offset or profit off a room/place they have and you’ll gladly take it for the different experience from the hotel room which start to all look the same.
  • deleted 6y ago
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  • jariel 6y ago
    It's mostly regulatory arbitrage, same as Uber. If cities and townships were to have looser regulations on hotels - which evidently they should, given the vast demand and 'mostly' it's not excessively problematic for communities - then AirBnB wouldn't exist because hotel prices and types would have much more variety and competitiveness, and so would listings. If anyone could just get in their car and tell the local dispatcher 'they want to drive tonight' - probably Uber would have never been able to come to fruition in the first place. I'm not saying that either company is good or bad, or that the regulations are good or bad, rather, that the underlying business models depended on a kind of civil regulatory asymmetry. Personally, I wish cities would adjust their regulations to be more appropriate, I don't think there needs to be an Uber or AirBnB.
• wombatmobile 6y ago
  I just started hosting with AirBNB and experienced a bug with the platform. It offered the wrong price ($100 instead of $278) and the guest accepted before I could intervene because the platform defaulted to AutoAccept. When I reported the problem, the support rep claimed it happened that way because I had "Smart Pricing" on. It was set ON by default. But AirBNB's own documentation says the Custom Price I set for the dates in question (Xmas week) override all other pricing. Even if "Smart Pricing" had applied, it shouldn't have offered the lowest price for the highest demand week of the year, because AirBNB's own calendar shows the demand peaking high for the week, not low. Now I've been 3 days trying to get a response from tech support. They deny responsibility, and promise to escalate it to a supervisor, then close the case without responding to my detailed evidence. What can I do? Does anyone know how to escalate to an AirBNB IT person? I would have thought AirBNB would like to know its platform has a serious bug.
  • fakedang 6y ago
    Why don't you just cancel the reservation? I've had a bunch of places cancel up on me like that.
    • wombatmobile 6y ago
      I suppose I have to do that, thanks. I was trying to actually solve the problem by identifying the bug and having it rectified. But I'm in the wrong industry for that now, aren't I? D'oh!
      • wombatmobile 6y ago
        I couldn't help myself because I'm sure it's a bug and I can't stand to let a bug go so I persisted with technical support. One guy got it and traced through what happened. He's escalated it to the subject specialist. It's an important bug. The "Smart Pricing" is broken, or at least in 3 cases of mine it was, and the documentation in the guides for Hosts is discordant. Airbnb S-1 Page 191 > Serving Our Stakeholders > Pricing. While hosts set their own prices, we provide hosts with Smart Pricing tools that suggest prices for their listings based on changes in demand for similar listings. Our Smart Pricing recommendations are based on the type and location of a listing, the season, expected demand, and other factors. In addition, we provide data insights that include how host occupancy rates compare to other listings on our platform.
• firekvz 6y ago
  Airbnb was cool when it was a place to share with hosts and rent a bed and a breakfast during my trips, allowing me to save some money and meeting some cool people. now it’s just a boring business of terrible managed apartments with really bad amenities and problems that make you lose time and totally diverges you from the whole concept of hassle-free vacation/renting. My last 5 airbnbs were apartments fully setted up to be rented in Airbnb just for the money and not for the experience and good service, every single one of them were so much problematic to check-in/check-out, I was charged insane cleaning fees even tho the places were not clean and were never cleaned, I had to deal with people putting cameras around totally disrupting your privacy, I had to deal with overcrowded apartments (some guy decided to rent every room in his place and sleep in the living room without mentioning it anywhere in the listing), I had to deal with last minute cancels that almost made me sleep in the street, etc. Worth mentioning that all of those bad experiences came from places that were marked as "superhost" and had quite a lot of reviews. Aand lastly, Airbnb decided to just void a 500$ giftcard that I got in 2018 and I tried to use early 2020 and they said it was invalid, I just lost the money. Airbnb it’s just death for me
  • chrisseaton 6y ago
    Why don't you use an hotel?
    • firekvz 6y ago
      I will the next time.
  • BMorearty 6y ago
    My experience has been really different from yours. After my first stay in an Airbnb five years ago I learned I needed to be more careful about reading the reviews and the descriptions. Since then I’ve only had positive experiences. The places I stay in are usual run by an individual, not a manager (and when it is a manager it’s clear up front). The service has been fantastic and the places have been beautiful. My last stay was amazing. With my family at a house in San Juan Bautista, with a private lake, the last week before my kids went back to school.
• imroot 6y ago
  "We have incurred net losses in each year since inception, and we may not be able to achieve profitability." At least they're honest about it!
  • MichaelApproved 6y ago
    That’s practically boilerplate for IPO filings and pointing it out is boilerplate for IPO comments.
• alexpotato 6y ago
  > Mr. Stephenson’s offer letter provides for an initial base salary of $600,000, an initial target bonus of 75% of his base salary, and a one-time hiring bonus in the aggregate amount of $2,400,000 While I've received signing bonuses in the past, I was not aware that you could get a signing bonus that was 4x of your base salary.
  • robbiemitchell 6y ago
    It could be buying out whatever package is being left behind at a previous gig.
  • rattray 6y ago
    (for others wondering, this is their CFO)
  • fastball 6y ago
    Don't forget the $4m exit package.
  • chx 6y ago
    To quote the PR from the time: > Dave joins Airbnb from a 17-year career at Amazon, where he was most recently Vice President and CFO of their Worldwide Consumer Organization, which is responsible for all of Amazon’s global website sales including Amazon Prime and subsidiaries such as Whole Foods and Zappos. For someone like that, you pay whatever you need to pay.
  • achow 6y ago
    This could easily be to compensate for unvested Amazon stock that he maybe leaving behind.
    • alexpotato 6y ago
      Wouldn't they just do a 1 for 1 trade in AirBnB stocks or at least RSUs or options? That would seem preferable from an "aligning of interests" perspective.
• deleted 6y ago
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• wdb 6y ago
  Personally, I wish AirBNB rules would be stricter in London and that it requires some special licensing from the council were neighbours can easily complain about the person's guests. I am sick of the random people being rude to me and the constant parties/noise. I can't do much about it. The bylaws of the building doesn't forbid it. I am trying to get elected to be part of the board so I can request these change to the bylaws. I prefer to know my neighbours, might not be friends, but at least have some relation to them.
• b20000 6y ago
  since the pandemic started, i've seen airbnb guests constantly showing up for a stay in our apartment building where subletting via airbnb is specifically prohibited. leasing office doesn't care and looks the other way. this has contributed to the spread of covid-19 without doubt. it's infuriating to have total strangers hang around the property while trying to concentrate on work and writing software. these people show up, refuse to wear masks and then get drunk and hang around / go to the beach nearby. airbnb doesn't contribute anything to society and how this company can be profitable at all is a total mystery to me.
• tengbretson 6y ago
  Airbnb sucks. They wouldn't let me delete my account without providing them my photo ID. Something they never asked for when I created my account. Reduce churn by being total assholes. Great.
• known 6y ago
  Isn't booking.com competitor to AirBnB
• skc 6y ago
  Because Chrome is just as aggressive with it's nag prompts, it would be a bit weird for Microsoft to just lay down and take it in this case though. I think for the average user Chrome/Edge are pretty much interchangeable now. For advanced users it's pretty annoying but it's less than a second to switch off.
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• djaque 6y ago
  Anyone else think this is a pretty bad time all things considered?
• gnrlst 6y ago
  Seems like they have an upcoming bigger than expected tax bill... > In September 2020, we received a Draft Notice of Proposed Adjustment from the IRS for the 2013 tax year proposing an increase to our U.S. taxable income that could result in additional income tax expense and cash tax liability of $1.35 billion, plus penalties and interest, which exceeds our current reserve recorded in our consolidated financial statements by more than $1.0 billion.
• macca321 6y ago
  What action am I meant to take in response to these stories? Put £5k aside to buy shares?
• dustinmoris 6y ago
  Personally I think AirBnb had its time. To me AirBnb is like a hotel, except: - No gym, sauna and other SPA facilities included - No breakfast buffet, restaurants or room service available - No room upgrades available - No early check in/late check out available - No 24/7 access available - No reception desk 24/7 available where I can ask for good recommendations, learn a bit more about the place without feeling awkward to ask or risk being sucked into a long unnecessary conversation - No easy way to voice complaints or raise concerns if something goes wrong - No extra facilities such as laundry, flower service, etc. - No other guests which I can meet in the lobby, at the bar and so on to socialise On the other hand I get this at AirBnbs: - Having difficulties to access the property because hosts want to meet somewhere in a place which suits them but not me - Sometimes waiting for the house/flat keys longer than expected - Sometimes being told on arrival how some things "recently" broke and that they won't be available during my stay - Awkward hellos and good byes - Awkward random house rules - Awkward access restrictions such as can't open this gate after X hour, and so on - A lot of fake friendliness as long as you don't raise any concerns - Difficulties to raise issues and getting refunds - A lot more which I can't think of now, but left me with a really bad aftertaste every time
  • dahfizz 6y ago
    Like most startups, I think Airbnb was mostly competing on price. But I was planning a weekend trip recently and it wasn't any more money to stay in a hotel. I don't see the apeal at all.
  • lucideer 6y ago
    To come at this from the opposite perspective: AirBnB's best-case "ideal" setup has always struck me as just "CouchSurfing[0] but monetised". While AirBnB has received a lot negative press for facilitating the letting of would-be residential property by large-scale professional landlords, the marketing from AirBnB's side has always favoured the "local guide, personal human experience" angle, an angle CouchSurfing has always tried to cover non-commercially. So in my mind it's a comprehensively bankrupt proposition from either side of the spectrum. It's worse than a hotel (no service), worse than traditional self-catering tourist apartments (more expensive), worse than a long-term let (a LOT more expensive) and infinitely worse than the social, warm-fuzzy personal experience of CouchSurfing (free). [0] https://en.wikipedia.org/wiki/CouchSurfing https://en.wikipedia.org/wiki/CouchSurfing
• davedx 6y ago
  Quite a lot of negative comments about AirBNB from Hacker News today. Definitely a buy signal
• fumblebee 6y ago
  Totally anecdotal, but in the early years of Airbnb, I was a staunch advocate of their mission and execution. Fast forward to now and several negative experiences with the firm (which have only really happened over the last couple of years) have left me wary of the company, especially having had great experiences with other services like Booking.com. That said, for the chief product that Airbnb mediates - rooms or apartments instead of hotels or hostels -, they're top dog. Alternative options in this space are mighty slim if you're looking beyond non-sketchy options, perhaps because barriers to entry, by way of building large-enough user and hosts bases, are _really_ difficult to build up.
• cody3222 6y ago
  Can we talk about how the Airbnb founders managed to hold onto 45%+ of the company after $5B+ in funding?
• adaisadais 6y ago
  I’m a millennial and I love using Airbnb. That being said I struggle to understand what the competitive advantage / moat is for Airbnb. Outside of brand / name recognition I don’t know any reasons why someone would pick Airbnb over VRBO or another service. Is there some sort of data play that they are making? Why would I invest in Airbnb when I could buy into a REIT or some other real estate asset? Would love some ellucidation.
  • pjanoman 6y ago
    I'm not extremely well-versed in this issue, but it seems like investing in Airbnb is completely different than investing in real estate itself. I feel like the comparison is similar to investing in Amazon versus investing in a company that sells its products on Amazon. Betting on real estate means betting on the value of the home/land increasing, while betting on Airbnb means betting on the company + the future of the market of renting homes. I did some initial research on Airbnb vs. VRBO, and they do seem like very similar companies. However, VRBO started in 1995, while Airbnb started in 2008. VRBO had a head start, and yet has only 2 million listings in comparison to Airbnb's 7 million[0]. The faster growth of Airbnb in comparison to VRBO might be one reason you'd want to invest in Airbnb over VRBO, especially in an America that allows monopolies to thrive under certain conditions. [0]: https://www.cnet.com/news/airbnb-vs-vrbo-which-is-the-best-vacation-rental-site/ https://www.cnet.com/news/airbnb-vs-vrbo-which-is-the-best-v...
• Tiktaalik 6y ago
  This is the big risk factor that I'd be concerned about as an investor: Laws, regulations, and rules that affect the short-term rental and home sharing business have limited and may continue to limit the ability or willingness of hosts to share their spaces over our platform and expose our hosts or us to significant penalties, which have had and could continue to have a material adverse effect on our business, results of operations, and financial condition. Most of the most big, vibrant cities that are the biggest tourism draws and should be growth areas for Airbnb also have housing pressures, and we have seen housing advocates push governments to implement Airbnb restrictions. Due to covid this has not been a big issue of late, but my expectation is that as tourism increases again, attention will once again return to Airbnb's distortionary impact on the housing market (both sale and rental). In most of the world Airbnb will not be able to buy a law like Uber/Lyft did with Prop 22 to get out of this jam.
• octabond 6y ago
  I couldn't find any shares owned by YC (pp 302). Could they be in 'Other Selling Stockholders' that represent less than 1%?