25 ms·

How AirBnB Became a Billion Dollar Company

654 points by cabinguy 15y ago

nhangen 15y ago
If you were an investor, would you feel lied to, or is this a cause and not an effect?
- peteforde 15y ago
  There's no such thing as a generic investor. Every investor is different, with unique values and tolerances. Some investors would reward this; many would encourage it. It depends on why they are investors, right? Those looking for a significant return would take a fairly hard-lined "and the problem is?" position.
hnsmurf 15y ago
"It is a literal gold mine for black hats that learn how to exploit its millions of users and curtail its terms of service." Either he doesn't know what "literal" means or I need to get a pickaxe and head on over to Craigslist.
- dools 15y ago
  Modern English speakers really need to sort out their usage of 2 words: literally and physically. I think we need a movement against improper use of these such as "do I have to physically login and chage the details" rather than manually, and this "literal gold mine" which is clearly metaphorical. What can we call it? How can we stem the tides before the dystopian precitions of Idiocracy become a reality?!?
  - hnsmurf 15y ago
    Since I've already derailed this, also what's up with everyone saying "I could care less" when they mean "couldn't"?
- hartror 15y ago
  You missed the "obligatory" xkcd. http://xkcd.com/725/ http://xkcd.com/725/
adrianwaj 15y ago
Why doesn't and didn't craigslist check for the almost identical emails if they are going through their servers? They could likely dig them out if they keep archives by searching on airbnb, nicest, largest, page, views. Airbnb have the funds now to cough up.
- wickedchicken 15y ago
  Probably for safe-harbor laws. As soon as they start inspecting things for content instead of server abuse, they are then way more involved and become liable for a lot more shit. They already got a lot of heat from their adult services section, they don't need any more. It's the same reason banks do not want to know what is in your safe deposit box, even if it's mundane.
  - adrianwaj 15y ago
    I hear you, however this is a competitive issue. It's an offense to craigslist by airbnb on craigslist, not an offence from person A to person B via craiglist. I suppose the first issue to look at is whether harvesting and then spam is against the terms of service. The content of those emails isn't genuine, Jill and Sarah aren't real people, they cannot judge the beauty of the properties they proclaim to have seen. It wouldn't be completely Winklevossing for craiglist to be pissed off. If they turked each property one-by-one, I think that might be fair game.
wickedchicken 15y ago
Do you know what else is scummy? Writing a smear webpage about a competitor complete with intrigue involving leet "black hat software" and linking that page to your for-profit clone (mimbeo.com). For all we know this dude falsified the AirBnB e-mails himself just to make them look bad.
- thomasgerbe 15y ago
  Found via Google Search: http://www.vacationrentalscommunity.com/forums/t/2767.aspx http://www.vacationrentalscommunity.com/forums/t/2767.aspx
  - wickedchicken 15y ago
    The author already claims he has access to professional spamming tools. All he has to do is spam people on craigslist pretending to be AirBnB in a way that can't be traceable to AirBnB. Then he writes an article complaining about AirBnB and asks "why would they hide behind shady tactics?" You get maximum impact if you wait two years and post when your competitor gets really big so everything is forgotten and really untraceable.
    - baudehlo 15y ago
      Your comment is ridiculous. Can you really imagine someone making a two and a half year plan to set a competitor up like that? And in the meantime you're giving the competitor customers like crazy? Pull the other one.
      - wickedchicken 15y ago
        Sorry, I didn't mean to go all conspiracy theory here. I just felt a sleazy linkbait vibe from the article and wanted to provide my "fair and balanced" opinion.
        vacri 15y ago
        With all your suspicion, did you bother to check out any listings on mimbeo.com? I've opened about 20 from various states and they were all listed in 2009. The site is not current.
wickedchicken 15y ago
For the record, I don't think this is that bad of a thing. If all of this is actually true (I'm not 100% sure it is), then it's certainly not on the level "actual spammers" perform at. Spam is basically unwanted and harmful advertising, and nobody complains when someone gets e-mailed an actual useful relevant thing out of nowhere. If the thing you're being e-mailed is more relevant than the ads GMail is showing you then I'm not sure you have a right to complain too much. Sure it may feel slightly off, but calling them "completely unethical" is going slightly too far.
- thomasgerbe 15y ago
  When you go against the Terms of Service, the CAN-SPAM act, and the wishes of the classified ad creator, I'd say that's pretty unethical.
tomkarlo 15y ago
Everyone's focused on the ethics here, but if this is indeed what AirBnB was doing, isn't it a massive (and repeated) violation of Federal laws on unsolicited emails (for one thing, you're required to identify yourself properly) and likely other rules as well? What this article alleges isn't just questionable marketing practices, it's potentially deceptive / illegal marketing.
- baudehlo 15y ago
  Yes. It's a violation of the CAN-SPAM act.
  - throwaway61802 15y ago
    Do you drive 66 MPH in a 65 MPH zone? This is hardly breaking the law. This would have been perfectly legal in CAN-SPAM if they added three things: an unsubscribe link, a physical mailing address, and mentioned it was an ad. It probably would have been even more effective. If you want to stop spam, don't rely on bureaucratic processes to resolve it through legislation. Build a spam filter, or do some simple pattern recognition so you know that the same message sent 100 times isn't a legitimate inquiry to a posting.
    - amirmc 15y ago
      I understand your point but suggesting that it "would have been perfectly legal if..." does not make it any less of a violation.
    - vacri 15y ago
      So... they didn't do the things required to make it legal, but you claim it's legal? "Acquit my client, your honour! It wouldn't have been murder if he hadn't have killed them, so he did nothing illegal!"
    - baudehlo 15y ago
      I already wrote a spam filter. We stop about 4 billion spams a day with it. What are YOU doing to stop spam?
dreamdu5t 15y ago
AirBnB is not a "Billion Dollar Company." Investment is not revenue or profit. The revenue numbers I heard are in the 5-10 million range. When AirBnB posts a billion dollars in revenue, then it will be a "Billion Dollar Company."
- btilly 15y ago
  Sorry, you're absolutely wrong. The value of X, for any X at all, is what someone else is willing to pay for it. That is how markets work. Any kind of market. And it works for everything from pricing apples to pieces of art to companies. If people are willing to pay $1 billion for your company, it is a billion dollar company. If nobody is willing to pay you a dime for it, it is worth nothing. Your revenue is an input factor into what people are willing to pay, but doesn't determine the price. If you study financial theory, the theoretically correct price for a company is the "expected present value of future revenue". Meaning that if you look at all future revenue that it should ever make, divide that revenue by a discount factor for the fact that a dollar tomorrow is not worth a dollar today (and further discounts for risk), that number should be the present value of the company. So a company with little revenue and good growth prospects may be worth much more than a company with great revenue which is going off of a cliff. It is worth this both in practice and in theory. And anyone who says otherwise simply doesn't understand how to value companies. Note that in practice, in illiquid markets (which stock in privately held companies always is) the variance of market value from the theoretical relationship becomes wider. We still price companies based on what someone, somewhere, was willing to invest in it. We do that because someone educated people, who is paid to get this right, with possession of more facts than we probably are, decided that this was a reasonable price after doing research. They may be wrong, but the last price paid is the best market indicator of the value of the company.
  - dfranke 15y ago
    All this is true, but has no bearing on the common use of language. When a trader refers to Acme corporation as an $N company, he is indicating that $N is its annual revenue, not its market capitalization.
tlrobinson 15y ago
It's interesting that a lot of the recent billion dollar internet companies have some sort of gray/black hat streak. Off the top of my head: Groupon: "we've already seen businesses complaining that the Groupons didn't make them money, or that Groupon sales people suggested they raise their prices substantially just before the Groupon 'discount'." http://www.theatlantic.com/business/archive/2011/05/why-does-groupon-work/238706/ http://www.theatlantic.com/business/archive/2011/05/why-does... Zynga: "I Did Every Horrible Thing In The Book Just To Get Revenues" http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus-faceboo/ http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus...
- deleted 15y ago
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deleted 15y ago
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andrewhillman 15y ago
Sounds like a lot of people on here are jealous. Obviously they weren't being ethical, but I think just about every popular web startup does what they need to do to solve the chicken and the egg problem. I think every single dating site puts up fake profiles, sends fake msgs, winks and flirts to get started.
tzm 15y ago
Unethical? possibly. Does it piss me off? Sometimes. Do I care? No. I generally expect to receive spam from CL when posting or responding to ads.
- vacri 15y ago
  If you don't care, why would it ever piss you off?
  - tzm 15y ago
    Do I ultimately care? No. Lots of other things to focus on.
Joakal 15y ago
Seems to be happening for over a year so far. > It never fails that I get at least 20 marketing emails a day from airbnb when I post a property on craigslist. I hope they do more of these PR stunts than filling up my inbox with unsolicited messages. http://techcrunch.com/2010/06/21/airbnb-brian-chesky/ http://techcrunch.com/2010/06/21/airbnb-brian-chesky/
ivankirigin 15y ago
I hadnt heard about anything like this from the airbnb folks, but I do know they have had successful advertising campaigns since over a year ago. So the basic premise of this article, that their growth source is a big mystery, is false.
djloche 15y ago
Supposing Dave Gooden is correct... The method seems risky at first, but when you think about the risk and how they solved the problem, it is perfectly acceptable. To catch danger from unsolicited email (from the end recipient), the mail must first be reported. A complaint must be made. If the recipient doesn't report it, there is no action taken. Most of the time, it doesn't take but a few reports and then there are people digging into the scheme trying to figure out who is abusing the end users. This is because most people sending unsolicited email are not able to directly target their market. Viagra spammers have to send out boat loads of messages just to hit their market of old men with erectile disfunction who are too embarrassed to get the pills through traditional means AND not web savvy enough to realize that giving out their credit card information to a fly by night company selling drugs isn't the smartest idea. Simply put - if you can directly target your market AND you have something that is game changing to those people - eg a superior product / experience / service compared to their current business efforts, you won't get flagged for spam. They'll check out your site, think it's the greatest, and become your customer because you make them money. The problem for AirBnB was that Craigslist has evolved to try and prevent unsolicited mail of all kind - because most people or companies are NOT able to hit the sweet spot where they are sure that what they have to offer is exactly what the recipient wants, but doesn't know it until the email is received. Having interns, family, friends, or other people who are genuinely excited about your business send email recommending it to exactly who will want it, without revealing their relationship to the business, is an acceptable, if temporary solution. But you only need to build momentum, because if your product is amazing, the recipients of the previously unsolicited email will do all the word of mouth marketing for you. So before you go and try and repeat this alleged successful route, make sure you have all the pieces to the puzzle before giving the mission a green light. [cite: personal past experience at an ESP watching and doing the digging in resolving spam/fraud complaints]
Zakuzaa 15y ago
Curious to know PG's opinion on this.
dhbanes 15y ago
I wonder what nickb thinks of this.
rkon 15y ago
These types of messages definitely appear to fit the CAN-SPAM Act, which covers "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service". Airbnb may be spending that $100M sooner than they thought: "Each separate email in violation of the law is subject to penalties of up to $16,000, and more than one person may be held responsible for violations. For example, both the company whose product is promoted in the message and the company that originated the message may be legally responsible." http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business http://business.ftc.gov/documents/bus61-can-spam-act-complia...
- UtestMe 15y ago
  Nobody will ever be able to legally prove the gmail accounts were created for and by AirBnB. Actually, I don't think those accounts were created by AirBnB guys, but by a third party, for AirBnB use. Ad extremis, the AirBnB founders might as well plead they never knew what was the exact method this third party will use to generate traffic and users.
  - mattmanser 15y ago
    Nobody? Get the IP addresses that access those accounts from GMail. You're going to find them all coming from one IP or a small number of American IP addresses. Ask the ISPs who they are. Job done, culprit found. You think they'll be using anonymous proxies or something? I doubt it.
    - UtestMe 15y ago
      I think google won't let you bind an email to an ip
juniortp 15y ago
Did they actually do it?
throwaway61802 15y ago
Nobody here knows how much of Airbnb's growth is driven by Craigslist, it's purely speculative. Until Airbnb confirms, you'll never know but you'd have to be naive to believe that you can build a company up to $1 billion by firing off a bunch of emails. Nobody here has even suggested the possibility that "Airbnb became a billion dollar company" by suggesting how many Craigslist rentals are posted each day, along with a standardized conversion rate. I'm surprised to see how negative the comments are on this. This is like Yelp paying people to write reviews. Shady? Sure. Illegal? The only part of the CAN-SPAM Act Airbnb broke was (1) not including a physical mailing address, (2) not mentioning it was an ad, and (3) not including an unsubscrive link. Otherwise, CAN-SPAM is laughable at best. It's hardly enforced. Don't expect Craigslist to come at Airbnb with a lawsuit, it'd probably not hold up in court. I see this instead as one of Airbnb's many tactics to try and reach out to users. If you look at this logically, they've been covered by the press a lot. The amount of growth they might (or might not) have reached doing this would hail in comparison to how much they obtained by press and simple product and customer development.
- yardie 15y ago
  I see the astroturfers are coming out in their defense.
- jhermsmeyer 15y ago
  Saying "the only part" of the law airbnb broke and then listing 1,2,3 violations is laughable. Also I quite enjoy the irony that an account name of throwaway is defending the practice of using throwaway gmail accounts to spam people. Warms the cockles.
BYurgi 15y ago
> After harvesting email addresses (I only grabbed real email addresses, not anonymous craigslist addresses) I did one email blast to people that were advertising vacation rentals on craigslist...My results: 1,000+ vacation rental owners signed up and listed their properties on my test site. He's missing a few steps... How many email addresses did this dude harvest and blast to get 1,000+ people to sign up for his special vacation rental site? What did the email say that he sent out? Was he also sending them from throwaway gmail accounts? What were his tactics? This guy needs to follow up with more details. All he's shown is that at some point he posted 4 vacation rentals to Craigslist and he got 5 emails linking to AirBNB. His findings rely on the fact that he got 1,000+ people to sign up their vacation rentals on his site after spamming some number of emails he admits to harvesting. The "test" site he made (he's since edited it out), but google cached it http://bit.ly/iOPWi5 http://bit.ly/iOPWi5 is www.mimbeo.com. A quick look at the press page (http://mimbeo.com/vacation-rentals/press http://mimbeo.com/vacation-rentals/press) and they have press releases announcing they got 1,000+ properties in one month: http://www.prlog.org/10408565-mimbeocom-reaches-1000-vacation-rental-listings-in-its-first-month.html http://www.prlog.org/10408565-mimbeocom-reaches-1000-vacatio... Here's a quote: > "It's a no-brainer" said one of the founders. "We are offering owners and managers the same great service they receive from the pay-for-placement sites like VRBO & Homeaway. Not only that, but we broadcast our members listings to Facebook, Twitter, Myspace and more - and we do it all at no cost. We like to think of ourselves as the 'craigslist' of vacation rentals - with the added bonus that the listings do not expire - which is the main complaint we have heard from craigslist users." Seems odd to go through all that for a weekend project "test" website. What's this guy's deal? This seems weird...
- Eternal 15y ago
  True this guys methods are questionable, as well as his objective. But if his claims are true than both and AriBnB was faking user recommendations to gain users than they should get criticized for it. Even more so if they systematically violate Craiglist ToS.
Lucadg 15y ago
I lead a group of guys trying make money online with the rental business, so they can travel. Each one is responsible for an area and it's hard to get new owners and apartments, believe me, but we never resorted to spamming. Instead we contact the Owners directly and openly, then we go to meet them personally and see the apartments, when possible. This way is much slower, but at the end we have much better listings for our customers. We'll never be a billion dollars company of course.
johnx123 15y ago
I believe, PG spammed more than what the two ladies did in CL.
mbertrand 15y ago
Interesting amount of negative feelings towards AirBnB, and as a disclaimer I am a big proponent of "Do, and ask for forgiveness". This is what startups are all about, using available resources to their advantage and getting out their and hustling (even if it involves bending the rules a bit). Obviously rental owners (their target) were not to upset about being told of another resource to list their site on otherwise they would not have continued this approach. I can see where some of you are coming from in feeling violated/disturbed by this but given that a.) it appears to have worked b.) they informed users of something they wanted c.) no one complained (until now). I this that it was a very effective/creative way to solve their supply problem and it obviously worked.
theklub 15y ago
It really shouldn't shock anyone that very few people follow the rules.
tuckbuck 15y ago
great writeup. AirBnB may not be wrong, but what this means, it that anyone else can do the same thing . this definitely reduces their valuation.
deleted 15y ago
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andrewcross 15y ago
While this is clearly not the most ethical behavior, how many of us wouldn't do the exact same? You gotta do what you gotta do.
Hisoka 15y ago
Whether or not it's wrong or right doesn't matter.. what matters is are there consequences? If not, then the guys at AirBnB probably could care less, and are laughing and enjoying cocktails in rooftop bars while the rest of us are toiling away at jobs... Remember, we only got 1 life to live.. think about it. Arguing right or wrong makes little sense
allanscu 15y ago
Good research. I don't think this is anything new. I'm familiar with a few YC companies that use CL as a method to get their supply (in this case vacation rentals).
- Caligula 15y ago
  Curious which ones and how? I wonder if this is the tenacity of founders that pg speaks of.
- windsurfer 15y ago
  This is unethical.
  - baudehlo 15y ago
    And illegal. It is email advertising in violation of the CAN-SPAM act.
  - orenmazor 15y ago
    though successful.
    - palish 15y ago
      Though unethical. If growing a billion dollar company means setting aside what makes me a good person, then I wouldn't want a billion dollar company. Nor would I want to work there.
rvanniekerk 15y ago
Good read, although, I wouldn't necessarily consider advertising your services to people already listing vacation rentals as "blackhat". Blackhat insinuates that someone is being gamed, in this case, both the home owners and AirBnB are benefiting (maybe craigslist is losing out?).
- smackfu 15y ago
  "Advertising your services" via faked emails is pretty black hat.
- qeorge 15y ago
  I think it counts as "blackhat", but I'm not really outraged. To me, its equivalent to cruising the singles section of Craigslist and responding as a sock puppet recommending a particular dating site. Not a huge deal, but its not 100% above board either.
- helium 15y ago
  Of course it's blackhat. They're sending unsolicited, automated spam to people who explicitly stated that they didn't want emails regarding commercial interests. There is a big difference between advertising and spam.
  - pbreit 15y ago
    "explicitly stated" = "did not change the default"
    - jasonwatkinspdx 15y ago
      You still have to respect opt out, even if it's the default.
bproper 15y ago
Does the new "illegal hotels" law have any effect on AirBnB? http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-with-2k-bookings-a-night-but-many-listings-may-be-illegal/ http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-wi...
aresant 15y ago
"It is a story of pure unadulterated hustle. And I love it." - Fred Wilson talking about the AirBNB team's Obama cereal hustle. I'd like to borrow his words in regard to this post. Fred's original post - http://www.avc.com/a_vc/2011/03/airbnb.html http://www.avc.com/a_vc/2011/03/airbnb.html
- kwis 15y ago
  The cereal was great, scrappy, creative hustle. The spam is the opposite of all that. The spam destroyed a wonderful founding story. The spam destroyed their professional and ethical credibility.
- suking 15y ago
  Not that I'm against what they're doing and if I was a VC I probably wouldn't care too much - but it's somewhat illegal in this case... Certainly against CL ToS as well.
  - callmeed 15y ago
    Illegal how? I get the ToS violation, but not sure about legality ... Are you saying it's a violation of the CAN-SPAM act? Or something else?
    - suking 15y ago
      CAN-SPAM, sending from a fake address (illegal headers). CA has a specific law that pre-empts CAN-SPAM that definitely makes this illegal if sent from CA (don't ask how I know).
      - stickfigure 15y ago
        Man oh man, there are a lot of (very bad) armchair lawyers on HN. You might consider AirBnB's actions unethical, but they certainly aren't illegal - which would be obvious to anyone who bothered reading the CAN-SPAM wikipedia page. It's not illegal to violate Craigslist's TOS, and AFAICT the "spam" messages were sent from a legitimate Gmail account. For those of you claiming "I'd rather be poor than violate craigslist's terms of service": Bullshit.
MatthewB 15y ago
I love this. Being scrappy is one of the best qualities among entrepreneurs. The attitude of "do anything" to succeed usually results in success not to mention it is one of the characteristics that PG looks for in founders.
- run4yourlives 15y ago
  Well, I'll be sure to include you along with AirBnb on my list of "People you cannot trust to be ethical".
- dcosson 15y ago
  I agree - maybe I'm just drinking the YC gatorade here, but to me it shows scrappiness and dedication and does not seem especially immoral. Who did it hurt? For the people who were annoyed by the spam, it took 30 seconds out of their life to read and delete the email. For the ones who went ahead and posted their rental on airbnb, it probably led to more business plus the added benefit of getting to use airbnb's elegant interface instead of trying to keep track of dozens of craigslist emails. The only money that airbnb made from this lie was by finding people additional renters for their homes, which seems like an everybody wins scenario. If it was outright illegal then they'll have to face the repercussions of that, but I doubt they'll lose much sleep feeling bad about what they've done.
- deleted 15y ago
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- llimllib 15y ago
  Even when it's illegal? Is this an action that you consider moral but illegal (re: CAN-SPAM and various state laws)? Should AirBnB's investors be worried about the potential liability of lawsuits? > Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $16,000 - http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business http://business.ftc.gov/documents/bus61-can-spam-act-complia...
  - kwis 15y ago
    I'm very curious if they misrepresented the nature of their growth to their investors. If they did, they could be in violation of securities laws, in addition to CAN-SPAM.
brown9-2 15y ago
When someone says "Craigslist spam!", is the first you think of a) spam posted to craigslist as listings, or b) emails advertising something (surreptitiously) to people that have listed their property on craigslist? Not that the latter isn't "spam" of a sort, but it doesn't feel quite like "craigslist spam".
- hollerith 15y ago
  Although it is spam of some sort, a better description would probably be "using sock puppets".
gigantor 15y ago
Blackhat or not, this is a great example of how there are very viable alternatives to SEO in terms of internet marketing. The ever changing rules and laws of search engines unfortunately make or break a vast majority of online businesses.
- Hisoka 15y ago
  I agree. What AirBnB did is the modern version of creating thin content farms to spam Google search results.
bakbak 15y ago
just wondering what s/w do you use for mass mailing and craiglist email harvesting? without getting sandboxed / blacklisted ...
- omarchowdhury 15y ago
  You don't.
euroclydon 15y ago
One day someone will come along and scrape the data from that "clunky and expensive AirBnB" to start an XX million dollar startup.
jmtame 15y ago
In Startups Open Sourced, he says Airbnb "tried everything" but he says that press is the single best source of their growth. Having the happy customers came in second, but would be interested to hear if this helped them much. It's hard to believe that Craigslist is the reason why they'd be so successful when the product is so easy to spread by word of mouth and press.
gorm 15y ago
Welcome to The Mesh!
- ChuckFrank 15y ago
  I assume that you are talking about this? http://meshing.it/ http://meshing.it/ the new sharing society?
nahlyee 15y ago
If CL spam is responsible their phenomenal growth, then more power to them. It wouldn't work if they didn't have a better solution to a huge market need.
kcurtin 15y ago
i think people would have a much different view if this wasn't airbnb and was a less reputable company. The things described in the post definitely constitute as spam and violate CAN-SPAM...but these types of tactics do work (if they didn't we wouldn't have spammers) and there wasn't anything malicious about it.
- palish 15y ago
  If there were nothing malicious about what they did, then why didn't they advertise as fake men, instead of as fake women?
- lurker19 15y ago
  AirBnB is less reputable, and this incident is why.
orenmazor 15y ago
The author uses the term "black hat" way too much and very loosely.
- rorrr 15y ago
  Spam is black hat.
savrajsingh 15y ago
alluded, not eluded
Mizza 15y ago
Is anybody else slightly disturbed by all of the 'attaboy!' comments here on a post exposing unscrupulous and probably illegal business tactics? Think the response here would be the same if it was MicroSoft or the RIAA caught in something like this and not a YC alum? Anyway, great investigation and great analysis here, I think.
- chipsy 15y ago
  It's hard to say. Microsoft can push out new products with splashy announcements, TV ads, etc. Similarly, they can afford to do "proper engineering" these days. But Microsoft as a startup, and as a growing company, was extremely unscrupulous. Likewise, the majority of the "scrappy" web startups cheat on their tech and cheat on their marketing, in the hope that they can find traction before they lose goodwill, and get profitable so that they can go back and fix the system before it blows up. On a personal level this is very frustrating, because we like everyone we know to behave in a honest and straightforward fashion. But from a business standpoint there is a huge tradition of using some amount of misdirection to push new products to people. Parallels can be made with the animal kingdom and the use of camouflage, bright colors, and social interactions. Sometimes your business is in a position to strut your stuff, because you're the lion in the room. Other times you have to sneak around or be deceptive. Sometimes, fragile, trust-breaking tactics work - at least for a time. In the end, the real condemnation for this behavior has to come from yourself, not from others. The market sees what is in front of it at the moment; it rarely knows the truth.
- prodigal_erik 15y ago
  This. I used to think they were clever, but now we know they're such repellent scumbags willing to abuse public resources for private gain that it's actually a black mark against Y Combinator to have been partly responsible and holding dirty money.
  - colinplamondon 15y ago
    Seriously?
ChuckFrank 15y ago
Clearly the unethical part of this discovery is that Airbnb used 'shell' gmail accounts to do their work. Instead they should have found a way to present themselves with honesty and integrity to future members. What are the good reasons for Airbnb's success and valuation? Are there any stories about their actions that inspire both confidence and congratulations. (aside from their Obama O's and Capt'n McCain flash success).
- psawaya 15y ago
  I agree. As if they're fooling anyone pretending to be an anonymous stranger from gmail who just happens to love promoting airbnb.
  - pdenya 15y ago
    Didn't they fool pretty much everyone? Even the author only had a suspicion and resorted to some (impressive) tests to verify.
    - psawaya 15y ago
      Do real humans send out advertisements to strangers on behalf of websites? Making sure to cite pageviews? Don't get me wrong, I'm glad he confirmed his suspicion before blogging about this. But even one e-mail like that is suspicious.
pgroves 15y ago
I started my own company to get away from the do-anything-for-a-sale attitude of corporate america. I do not admire or respect AirBnb for this behavior. I don't care that it worked. I don't care if it was legal or not, it was dishonest. I know it's common, but it takes a fundamental lack of respect to lie directly to another human being. I'll just continue to toil in obscurity; self-respect intact.
- marcamillion 15y ago
  I am not being facetious by this question, but did you make a product that you are selling ? If so, how did you get your first set of customers ? Please share. If you have not made a product that you need to sell yet, I think you will find when you do it, it's MUCH, MUCH more difficult than you ever thought it would be. Also, selling a service - i.e. web development/design is very different than selling a product.
  - alain94040 15y ago
    This is a FAQ: for your first sale, you sacrifice the price (all the way down to free if you have to). For the next sales, you show your reference customer.
    - skmurphy 15y ago
      Free is not a sale. You have to charge something to claim them as a customer.
      - alain94040 15y ago
        You know what I mean. Even in EDA, having a reference "user", as long as they are using the product, is a major achievement that will be leveraged [to death] with future [paying] customers.
        skmurphy 15y ago
        I am not trying to be pedantic. In my experience there is an enormous difference between having a user and having a paying customer. They may be a user before they are a paying customer, but there is a very significant difference.
buildorfail 15y ago
I do not want to argue if this type of stuff is good or bad. But I do want to point out to you all that list of tech gods is full of similar stories. Off the top of my head: MySpace started out purely through spam...Tim Ferris started out in online supplement sales...People complained about Plaxo doing black hat stuff... they sold ok. People complained about Zynga ripping off other games and about breaking every Facebook platform rule there was... look at Mark Pincus now. People complained about Facebook's Mark Zuckerberg stealing their idea... he does not care.
- fs111 15y ago
  So and your point is now, that it's okay to be unethical like the people you mentioned, just to get rich?
  - buildorfail 15y ago
    not here to discuss ethics. Just making the point that this is extremely typical and far more common than you may think.
- keiferski 15y ago
  "Everyone's doing it" isn't a valid excuse.
  - buildorfail 15y ago
    you did not read the first line of my post. My point is just that this is nothing new...
- deleted 15y ago
  [deleted]
marcamillion 15y ago
Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell yes. But is it "wrong" ? I don't think so. I always thought that getting that first set of customers that will take you to product/market fit was going to be easy. What with the Twitterverse, Facebook and all and sundry. But let me tell you, from experience, it is DAMN HARD! I guess the true test of whether or not this is 'unethical' is whether those people that signed up felt scammed after using the service. If I were one of those people that got that email, sure I might feel a bit 'weird' that they presented themselves as 'Jill D' and not AirBnB, but after going through what I have been doing the last few weeks - trying to get customers - I can't say I would be upset.
- klbarry 15y ago
  Perfectly in line with what I was thinking, thanks!
- thomasgerbe 15y ago
  "Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell yes. But is it "wrong" ? I don't think so." I post a listing on Craigslist specifically saying it's not "ok for others to contact me about other services, products or commercial interests" (an option in Craigslist) and then a business tries to convince me to use their site using a disguise DESPITE clearly stating that I don't want to be contacted? No, I'd say the true test of whether something is ethical or not is whether it violates rules and/or the choices of a user. Then again, I'm the type that actually wants businesses to respect my decision.
  - marcamillion 15y ago
    But wouldn't you say that's a bit unreasonable given that if you listed your apartment/house for rental on Craigslist - it can be safe to assume that you are interested in renting your house/apartment, no ? I think every 'savvy' user always checks those boxes, but if there is an option that allows you to actually fulfill your original intent - i.e. you got no hits on Craigslist, but with AirBnB you have tons of requests and make a ton of money, wasn't that a win/win - even though they used a 'grey' tactic to reach you. You say you don't want to be contacted, but that's to protect you from emails from the Nigerian prince and the blatantly obvious annoying spam. But things that are targeted at you, and can add value - I think it would be safe to say it makes sense in those cases.
temphn 15y ago
AirBnB raided Craigslist for users. Those users made more money and had a far better user experience on AirBnB to boot. Not exactly your traditional Viagra/Nigeria type spam. When the end doesn't justify the means, sure, complain about the means. But this is not such a case.
- jacoblyles 15y ago
  We shouldn't forget that Craigslist is an evil monopoly
  - peteforde 15y ago
    Bullshit. Citations please!
techcofounder 15y ago
can we please get a response from one of the AirBnB founders?
- alain94040 15y ago
  I second that. What scares me the most is that no one from AirBnB came on that thread to strongly deny this article. And you know they read HN a lot and post often. So I'm sad.
  - kanamekun 15y ago
    I'm sure that their attorneys have let them know that acknowledging that they sent out spam would expose them to massive damages under the CAN-SPAM laws. So AirBnB can't really acknowledge what they did and try and move on... financially, it would be ruinous for them. They are probably hoping that the controversy will blow over, until the statute of limitations expires at which point they can apologize and blame the previous regime.
    - deleted 15y ago
      [deleted]
    - alain94040 15y ago
      Since this has been on the front page of HN long enough, I expect more in-depth coverage from TechCrunh really soon. That's usually how it works. That could get the ball rolling. (I know TC has its critics, but they are exactly what's needed for this kind of story)
nhangen 15y ago
This is the same thing spammers do to steal money from people, and it's the same thing that dating sites do to pretend to have women interested in meeting dudes. Either way, it's fraudulent. I don't hate that they did this, but I hate that they tried to pretend they were anonymous women that happened to really like AirBnB. Why be so shady about it and instead why not just be honest? "Hey, we noticed your rental and thought you might like something we built. It's helped a lot of people fill vacancies and make money; check it out - url"
- thomasgerbe 15y ago
  I assume they couldn't be honest because it would've violated Craiglist's Terms of Use, namely: You agree not to post, email, or otherwise make available Content: k) that constitutes or contains "affiliate marketing," "link referral code," "junk mail," "spam," "chain letters," "pyramid schemes," or unsolicited commercial advertisement; l) that constitutes or contains any form of advertising or solicitation if: posted in areas of the craigslist sites which are not designated for such purposes; or emailed to craigslist users who have not indicated in writing that it is ok to contact them about other services, products or commercial interests. m) that includes links to commercial services or web sites, except as allowed in "services"; I wonder if Craigslist could legitimately sue Airbnb.
  - run4yourlives 15y ago
    Sue them for what, exactly? Coincidence? While it doesn't take a rocket scientist to figure out what's happening here, it takes a bit more than connecting the dots to make a legal case stick. [EDIT] Just to be clear I'm certainly not a fan of this. It strikes me as unethical and a little low on the "sleazy marketer" scale. I don't however beleive that this is illegal unless you can somehow prove that JillSmith03@gmail.com is professionally connected to AirBnB, and that this was done under corporate directive.
    - alain94040 15y ago
      It's actually very easy to prove, because the same email was sent from several different accounts: you go after AirBnB directly and shoot for discovery, get them under oath to answer whether they did this or not. If you have ever been questioned under oath, you know how tough it is to lie (ping me offline for details). No point in chasing the gmail accounts themselves, that would be a dead-end.
forgotmyuser 15y ago
Glad you did all that testing to find something so damn obvious. Look at how they rank on google - they don't. It was really obvious they were spamming craigslist.
- kongqiu 15y ago
  If it is/was that obvious, care to share any other 'obvious' practices that may not be common knowledge?
  - forgotmyuser 15y ago
    blackhatworld.com > everything you need to know.
amirhhz 15y ago
Is this something the the AirBnB guys would put on their YC app form if they were applying again? And then what would PG & co make of it? In fact, did pg know about this or encourage it in the first place? Answers to these questions might be a good test of whether they should have done it or not.
SkyMarshal 15y ago
"Some very famous investors have alluded to the fact that they look for a dangerous streak in the entrepreneurs they invest in…and while those investors will never come out and tell you what they mean, this kind of thing is probably what they mean." Eg, be naughty, not evil. Whether they crossed the line or not, dunno. It's a far cry from Microsoft intentionally leveraging their OS monopoly to destroy companies and corner industries back in the day.

654 points by cabinguy 15y ago

nhangen 15y ago

If you were an investor, would you feel lied to, or is this a cause and not an effect?

peteforde 15y ago
There's no such thing as a generic investor. Every investor is different, with unique values and tolerances. Some investors would reward this; many would encourage it. It depends on why they are investors, right? Those looking for a significant return would take a fairly hard-lined "and the problem is?" position.

hnsmurf 15y ago

"It is a literal gold mine for black hats that learn how to exploit its millions of users and curtail its terms of service." Either he doesn't know what "literal" means or I need to get a pickaxe and head on over to Craigslist.

dools 15y ago
Modern English speakers really need to sort out their usage of 2 words: literally and physically. I think we need a movement against improper use of these such as "do I have to physically login and chage the details" rather than manually, and this "literal gold mine" which is clearly metaphorical. What can we call it? How can we stem the tides before the dystopian precitions of Idiocracy become a reality?!?
- hnsmurf 15y ago
  Since I've already derailed this, also what's up with everyone saying "I could care less" when they mean "couldn't"?
hartror 15y ago
You missed the "obligatory" xkcd. http://xkcd.com/725/ http://xkcd.com/725/

adrianwaj 15y ago

Why doesn't and didn't craigslist check for the almost identical emails if they are going through their servers? They could likely dig them out if they keep archives by searching on airbnb, nicest, largest, page, views. Airbnb have the funds now to cough up.

wickedchicken 15y ago
Probably for safe-harbor laws. As soon as they start inspecting things for content instead of server abuse, they are then way more involved and become liable for a lot more shit. They already got a lot of heat from their adult services section, they don't need any more. It's the same reason banks do not want to know what is in your safe deposit box, even if it's mundane.
- adrianwaj 15y ago
  I hear you, however this is a competitive issue. It's an offense to craigslist by airbnb on craigslist, not an offence from person A to person B via craiglist. I suppose the first issue to look at is whether harvesting and then spam is against the terms of service. The content of those emails isn't genuine, Jill and Sarah aren't real people, they cannot judge the beauty of the properties they proclaim to have seen. It wouldn't be completely Winklevossing for craiglist to be pissed off. If they turked each property one-by-one, I think that might be fair game.

wickedchicken 15y ago

Do you know what else is scummy? Writing a smear webpage about a competitor complete with intrigue involving leet "black hat software" and linking that page to your for-profit clone (mimbeo.com). For all we know this dude falsified the AirBnB e-mails himself just to make them look bad.

thomasgerbe 15y ago
Found via Google Search: http://www.vacationrentalscommunity.com/forums/t/2767.aspx http://www.vacationrentalscommunity.com/forums/t/2767.aspx
- wickedchicken 15y ago
  The author already claims he has access to professional spamming tools. All he has to do is spam people on craigslist pretending to be AirBnB in a way that can't be traceable to AirBnB. Then he writes an article complaining about AirBnB and asks "why would they hide behind shady tactics?" You get maximum impact if you wait two years and post when your competitor gets really big so everything is forgotten and really untraceable.
  - baudehlo 15y ago
    Your comment is ridiculous. Can you really imagine someone making a two and a half year plan to set a competitor up like that? And in the meantime you're giving the competitor customers like crazy? Pull the other one.
    - wickedchicken 15y ago
      Sorry, I didn't mean to go all conspiracy theory here. I just felt a sleazy linkbait vibe from the article and wanted to provide my "fair and balanced" opinion.
      - vacri 15y ago
        With all your suspicion, did you bother to check out any listings on mimbeo.com? I've opened about 20 from various states and they were all listed in 2009. The site is not current.

wickedchicken 15y ago

For the record, I don't think this is that bad of a thing. If all of this is actually true (I'm not 100% sure it is), then it's certainly not on the level "actual spammers" perform at. Spam is basically unwanted and harmful advertising, and nobody complains when someone gets e-mailed an actual useful relevant thing out of nowhere. If the thing you're being e-mailed is more relevant than the ads GMail is showing you then I'm not sure you have a right to complain too much. Sure it may feel slightly off, but calling them "completely unethical" is going slightly too far.

thomasgerbe 15y ago
When you go against the Terms of Service, the CAN-SPAM act, and the wishes of the classified ad creator, I'd say that's pretty unethical.

tomkarlo 15y ago

Everyone's focused on the ethics here, but if this is indeed what AirBnB was doing, isn't it a massive (and repeated) violation of Federal laws on unsolicited emails (for one thing, you're required to identify yourself properly) and likely other rules as well? What this article alleges isn't just questionable marketing practices, it's potentially deceptive / illegal marketing.

baudehlo 15y ago
Yes. It's a violation of the CAN-SPAM act.
- throwaway61802 15y ago
  Do you drive 66 MPH in a 65 MPH zone? This is hardly breaking the law. This would have been perfectly legal in CAN-SPAM if they added three things: an unsubscribe link, a physical mailing address, and mentioned it was an ad. It probably would have been even more effective. If you want to stop spam, don't rely on bureaucratic processes to resolve it through legislation. Build a spam filter, or do some simple pattern recognition so you know that the same message sent 100 times isn't a legitimate inquiry to a posting.
  - amirmc 15y ago
    I understand your point but suggesting that it "would have been perfectly legal if..." does not make it any less of a violation.
  - vacri 15y ago
    So... they didn't do the things required to make it legal, but you claim it's legal? "Acquit my client, your honour! It wouldn't have been murder if he hadn't have killed them, so he did nothing illegal!"
  - baudehlo 15y ago
    I already wrote a spam filter. We stop about 4 billion spams a day with it. What are YOU doing to stop spam?

dreamdu5t 15y ago

AirBnB is not a "Billion Dollar Company." Investment is not revenue or profit. The revenue numbers I heard are in the 5-10 million range. When AirBnB posts a billion dollars in revenue, then it will be a "Billion Dollar Company."

btilly 15y ago
Sorry, you're absolutely wrong. The value of X, for any X at all, is what someone else is willing to pay for it. That is how markets work. Any kind of market. And it works for everything from pricing apples to pieces of art to companies. If people are willing to pay $1 billion for your company, it is a billion dollar company. If nobody is willing to pay you a dime for it, it is worth nothing. Your revenue is an input factor into what people are willing to pay, but doesn't determine the price. If you study financial theory, the theoretically correct price for a company is the "expected present value of future revenue". Meaning that if you look at all future revenue that it should ever make, divide that revenue by a discount factor for the fact that a dollar tomorrow is not worth a dollar today (and further discounts for risk), that number should be the present value of the company. So a company with little revenue and good growth prospects may be worth much more than a company with great revenue which is going off of a cliff. It is worth this both in practice and in theory. And anyone who says otherwise simply doesn't understand how to value companies. Note that in practice, in illiquid markets (which stock in privately held companies always is) the variance of market value from the theoretical relationship becomes wider. We still price companies based on what someone, somewhere, was willing to invest in it. We do that because someone educated people, who is paid to get this right, with possession of more facts than we probably are, decided that this was a reasonable price after doing research. They may be wrong, but the last price paid is the best market indicator of the value of the company.
- dfranke 15y ago
  All this is true, but has no bearing on the common use of language. When a trader refers to Acme corporation as an $N company, he is indicating that $N is its annual revenue, not its market capitalization.

tlrobinson 15y ago

It's interesting that a lot of the recent billion dollar internet companies have some sort of gray/black hat streak. Off the top of my head: Groupon: "we've already seen businesses complaining that the Groupons didn't make them money, or that Groupon sales people suggested they raise their prices substantially just before the Groupon 'discount'." http://www.theatlantic.com/business/archive/2011/05/why-does-groupon-work/238706/ http://www.theatlantic.com/business/archive/2011/05/why-does... Zynga: "I Did Every Horrible Thing In The Book Just To Get Revenues" http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus-faceboo/ http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus...

deleted 15y ago
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andrewhillman 15y ago

Sounds like a lot of people on here are jealous. Obviously they weren't being ethical, but I think just about every popular web startup does what they need to do to solve the chicken and the egg problem. I think every single dating site puts up fake profiles, sends fake msgs, winks and flirts to get started.

tzm 15y ago

Unethical? possibly. Does it piss me off? Sometimes. Do I care? No. I generally expect to receive spam from CL when posting or responding to ads.

vacri 15y ago
If you don't care, why would it ever piss you off?
- tzm 15y ago
  Do I ultimately care? No. Lots of other things to focus on.

Joakal 15y ago

Seems to be happening for over a year so far. > It never fails that I get at least 20 marketing emails a day from airbnb when I post a property on craigslist. I hope they do more of these PR stunts than filling up my inbox with unsolicited messages. http://techcrunch.com/2010/06/21/airbnb-brian-chesky/ http://techcrunch.com/2010/06/21/airbnb-brian-chesky/

ivankirigin 15y ago

I hadnt heard about anything like this from the airbnb folks, but I do know they have had successful advertising campaigns since over a year ago. So the basic premise of this article, that their growth source is a big mystery, is false.

djloche 15y ago

Supposing Dave Gooden is correct... The method seems risky at first, but when you think about the risk and how they solved the problem, it is perfectly acceptable. To catch danger from unsolicited email (from the end recipient), the mail must first be reported. A complaint must be made. If the recipient doesn't report it, there is no action taken. Most of the time, it doesn't take but a few reports and then there are people digging into the scheme trying to figure out who is abusing the end users. This is because most people sending unsolicited email are not able to directly target their market. Viagra spammers have to send out boat loads of messages just to hit their market of old men with erectile disfunction who are too embarrassed to get the pills through traditional means AND not web savvy enough to realize that giving out their credit card information to a fly by night company selling drugs isn't the smartest idea. Simply put - if you can directly target your market AND you have something that is game changing to those people - eg a superior product / experience / service compared to their current business efforts, you won't get flagged for spam. They'll check out your site, think it's the greatest, and become your customer because you make them money. The problem for AirBnB was that Craigslist has evolved to try and prevent unsolicited mail of all kind - because most people or companies are NOT able to hit the sweet spot where they are sure that what they have to offer is exactly what the recipient wants, but doesn't know it until the email is received. Having interns, family, friends, or other people who are genuinely excited about your business send email recommending it to exactly who will want it, without revealing their relationship to the business, is an acceptable, if temporary solution. But you only need to build momentum, because if your product is amazing, the recipients of the previously unsolicited email will do all the word of mouth marketing for you. So before you go and try and repeat this alleged successful route, make sure you have all the pieces to the puzzle before giving the mission a green light. [cite: personal past experience at an ESP watching and doing the digging in resolving spam/fraud complaints]

Zakuzaa 15y ago

Curious to know PG's opinion on this.

dhbanes 15y ago

I wonder what nickb thinks of this.

rkon 15y ago

These types of messages definitely appear to fit the CAN-SPAM Act, which covers "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service". Airbnb may be spending that $100M sooner than they thought: "Each separate email in violation of the law is subject to penalties of up to $16,000, and more than one person may be held responsible for violations. For example, both the company whose product is promoted in the message and the company that originated the message may be legally responsible." http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business http://business.ftc.gov/documents/bus61-can-spam-act-complia...

UtestMe 15y ago
Nobody will ever be able to legally prove the gmail accounts were created for and by AirBnB. Actually, I don't think those accounts were created by AirBnB guys, but by a third party, for AirBnB use. Ad extremis, the AirBnB founders might as well plead they never knew what was the exact method this third party will use to generate traffic and users.
- mattmanser 15y ago
  Nobody? Get the IP addresses that access those accounts from GMail. You're going to find them all coming from one IP or a small number of American IP addresses. Ask the ISPs who they are. Job done, culprit found. You think they'll be using anonymous proxies or something? I doubt it.
  - UtestMe 15y ago
    I think google won't let you bind an email to an ip

juniortp 15y ago

Did they actually do it?

throwaway61802 15y ago

Nobody here knows how much of Airbnb's growth is driven by Craigslist, it's purely speculative. Until Airbnb confirms, you'll never know but you'd have to be naive to believe that you can build a company up to $1 billion by firing off a bunch of emails. Nobody here has even suggested the possibility that "Airbnb became a billion dollar company" by suggesting how many Craigslist rentals are posted each day, along with a standardized conversion rate. I'm surprised to see how negative the comments are on this. This is like Yelp paying people to write reviews. Shady? Sure. Illegal? The only part of the CAN-SPAM Act Airbnb broke was (1) not including a physical mailing address, (2) not mentioning it was an ad, and (3) not including an unsubscrive link. Otherwise, CAN-SPAM is laughable at best. It's hardly enforced. Don't expect Craigslist to come at Airbnb with a lawsuit, it'd probably not hold up in court. I see this instead as one of Airbnb's many tactics to try and reach out to users. If you look at this logically, they've been covered by the press a lot. The amount of growth they might (or might not) have reached doing this would hail in comparison to how much they obtained by press and simple product and customer development.

yardie 15y ago
I see the astroturfers are coming out in their defense.
jhermsmeyer 15y ago
Saying "the only part" of the law airbnb broke and then listing 1,2,3 violations is laughable. Also I quite enjoy the irony that an account name of throwaway is defending the practice of using throwaway gmail accounts to spam people. Warms the cockles.

BYurgi 15y ago

> After harvesting email addresses (I only grabbed real email addresses, not anonymous craigslist addresses) I did one email blast to people that were advertising vacation rentals on craigslist...My results: 1,000+ vacation rental owners signed up and listed their properties on my test site. He's missing a few steps... How many email addresses did this dude harvest and blast to get 1,000+ people to sign up for his special vacation rental site? What did the email say that he sent out? Was he also sending them from throwaway gmail accounts? What were his tactics? This guy needs to follow up with more details. All he's shown is that at some point he posted 4 vacation rentals to Craigslist and he got 5 emails linking to AirBNB. His findings rely on the fact that he got 1,000+ people to sign up their vacation rentals on his site after spamming some number of emails he admits to harvesting. The "test" site he made (he's since edited it out), but google cached it http://bit.ly/iOPWi5 http://bit.ly/iOPWi5 is www.mimbeo.com. A quick look at the press page (http://mimbeo.com/vacation-rentals/press http://mimbeo.com/vacation-rentals/press) and they have press releases announcing they got 1,000+ properties in one month: http://www.prlog.org/10408565-mimbeocom-reaches-1000-vacation-rental-listings-in-its-first-month.html http://www.prlog.org/10408565-mimbeocom-reaches-1000-vacatio... Here's a quote: > "It's a no-brainer" said one of the founders. "We are offering owners and managers the same great service they receive from the pay-for-placement sites like VRBO & Homeaway. Not only that, but we broadcast our members listings to Facebook, Twitter, Myspace and more - and we do it all at no cost. We like to think of ourselves as the 'craigslist' of vacation rentals - with the added bonus that the listings do not expire - which is the main complaint we have heard from craigslist users." Seems odd to go through all that for a weekend project "test" website. What's this guy's deal? This seems weird...

Eternal 15y ago
True this guys methods are questionable, as well as his objective. But if his claims are true than both and AriBnB was faking user recommendations to gain users than they should get criticized for it. Even more so if they systematically violate Craiglist ToS.

Lucadg 15y ago

I lead a group of guys trying make money online with the rental business, so they can travel. Each one is responsible for an area and it's hard to get new owners and apartments, believe me, but we never resorted to spamming. Instead we contact the Owners directly and openly, then we go to meet them personally and see the apartments, when possible. This way is much slower, but at the end we have much better listings for our customers. We'll never be a billion dollars company of course.

johnx123 15y ago

I believe, PG spammed more than what the two ladies did in CL.

mbertrand 15y ago

Interesting amount of negative feelings towards AirBnB, and as a disclaimer I am a big proponent of "Do, and ask for forgiveness". This is what startups are all about, using available resources to their advantage and getting out their and hustling (even if it involves bending the rules a bit). Obviously rental owners (their target) were not to upset about being told of another resource to list their site on otherwise they would not have continued this approach. I can see where some of you are coming from in feeling violated/disturbed by this but given that a.) it appears to have worked b.) they informed users of something they wanted c.) no one complained (until now). I this that it was a very effective/creative way to solve their supply problem and it obviously worked.

theklub 15y ago

It really shouldn't shock anyone that very few people follow the rules.

tuckbuck 15y ago

great writeup. AirBnB may not be wrong, but what this means, it that anyone else can do the same thing . this definitely reduces their valuation.

deleted 15y ago

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andrewcross 15y ago

While this is clearly not the most ethical behavior, how many of us wouldn't do the exact same? You gotta do what you gotta do.

Hisoka 15y ago

Whether or not it's wrong or right doesn't matter.. what matters is are there consequences? If not, then the guys at AirBnB probably could care less, and are laughing and enjoying cocktails in rooftop bars while the rest of us are toiling away at jobs... Remember, we only got 1 life to live.. think about it. Arguing right or wrong makes little sense

allanscu 15y ago

Good research. I don't think this is anything new. I'm familiar with a few YC companies that use CL as a method to get their supply (in this case vacation rentals).

Caligula 15y ago
Curious which ones and how? I wonder if this is the tenacity of founders that pg speaks of.
windsurfer 15y ago
This is unethical.
- baudehlo 15y ago
  And illegal. It is email advertising in violation of the CAN-SPAM act.
- orenmazor 15y ago
  though successful.
  - palish 15y ago
    Though unethical. If growing a billion dollar company means setting aside what makes me a good person, then I wouldn't want a billion dollar company. Nor would I want to work there.

rvanniekerk 15y ago

Good read, although, I wouldn't necessarily consider advertising your services to people already listing vacation rentals as "blackhat". Blackhat insinuates that someone is being gamed, in this case, both the home owners and AirBnB are benefiting (maybe craigslist is losing out?).

smackfu 15y ago
"Advertising your services" via faked emails is pretty black hat.
qeorge 15y ago
I think it counts as "blackhat", but I'm not really outraged. To me, its equivalent to cruising the singles section of Craigslist and responding as a sock puppet recommending a particular dating site. Not a huge deal, but its not 100% above board either.
helium 15y ago
Of course it's blackhat. They're sending unsolicited, automated spam to people who explicitly stated that they didn't want emails regarding commercial interests. There is a big difference between advertising and spam.
- pbreit 15y ago
  "explicitly stated" = "did not change the default"
  - jasonwatkinspdx 15y ago
    You still have to respect opt out, even if it's the default.

bproper 15y ago

Does the new "illegal hotels" law have any effect on AirBnB? http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-with-2k-bookings-a-night-but-many-listings-may-be-illegal/ http://www.betabeat.com/2011/05/31/airbnb-takes-manhattan-wi...

aresant 15y ago

"It is a story of pure unadulterated hustle. And I love it." - Fred Wilson talking about the AirBNB team's Obama cereal hustle. I'd like to borrow his words in regard to this post. Fred's original post - http://www.avc.com/a_vc/2011/03/airbnb.html http://www.avc.com/a_vc/2011/03/airbnb.html

kwis 15y ago
The cereal was great, scrappy, creative hustle. The spam is the opposite of all that. The spam destroyed a wonderful founding story. The spam destroyed their professional and ethical credibility.
suking 15y ago
Not that I'm against what they're doing and if I was a VC I probably wouldn't care too much - but it's somewhat illegal in this case... Certainly against CL ToS as well.
- callmeed 15y ago
  Illegal how? I get the ToS violation, but not sure about legality ... Are you saying it's a violation of the CAN-SPAM act? Or something else?
  - suking 15y ago
    CAN-SPAM, sending from a fake address (illegal headers). CA has a specific law that pre-empts CAN-SPAM that definitely makes this illegal if sent from CA (don't ask how I know).
    - stickfigure 15y ago
      Man oh man, there are a lot of (very bad) armchair lawyers on HN. You might consider AirBnB's actions unethical, but they certainly aren't illegal - which would be obvious to anyone who bothered reading the CAN-SPAM wikipedia page. It's not illegal to violate Craigslist's TOS, and AFAICT the "spam" messages were sent from a legitimate Gmail account. For those of you claiming "I'd rather be poor than violate craigslist's terms of service": Bullshit.

MatthewB 15y ago

I love this. Being scrappy is one of the best qualities among entrepreneurs. The attitude of "do anything" to succeed usually results in success not to mention it is one of the characteristics that PG looks for in founders.

run4yourlives 15y ago
Well, I'll be sure to include you along with AirBnb on my list of "People you cannot trust to be ethical".
dcosson 15y ago
I agree - maybe I'm just drinking the YC gatorade here, but to me it shows scrappiness and dedication and does not seem especially immoral. Who did it hurt? For the people who were annoyed by the spam, it took 30 seconds out of their life to read and delete the email. For the ones who went ahead and posted their rental on airbnb, it probably led to more business plus the added benefit of getting to use airbnb's elegant interface instead of trying to keep track of dozens of craigslist emails. The only money that airbnb made from this lie was by finding people additional renters for their homes, which seems like an everybody wins scenario. If it was outright illegal then they'll have to face the repercussions of that, but I doubt they'll lose much sleep feeling bad about what they've done.
deleted 15y ago
[deleted]
llimllib 15y ago
Even when it's illegal? Is this an action that you consider moral but illegal (re: CAN-SPAM and various state laws)? Should AirBnB's investors be worried about the potential liability of lawsuits? > Each separate email in violation of the CAN-SPAM Act is subject to penalties of up to $16,000 - http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business http://business.ftc.gov/documents/bus61-can-spam-act-complia...
- kwis 15y ago
  I'm very curious if they misrepresented the nature of their growth to their investors. If they did, they could be in violation of securities laws, in addition to CAN-SPAM.

brown9-2 15y ago

When someone says "Craigslist spam!", is the first you think of a) spam posted to craigslist as listings, or b) emails advertising something (surreptitiously) to people that have listed their property on craigslist? Not that the latter isn't "spam" of a sort, but it doesn't feel quite like "craigslist spam".

hollerith 15y ago
Although it is spam of some sort, a better description would probably be "using sock puppets".

gigantor 15y ago

Blackhat or not, this is a great example of how there are very viable alternatives to SEO in terms of internet marketing. The ever changing rules and laws of search engines unfortunately make or break a vast majority of online businesses.

Hisoka 15y ago
I agree. What AirBnB did is the modern version of creating thin content farms to spam Google search results.

bakbak 15y ago

just wondering what s/w do you use for mass mailing and craiglist email harvesting? without getting sandboxed / blacklisted ...

omarchowdhury 15y ago
You don't.

euroclydon 15y ago

One day someone will come along and scrape the data from that "clunky and expensive AirBnB" to start an XX million dollar startup.

jmtame 15y ago

In Startups Open Sourced, he says Airbnb "tried everything" but he says that press is the single best source of their growth. Having the happy customers came in second, but would be interested to hear if this helped them much. It's hard to believe that Craigslist is the reason why they'd be so successful when the product is so easy to spread by word of mouth and press.

gorm 15y ago

Welcome to The Mesh!

ChuckFrank 15y ago
I assume that you are talking about this? http://meshing.it/ http://meshing.it/ the new sharing society?

nahlyee 15y ago

If CL spam is responsible their phenomenal growth, then more power to them. It wouldn't work if they didn't have a better solution to a huge market need.

kcurtin 15y ago

i think people would have a much different view if this wasn't airbnb and was a less reputable company. The things described in the post definitely constitute as spam and violate CAN-SPAM...but these types of tactics do work (if they didn't we wouldn't have spammers) and there wasn't anything malicious about it.

palish 15y ago
If there were nothing malicious about what they did, then why didn't they advertise as fake men, instead of as fake women?
lurker19 15y ago
AirBnB is less reputable, and this incident is why.

orenmazor 15y ago

The author uses the term "black hat" way too much and very loosely.

rorrr 15y ago
Spam is black hat.

savrajsingh 15y ago

alluded, not eluded

Mizza 15y ago

Is anybody else slightly disturbed by all of the 'attaboy!' comments here on a post exposing unscrupulous and probably illegal business tactics? Think the response here would be the same if it was MicroSoft or the RIAA caught in something like this and not a YC alum? Anyway, great investigation and great analysis here, I think.

chipsy 15y ago
It's hard to say. Microsoft can push out new products with splashy announcements, TV ads, etc. Similarly, they can afford to do "proper engineering" these days. But Microsoft as a startup, and as a growing company, was extremely unscrupulous. Likewise, the majority of the "scrappy" web startups cheat on their tech and cheat on their marketing, in the hope that they can find traction before they lose goodwill, and get profitable so that they can go back and fix the system before it blows up. On a personal level this is very frustrating, because we like everyone we know to behave in a honest and straightforward fashion. But from a business standpoint there is a huge tradition of using some amount of misdirection to push new products to people. Parallels can be made with the animal kingdom and the use of camouflage, bright colors, and social interactions. Sometimes your business is in a position to strut your stuff, because you're the lion in the room. Other times you have to sneak around or be deceptive. Sometimes, fragile, trust-breaking tactics work - at least for a time. In the end, the real condemnation for this behavior has to come from yourself, not from others. The market sees what is in front of it at the moment; it rarely knows the truth.
prodigal_erik 15y ago
This. I used to think they were clever, but now we know they're such repellent scumbags willing to abuse public resources for private gain that it's actually a black mark against Y Combinator to have been partly responsible and holding dirty money.
- colinplamondon 15y ago
  Seriously?

ChuckFrank 15y ago

Clearly the unethical part of this discovery is that Airbnb used 'shell' gmail accounts to do their work. Instead they should have found a way to present themselves with honesty and integrity to future members. What are the good reasons for Airbnb's success and valuation? Are there any stories about their actions that inspire both confidence and congratulations. (aside from their Obama O's and Capt'n McCain flash success).

psawaya 15y ago
I agree. As if they're fooling anyone pretending to be an anonymous stranger from gmail who just happens to love promoting airbnb.
- pdenya 15y ago
  Didn't they fool pretty much everyone? Even the author only had a suspicion and resorted to some (impressive) tests to verify.
  - psawaya 15y ago
    Do real humans send out advertisements to strangers on behalf of websites? Making sure to cite pageviews? Don't get me wrong, I'm glad he confirmed his suspicion before blogging about this. But even one e-mail like that is suspicious.

pgroves 15y ago

I started my own company to get away from the do-anything-for-a-sale attitude of corporate america. I do not admire or respect AirBnb for this behavior. I don't care that it worked. I don't care if it was legal or not, it was dishonest. I know it's common, but it takes a fundamental lack of respect to lie directly to another human being. I'll just continue to toil in obscurity; self-respect intact.

marcamillion 15y ago
I am not being facetious by this question, but did you make a product that you are selling ? If so, how did you get your first set of customers ? Please share. If you have not made a product that you need to sell yet, I think you will find when you do it, it's MUCH, MUCH more difficult than you ever thought it would be. Also, selling a service - i.e. web development/design is very different than selling a product.
- alain94040 15y ago
  This is a FAQ: for your first sale, you sacrifice the price (all the way down to free if you have to). For the next sales, you show your reference customer.
  - skmurphy 15y ago
    Free is not a sale. You have to charge something to claim them as a customer.
    - alain94040 15y ago
      You know what I mean. Even in EDA, having a reference "user", as long as they are using the product, is a major achievement that will be leveraged [to death] with future [paying] customers.
      - skmurphy 15y ago
        I am not trying to be pedantic. In my experience there is an enormous difference between having a user and having a paying customer. They may be a user before they are a paying customer, but there is a very significant difference.

buildorfail 15y ago

I do not want to argue if this type of stuff is good or bad. But I do want to point out to you all that list of tech gods is full of similar stories. Off the top of my head: MySpace started out purely through spam...Tim Ferris started out in online supplement sales...People complained about Plaxo doing black hat stuff... they sold ok. People complained about Zynga ripping off other games and about breaking every Facebook platform rule there was... look at Mark Pincus now. People complained about Facebook's Mark Zuckerberg stealing their idea... he does not care.

fs111 15y ago
So and your point is now, that it's okay to be unethical like the people you mentioned, just to get rich?
- buildorfail 15y ago
  not here to discuss ethics. Just making the point that this is extremely typical and far more common than you may think.
keiferski 15y ago
"Everyone's doing it" isn't a valid excuse.
- buildorfail 15y ago
  you did not read the first line of my post. My point is just that this is nothing new...
deleted 15y ago
[deleted]

marcamillion 15y ago

Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell yes. But is it "wrong" ? I don't think so. I always thought that getting that first set of customers that will take you to product/market fit was going to be easy. What with the Twitterverse, Facebook and all and sundry. But let me tell you, from experience, it is DAMN HARD! I guess the true test of whether or not this is 'unethical' is whether those people that signed up felt scammed after using the service. If I were one of those people that got that email, sure I might feel a bit 'weird' that they presented themselves as 'Jill D' and not AirBnB, but after going through what I have been doing the last few weeks - trying to get customers - I can't say I would be upset.

klbarry 15y ago
Perfectly in line with what I was thinking, thanks!
thomasgerbe 15y ago
"Is this 'grey' ? In the sense that it can be interpreted as 'shady' ? Hell yes. But is it "wrong" ? I don't think so." I post a listing on Craigslist specifically saying it's not "ok for others to contact me about other services, products or commercial interests" (an option in Craigslist) and then a business tries to convince me to use their site using a disguise DESPITE clearly stating that I don't want to be contacted? No, I'd say the true test of whether something is ethical or not is whether it violates rules and/or the choices of a user. Then again, I'm the type that actually wants businesses to respect my decision.
- marcamillion 15y ago
  But wouldn't you say that's a bit unreasonable given that if you listed your apartment/house for rental on Craigslist - it can be safe to assume that you are interested in renting your house/apartment, no ? I think every 'savvy' user always checks those boxes, but if there is an option that allows you to actually fulfill your original intent - i.e. you got no hits on Craigslist, but with AirBnB you have tons of requests and make a ton of money, wasn't that a win/win - even though they used a 'grey' tactic to reach you. You say you don't want to be contacted, but that's to protect you from emails from the Nigerian prince and the blatantly obvious annoying spam. But things that are targeted at you, and can add value - I think it would be safe to say it makes sense in those cases.

temphn 15y ago

AirBnB raided Craigslist for users. Those users made more money and had a far better user experience on AirBnB to boot. Not exactly your traditional Viagra/Nigeria type spam. When the end doesn't justify the means, sure, complain about the means. But this is not such a case.

jacoblyles 15y ago
We shouldn't forget that Craigslist is an evil monopoly
- peteforde 15y ago
  Bullshit. Citations please!

techcofounder 15y ago

can we please get a response from one of the AirBnB founders?

alain94040 15y ago
I second that. What scares me the most is that no one from AirBnB came on that thread to strongly deny this article. And you know they read HN a lot and post often. So I'm sad.
- kanamekun 15y ago
  I'm sure that their attorneys have let them know that acknowledging that they sent out spam would expose them to massive damages under the CAN-SPAM laws. So AirBnB can't really acknowledge what they did and try and move on... financially, it would be ruinous for them. They are probably hoping that the controversy will blow over, until the statute of limitations expires at which point they can apologize and blame the previous regime.
  - deleted 15y ago
    [deleted]
  - alain94040 15y ago
    Since this has been on the front page of HN long enough, I expect more in-depth coverage from TechCrunh really soon. That's usually how it works. That could get the ball rolling. (I know TC has its critics, but they are exactly what's needed for this kind of story)

nhangen 15y ago

This is the same thing spammers do to steal money from people, and it's the same thing that dating sites do to pretend to have women interested in meeting dudes. Either way, it's fraudulent. I don't hate that they did this, but I hate that they tried to pretend they were anonymous women that happened to really like AirBnB. Why be so shady about it and instead why not just be honest? "Hey, we noticed your rental and thought you might like something we built. It's helped a lot of people fill vacancies and make money; check it out - url"

thomasgerbe 15y ago
I assume they couldn't be honest because it would've violated Craiglist's Terms of Use, namely: You agree not to post, email, or otherwise make available Content: k) that constitutes or contains "affiliate marketing," "link referral code," "junk mail," "spam," "chain letters," "pyramid schemes," or unsolicited commercial advertisement; l) that constitutes or contains any form of advertising or solicitation if: posted in areas of the craigslist sites which are not designated for such purposes; or emailed to craigslist users who have not indicated in writing that it is ok to contact them about other services, products or commercial interests. m) that includes links to commercial services or web sites, except as allowed in "services"; I wonder if Craigslist could legitimately sue Airbnb.
- run4yourlives 15y ago
  Sue them for what, exactly? Coincidence? While it doesn't take a rocket scientist to figure out what's happening here, it takes a bit more than connecting the dots to make a legal case stick. [EDIT] Just to be clear I'm certainly not a fan of this. It strikes me as unethical and a little low on the "sleazy marketer" scale. I don't however beleive that this is illegal unless you can somehow prove that JillSmith03@gmail.com is professionally connected to AirBnB, and that this was done under corporate directive.
  - alain94040 15y ago
    It's actually very easy to prove, because the same email was sent from several different accounts: you go after AirBnB directly and shoot for discovery, get them under oath to answer whether they did this or not. If you have ever been questioned under oath, you know how tough it is to lie (ping me offline for details). No point in chasing the gmail accounts themselves, that would be a dead-end.

forgotmyuser 15y ago

Glad you did all that testing to find something so damn obvious. Look at how they rank on google - they don't. It was really obvious they were spamming craigslist.

kongqiu 15y ago
If it is/was that obvious, care to share any other 'obvious' practices that may not be common knowledge?
- forgotmyuser 15y ago
  blackhatworld.com > everything you need to know.

amirhhz 15y ago

Is this something the the AirBnB guys would put on their YC app form if they were applying again? And then what would PG & co make of it? In fact, did pg know about this or encourage it in the first place? Answers to these questions might be a good test of whether they should have done it or not.

SkyMarshal 15y ago

"Some very famous investors have alluded to the fact that they look for a dangerous streak in the entrepreneurs they invest in…and while those investors will never come out and tell you what they mean, this kind of thing is probably what they mean." Eg, be naughty, not evil. Whether they crossed the line or not, dunno. It's a far cry from Microsoft intentionally leveraging their OS monopoly to destroy companies and corner industries back in the day.