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Yeah, the implied YC association in all of this is a bit bizarre. AirBnB raised about 0.01% of their financing from YC. They've got a strong board comprised o

by wheels 15y ago

Yeah, the implied YC association in all of this is a bit bizarre. AirBnB raised about 0.01% of their financing from YC. They've got a strong board comprised of some very experienced, good VCs. Saying that YC should handle this would be like suggesting that Bill Gate's Harvard fraternity should clean up Microsoft's faux pas. (That's a bit hyperbolic, but I think you see what I'm getting at.) Interestingly, perhaps, I see YC's connection to this story as more that it runs the site that broke the story: this one. I suspect pg getting involved is more because he personally likes the AirBnB founders rather than that he sees it as the responsibility of YC.

hollerith 15y ago
>AirBnB raised about 0.01% of their financing from YC. That is not the relevant number. YC will tend to care about the bad publicity in direct proportion to how much of the stock they own, and they probably own a lot more than 0.01% of AirBnB.
- wheels 15y ago
  That's silly. It implies that YC doesn't trust AirBnB's board, who all have more skin in the game, know the situation better and on top of that, are mostly personal friends of the YC partners.
  - dlss 15y ago
    "Skin in the game" is percent ownership. YC had to invest in a lot of startups that didn't get as far as AirBnB to end up owning ~6% of an AirBnB.
    - wheels 15y ago
      For the record, Airbnb has raised 3 rounds of funding, so YC's percentage is probably closer to 2% than 6% (0.06 * 0.7^3). Other than that I don't see how your point is relevant. Sure, I get that YC's share of Airbnb is valuable. But it's dwarfed by others who have more power both formally and informally.
      - dlss 15y ago
        You said roughly "other people have more money on the line, so YC should let them do it" This is wrong in far more than 5 ways, but we will start with 5. 1. Your model of "money on the line" doesn't seem to account for diminishing marginal utility (if a billionaire has $1 million at risk, and a millionaire has $1k at risk, the risk is greater for the millionaire even though the percentage risk is equal). 2. Your model doesn't seem to account for relative portfolio size (if a billionaire risks $1 million, and a $10 millionaire also risks $1 million, the risk is greater for the $10 millionaire) 3. Your model doesn't seem to account for the opportunity cost of time (YC seems to like/have time for talking to the press about YC companies, something that many VC firms don't) 4. Your model doesn't seem to account for relative skill (YC seems better at talking to the press than most VC firms) 5. Your model doesn't seem to account for compensation options (if YC doesn't feel that time spent would be positive ROI, AirBnB or the other investors might be able to pay YC to do it) In short, my coming on HN to read interesting business discussion, only to find thoughts like "Saying that YC should handle this would be like suggesting that Bill Gate's Harvard fraternity should clean up Microsoft's faux pas (That's a bit hyperbolic, but I think you see what I'm getting at.)" is like being invited by a friend to the symphony, and showing up to discover a five year old alternating between playing a xylophone and eating wood glue (That's a bit hyperbolic, but I think you see what I'm getting at).
smhinsey 15y ago
I think it might have something to do with the articles about how saavy the founders are, how some who passed on it regretted doing so, etc., than purely their involvement as investors. This story does not mesh well with that message.
- tptacek 15y ago
  Just from the numbers, it is likely that even if YC wanted to take on a role in addressing this Airbnb issue, they would have no ability to do so at all. Airbnb is run by its board, not by YC.
  - smhinsey 15y ago
    Since I'm not sure if this is in response to me or just a general comment, I want to clarify that I don't personally think YC has much room to maneuver and I don't think they should be the ones out in front of the story. I just think that articles like this one[1] have put them in a bind with respect to this story. [1] http://www.paulgraham.com/airbnb.html http://www.paulgraham.com/airbnb.html
    - tptacek 15y ago
      No part of this linked story has anything to do with the current drama. In fact, it's the opposite: that's Paul Graham saying that the thing he likes best about Airbnb is that they are likely to pivot away from Etsy-style small-ball with people's rooms and towards direct competition with hotels. I'm left with the impression that you think YC is in a bind here because you want them to be in a bind here. It sure is a lot more fun to talk about, isn't it?
      - smhinsey 15y ago
        Of course it doesn't have anything to do with it directly, I'm talking about the perception created by that sort of story and the coverage it spawned. If you're on record talking about someone's positive qualities, and they make a mistake, or even are accused of making a mistake, that puts others in a position of expecting you to have a position on it. But they can't really take a public position on it beyond what pg's already said on the matter, and we see what good that did. This is the bind I am talking about. I don't want them to be in a bind. I have no feelings one way or the other about the matter, really, I am just attempting to offer my point of view on why people are clamoring for YC to be more vocal about this topic.

by wheels 15y ago

hollerith 15y ago

>AirBnB raised about 0.01% of their financing from YC. That is not the relevant number. YC will tend to care about the bad publicity in direct proportion to how much of the stock they own, and they probably own a lot more than 0.01% of AirBnB.

wheels 15y ago
That's silly. It implies that YC doesn't trust AirBnB's board, who all have more skin in the game, know the situation better and on top of that, are mostly personal friends of the YC partners.
- dlss 15y ago
  "Skin in the game" is percent ownership. YC had to invest in a lot of startups that didn't get as far as AirBnB to end up owning ~6% of an AirBnB.
  - wheels 15y ago
    For the record, Airbnb has raised 3 rounds of funding, so YC's percentage is probably closer to 2% than 6% (0.06 * 0.7^3). Other than that I don't see how your point is relevant. Sure, I get that YC's share of Airbnb is valuable. But it's dwarfed by others who have more power both formally and informally.
    - dlss 15y ago
      You said roughly "other people have more money on the line, so YC should let them do it" This is wrong in far more than 5 ways, but we will start with 5. 1. Your model of "money on the line" doesn't seem to account for diminishing marginal utility (if a billionaire has $1 million at risk, and a millionaire has $1k at risk, the risk is greater for the millionaire even though the percentage risk is equal). 2. Your model doesn't seem to account for relative portfolio size (if a billionaire risks $1 million, and a $10 millionaire also risks $1 million, the risk is greater for the $10 millionaire) 3. Your model doesn't seem to account for the opportunity cost of time (YC seems to like/have time for talking to the press about YC companies, something that many VC firms don't) 4. Your model doesn't seem to account for relative skill (YC seems better at talking to the press than most VC firms) 5. Your model doesn't seem to account for compensation options (if YC doesn't feel that time spent would be positive ROI, AirBnB or the other investors might be able to pay YC to do it) In short, my coming on HN to read interesting business discussion, only to find thoughts like "Saying that YC should handle this would be like suggesting that Bill Gate's Harvard fraternity should clean up Microsoft's faux pas (That's a bit hyperbolic, but I think you see what I'm getting at.)" is like being invited by a friend to the symphony, and showing up to discover a five year old alternating between playing a xylophone and eating wood glue (That's a bit hyperbolic, but I think you see what I'm getting at).

smhinsey 15y ago

I think it might have something to do with the articles about how saavy the founders are, how some who passed on it regretted doing so, etc., than purely their involvement as investors. This story does not mesh well with that message.

tptacek 15y ago
Just from the numbers, it is likely that even if YC wanted to take on a role in addressing this Airbnb issue, they would have no ability to do so at all. Airbnb is run by its board, not by YC.
- smhinsey 15y ago
  Since I'm not sure if this is in response to me or just a general comment, I want to clarify that I don't personally think YC has much room to maneuver and I don't think they should be the ones out in front of the story. I just think that articles like this one[1] have put them in a bind with respect to this story. [1] http://www.paulgraham.com/airbnb.html http://www.paulgraham.com/airbnb.html
  - tptacek 15y ago
    No part of this linked story has anything to do with the current drama. In fact, it's the opposite: that's Paul Graham saying that the thing he likes best about Airbnb is that they are likely to pivot away from Etsy-style small-ball with people's rooms and towards direct competition with hotels. I'm left with the impression that you think YC is in a bind here because you want them to be in a bind here. It sure is a lot more fun to talk about, isn't it?
    - smhinsey 15y ago
      Of course it doesn't have anything to do with it directly, I'm talking about the perception created by that sort of story and the coverage it spawned. If you're on record talking about someone's positive qualities, and they make a mistake, or even are accused of making a mistake, that puts others in a position of expecting you to have a position on it. But they can't really take a public position on it beyond what pg's already said on the matter, and we see what good that did. This is the bind I am talking about. I don't want them to be in a bind. I have no feelings one way or the other about the matter, really, I am just attempting to offer my point of view on why people are clamoring for YC to be more vocal about this topic.