There is one part of this explanation that seems weird to me.
If you read through http://davegooden.com/2011/05/how-airbnb-became-a-billion-do... and look at the links delivered, they don't have any sort of affiliate IDs. Which means that Airbnb had no way to tie this traffic to that advertising campaign, and had no tracking.
It is possible that they legitimately were willing to pay a third party contractor something based on all of their traffic, no questions asked (I've seen that kind of deal with SEO companies before), but it seems odd.
more & more, i get the sense that a great % of the b2c startups that achieve critical mass do something 'sneaky' along the way to get over that initial hump.
in facebook's case, the untold story is they basically blasted the university email databases -- how else could you scale a social network when everyone's attention was already so diverted? (i'll give them credit though because plenty of companies have prob tried similar tactics (e.g. uloop comes to mind), but haven't turned it into much)
another semi-related one that stands out is how i've heard the reddit founders originated the conversation from a number of fictitious accounts and once the conversation picked up around them, they just let it take off on a life of it's own.
Steve and I did submit on reddit for the first few weeks after launch under multiple usernames (there were no comments or self-posts, so it was just link submissions).
We also asked friends & family to use the site, and a few of them did, but we had to go beyond our limited personal network to ensure new and interesting links on the front page every morning. Fortunately, we only had to do it for a few weeks and there was enough momentum after that for us to just routinely post under our proper account names.
You didn't spam anybody. You didn't go against anybody's explicitly stated contact preferences. You didn't even represent yourself as real identifiable people, since the whole site was built to support nicks and personas.
Reddit's way of solving the chicken-n-egg problem looks relatively much OK to me. It's tolerable even if it's deceiving. It's an acceptable way of kickstarting a community, IMO.
Right. Not just b2c, but every country in the world was formed by people who killed the previous inhabitants, took their land, and set up a new system of laws. Afterwards they set up myths about how great and moral they were. But the birth of anything great involves struggle and disruption.
If AirBnB wasn't great, sure, then what they did wouldn't be worth it it. There has to be room for breaking small rules to build big things. Very few real entrepreneurs will disagree with this -- anyone who gets morally/ethically sniffy in public about raiding a bad service (Craigslist)to build a far better one (AirBnB) is either acting or someone who's never had a controversial thought in their lives.
You cannot build something truly disruptive if you are scared to disrupt any rules. Be prepared for resistance and make sure that what you build is worth it. But the ends really do justify the means.
Interesting excerpt from Startups Open Sourced on this:
Q: How long did it take to get the beta version of reddit built?
I think we launched in June, a little less than a month after we got started. It was a really rough version of the site and it was basically a version that we just finally got online because it was tough. It's not like there were a lot of people clamoring to see what we were about to do. We were just two random kids out of UVA. There were people who were curious to see what Y Combinator was going to produce, and it helped being the first YC company to launch.
To get that initial traction we benefited from those Paul Graham fans that were just curious about what Paul was doing, what YC was doing, and Paul made sure to mention us whenever he was talking about Y Combinator. A couple of his early essays helped out because he would link to us and, certainly, having Paul Graham readers as your first users on a social news website is a great asset, because the links that they are going to submit are generally high quality and pretty thoughtful and so it sets the tone very nicely.
As for growing it outside of that, I begged a lot of my friends and I definitely emailed that old list of folks from that PHPBB forum, announcing it. But the rest of it was just a lot of grunt work. Every time someone wrote a blog entry about reddit—and this is, of course, pre-Twitter—good or bad, I was going to leave a comment there and engage them, talk to them, make a note of them. I just worked my way up the food chain, so to speak. The funny thing is, nowadays, TechCrunch is considered the place to launch your site. reddit never got a single mention on TechCrunch until the day we got acquired.
I always stress to startups that they shouldn't be building and working for TechCrunch appearances because those don't really mean anything in the end. You can still have a successful startup without ever having a write-up on TechCrunch, for instance.
Q: Did you build fake accounts to get user growth early on?
Yes, I've said this publicly, usually to some laughter. It certainly helped. This was also one of those things that fell within the purview of the non-technical founder. Steve made this nifty little way—a form field—for us to just type in a random username that came to mind, along with the URL, and the title, and that's who it would be submitted by. That definitely helped, but it really only mattered for the first three weeks, and then there was some point when Steve and I didn't actually have to do anything, and we were so thrilled.
We didn't have to submit or vote; there was no commenting back then. The site just worked, and the trick with a social site, especially one like reddit, is: if people come to it and it's empty, the incentive for them to want to contribute to it is really, really low, especially when it's a totally new thing. Even now, when new reddits are created all the time, it's really tough to feel interested in submitting to a lonely, empty new reddit, but once there is a little bit of momentum, once there's a few new users, there is some social proof and this is now what, six years later?
Back then you show someone an empty reddit and they just see a blank website and they can't even comprehend what or why they should ever consider participating in this, so I really have no qualms about having done that, in the beginning. It would have been a different story if we had commenting and I was writing comments like, “What a brilliant comment, Alexis, your genius is unmatched!” That would have been crossing the line. And obviously fake.
I bet a similar trick was done to start sites like Digg or Quora. Any social-based site needs initial momentum and content to attract real users, so someone needs to provide it first...
Can you present any other examples, especially re: marketing your own social-like startup in this way? That might be interesting.
Another thing that is odd, is that if they were really rogue, why does it appear that all their emails were copies. You would think that the individual members would have slightly different email pitches.
They did have one piece of identifiable information they could use, the houses themselves. If they had a list of properties on craigslist, they could tie that to anyone who signed the same property up on airbnb. Not an easy metric to add to your analytics package straight off, but it wouldn't take too much effort to figure out just the conversion rate (x emails sent, y new signups from those addresses).
The way the link between companies and spammers usually works is that the spammer is contracted at arms length as an 'affiliate' and is paid per lead. The company will try to be willfully ignorant of the tactics being used so they can claim that they just have an affiliate program and they don't know how the traffic is generated.
Edit: To clarify, I'm not saying that this is what Airbnb did. In fact the original post said the emails had clean urls without referral IDs. To me that suggests a sloppy internal campaign with no metrics.
yeah, any company caught doing something like this would likely respond pretty much just like this, intentional or not.
rogue contractors or unauthorized employees, they were acting without the knowledge/consent of higher ups, they've since been fired or contracts terminated, etc..
Your description presumes too much that the company intends the result. It is true that there are some willfully ignorant companies. However companies that try to have good affiliate programs often find those programs difficult to police.
Until you have specific evidence otherwise in any particular case, it is best not to be too fast to ascribe to malice. (Of course that benefit of the doubt is exactly what unethical companies are hoping to take advantage of.)
"OK, I've finally had it with this company. I post some properties on craigslist from time to time, and I get tons of spam and scammers, but one that really sticks in my craw is airbnb.com
I have emailed them more than a few times asking them to cut it out, and that soliciting clients who post properties on craigslist is not the best way to do things.
Yet, here we go with the latest round of email solicitations from airbnb.com. I really hope someone from the company reads this. I know they are well funded by Y-combinator venture capital, so why outsource this type of work and spam?"
http://www.vacationrentalscommunity.com/forums/t/2767.aspx
Interesting. Anybody know when this spamming actually stopped?
Is there an official response yet from PG regarding contracted use of Black Hat tactics as a starting YC company? I understand breaking the rules but black hat?
It seems like I could contract a spammer and discontinue the contractor services when getting a HN frontpage. The contractor would get a sizable exit sum. All because AirBnB is allowed to 'get away with it' after at least a year of doing it [0].
It would be my opinion that PG probably doesn't care.
If this wasn't already clear, we're not looking for the sort of obedient, middle-of-the-road people that big companies tend to hire. We're looking for people who like to beat the system.
I understand that, going against unjust rules, regulations and industry monopolies because otherwise economically; people pay more (taxi monopoly) or inconvenienced (no driverless cars allowed).
But these black hat email marketing tactics are akin to harassing people automatically without discrimination. Posted two properties? At least two emails from two 'women' advertising AirBnB. It's effectively destroying Craigslist if every company including my potential own escape backlash for spamming users.
Some people like me look to PG as a chaotic good role model for entrepreneurs.
I think most people are looking for PG's general opinion over the issue. He has had written about certain "naughtiness" in his essay(s?). To what extent does he think it's OKAY?
No $Billion company, or its investors will apologize for such actions.
Further, I agree with the above post - While it seems bad on the surface - there is really nothing wrong with this, they are not misleading the owners to using a shady service. Airbnb is a great service.
Further - It would be time that the AirBnB team actually use this to their advantage.
They need a boilerplate response to CL listings that says:
"ABnB is now the first $1B company with massive reach, appeal and customer satisfaction that is committed to getting your place rented and seen globally. Come check us out - we are XXX% more effective than CL with YYY% more return on your listing with XYZ tools that provide you a service dashboard to see just how well your property is doing."
All of which is NOTHING That CL can provide.
This is another reason, actually, why I am starting to despise CL's lethargy. They could have owned this space, but they sat around claiming higher motives.
The truth is that CL produces an insane amount of revenue for the head, Craig - and he is happy with that.
Have I used Airbnb? Yes. It was a great experience. And I have recommended it to all my friends (until now at least).
But that doesn't mean I think that they should be excused for violating a very rationale Terms of Service policy, e-mailing people explicitly against their wishes (as indicated by don't contact me for commercial services option), and creating e-mails that violate CAN-SPAM policies.
Legality aside, I think it's slimy and in my eyes, taints their grassroots story which I had really embraced and enjoyed telling people.
I don't understand the excuse-making ... if it is OK for 1 company to spam you, then surely it is OK for 1000 companies to spam you... Craigslist should be considering legal action at this point.
It depressed me when I hear about this kind of story, because it makes me realise tech and startups often aren't focused on creating a positive brave new world of possibility. Instead, it seems a lot of companies are simply emulating the arrogant stance of 80s big business.
I don't know why so many of you are looking for an official response from pg. Just because he invested in the company doesn't mean he can or will make statements on their behalf.
Honestly pg just probably invested, said good luck, and just went his own way checking up occasionally to chat. The guy has like 500 other things on his plate why would he micromanage airbnb?
It's their business, not pg's, so let them run it how they want to.
At the risk of revealing some intrinsic immorality or something, I don't really see what's wrong with this. It would be wrong of the sales team to claim to have used Airbnb for stays that never happened, or to invent false testimonials, but that's not the charge.
The allegation is that they emailed property owners and said, effectively, "Airbnb is great, you should use it" without saying how or why they came to hold that opinion. It's untruthful in the sense of not including the whole truth, but I'd put it decisively under naughty, not blackhat.
They 'illegally' spammed users for at least a year.
> 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. [0]
"I'm not a lawyer but I am an anti-spam expert.
They most certainly are illegal. They are unsolicited advertising (which is fine under CAN-SPAM, sadly), and contain none of the requirements of CAN-SPAM - a legitimate business address, and a clear unsubscribe link.
Just because they come from gmail accounts does not exempt AirBnB from the law." [1]
Immoral: not conforming to the patterns of conduct usually accepted or established as consistent with principles of personal and social ethics.
Typically, what is ethical is respecting the user wishes. If I say, "Don't contact me for commercial interest" (the checkbox when you post something on Craigslist) and you do so, I would say that doesn't conform to business ethics.
I'm not saying this was a good thing for AirBNB to do, but is violating the sanctity of the craigslist commercial checkbox the worst AirBNB has done? Sure, that's not a respectable way to do business, but we're not exactly talking about Enron or Bernie Madoff here.
The only reason anyone posts anything on Craigslist is to get emails for commercial interests. That's what classified ads are for. Because everyone posting apartments for rent is by definition looking to rent their apartment, I think it's well targeted enough that AirBnB would get a pass on cold emailing people if they were doing it in an ethical and upstanding way. It sounds like they weren't, but if they were then the 'one bite at the apple' law would be the governing ethical principle. (Of course the design of Craigslist makes following this rule impossible, but that's a separate issue.)
And just because something is legal, doesn't make it immoral. The law doesn't touch anything but the worst of the worst of spam.
To address your other post, I would assume that you're getting down-voted because you're playing devil's advocate by presenting that argument in a discussion of something that almost all of us would agree is immoral, regardless of legality.
>>
Airbnb does not publish the number of properties featured on the service but has confirmed today that it currently has around 110,000 listed -- around half of those on rival rental service HomeAway.
>>
Does that mean that half their rentals are not exclusive, and are listed on both,
or
Does that mean that they list half of their on HomeAway?
Well the valuation isn't for the number of listings alone. I would imagine (though I don't, in all honesty, know) that AirBnb has a far steeper upward trajectory than HomeAway at this point.
I'm pretty sure everyday rental companies (with real agents) in the Boston Area post fake apt listings on Craigslist to attract customers. Also I know for a fact that they harvest listings from Craigslist and rental sections of newspapers to call and email owners hounding them to list and show their apts. Whats the difference?
It sounds like if the industry isn't enforcing itself and operating out in the open, no one really cares. Also once these companies get their hands on you they make you sign contracts so that you can only exclusively list through them. Its a screwed up industry full of commission based workers.
>It sounds like if the industry isn't enforcing itself and operating out in the open, no one really cares.
Thats some very strange reasoning you're operating on there. The fact the industry isn't enforcing itself only suggests that people don't care enough about this to reach the tipping point at which the upset people involved start to negatively affect the business of the perpetrators to the extent that not engaging in the undesirable tactics would no longer be profitable. Most people do care, and do hate it, but renters have to deal with that world for very short and limited periods of time over the course of a year and can't afford to invest the kind of effort needed to affect change in an industry completely unrelated to them.
Its like you're saying no one cares about all the generic spam they get just because the 0.001% conversion rate spammers have make it a sustainable business model.
My point is they used tactics that most people in the industry have been using for years. People shouldn't be so outraged or shocked by it. Rogue agents is just a silly explanation.
Just like my direct mail campaign is not automated because when the letters come out of the printer/stuffer machine I still have to lick the envelopes.
Headlines that quote false statement should use quotation marks for clarity.
It is impossible to "admit" something that in one's self interest and is not a proven fact. A defendant in court can admit guilt, but can only claim innocence.
If this goes mainstream, I can imagine the hotel lobby trying to beat AirBnB over the head with this issue. Perhaps even doing their best to instigate legal action by the government for potential violations of the CAN-SPAM Act.
Doesn't "black hat" usually imply some kind of hackery or gaming of a system?
Assuming it was people sending the emails and not automated, I would probably classify this as deceptive cold calling. It's not something you'd want your own people doing, but you might just look the other way if some PR company is doing it on your behalf.
Morally, it's probably the equivalent of making a fake viral video.
'Rogue' sales team or not, it looks like they could be facing some hefty fines under the CAN-SPAM Act: "Each separate email in violation of the law is subject to penalties of up to $16,000 ... both the company whose product is promoted in the message and the company that originated the message may be legally responsible."
I applaud PG for showing incredible constraint on this issue, on this board. It's like a father standing firm alongside his guilty son, while tomatoes are being thrown on them, while the cowardly son keeps mumbling lies 'It wasn't me, my friends did it. I just watched', while the father just stands there and takes it.
False premise. It's not as if by killing the thread the issue would have been capped altogether, no, it would have instead exploded and done exponentially more damage with accusations of censorship mixed in.
Cue the speech by Al Pacio's character in "Scent of a Woman", with PG as the father standing beside Philip Seymour Hoffman's guilty-looking character ...
If you read through http://davegooden.com/2011/05/how-airbnb-became-a-billion-do... and look at the links delivered, they don't have any sort of affiliate IDs. Which means that Airbnb had no way to tie this traffic to that advertising campaign, and had no tracking.
It is possible that they legitimately were willing to pay a third party contractor something based on all of their traffic, no questions asked (I've seen that kind of deal with SEO companies before), but it seems odd.