Pop Quiz on the Airbnb Debacle

If you missed the whole Airbnb affair- (now referred to as #ransackgate), you should probably consider yourself lucky and should stop reading here. You probably don't rent your house out to perfect strangers too often so this piece of news passed you by somehow. Perhaps you were more focused on how the Syrian government just wiped-out 70+ civilians last night or how a nutjob in Norway savaged a similar number of people in a national tragedy. Maybe you're one of those people that knows there is a famine going on in Somalia even though it's not getting too much press.

Still here? Well- then you probably heard that a meth addict used an alias on Airbnb recently to rent a person named EJ's house while she was travelling and then proceeded to violate, steal, defile, destroy the victim's home. What happened to EJ's home is horrific and criminal. Anyone who's had something stolen from them has some sense of the outrage and sense of violation and pain that comes with this territory. The alleged offender is apparently in custody now and will hopefully be tried. If she is indeed found guilty- I hope she'll be convicted and jailed to the full extent of the law.

But we haven't heard much about this "alleged" low-life. Media coverage of the crime has instead focused either on Airbnb's alleged complicity in EJ's misfortune and/or their poor handling of the P/R aspects. The alleged felon who committed this odious crime is hardly mentioned. This is not surprising. Airbnb's success and billion dollar valuation make it a perfect target for this sort of criticism. 

Could and should the founders have handled the P/R aspects a lot better? Definitely! But who are we kidding- did they really have a chance?  The headlines here are simply tailor-made for generating eyeballs. I am not making these up:

Airbnb Pillage Victim Says Company Tried to Keep Her Quiet

A Billion Dollars Isn't Cool. You Know What's Cool? Basic Human Decency

The Airbnb Horror Story Continues

You read these headlines and it sounds like Airbnb is some kind of rich serial murderer on the loose- pillaging and laying waste to scores of innocent and kindly citizens in its path.

Much like the Craigslist imbroglio of past years, this entire Airbnb affair has again brought to the fore questions about where a company's responsibility (legal and ethical) to its customers' safety begins and ends. Rather than presenting a long opinion on the matter I've instead decided to ask some admittedly facetious questions. For the sake of brevity I've made them multiple choice.

When a car-maker manufactures a car what scenarios do they need to anticipate? For example, is it morally or ethically obligated to protect its customers against:

a) car-jacking attacks

b) hitch-hiking meth addicts that drivers pickup on the road and invite into their car 

c) damage caused by strangers to whom drivers lend or rent their car to for free or for a fee

d) none of the above (muttered under one's breath)

Should the car-maker be obligated to place disclaimers on the driving wheel of the car warning people that inviting strangers into their car out of the goodness of their hearts or for a fee comes w/certain risks?

a) yes- people are not intelligent enough to know this and need to be treated like children

b) yes- car-makers are greedy and want to save money. They should be monitoring all their drivers via video cameras and be able to intervene via installed speakerphones when their customers are making dubious choices

c) yes- we need to legislate this. I am calling my congressman

d) none of the above (accompanied by possible expletive)

Oh wait, carmakers are brick and mortar businesses. They don't count. What about if someone uses a fake LinkedIn Profile on the internet and invites me to become a connection with them because we share two business groups in common? Then that person wants to have coffee and they seem cool and I let them stay at my house while I am vacationing and they trash my house. Shouldn't LinkedIn vet these people? Wait- what if instead of trashing my house that person partners with me in a new business and then steals all the cash I put in the business bank account?

a) yes, LinkedIn sucks! They are too greedy and don't bother to vet people on their network.

b) yes, LinkedIn should actually pay for the damage to my house. Their business model doesn't really protect me enough. I thought this person was legit! I'm calling my lawyer. 

c) this is an outrage- the LinkedIn founders don't care about their customers. They've gone IPO and cashed out. I'm calling my congressman.

d) you know it by now :)

For Part 32 in in this Series, click here

A New Style of Russian Roulette

 

This is part of my ongoing Series on Entrepreneurial Culture and Venture Capital.

In the tech world there was of course Sergey and that little pet project of his (and Larry's) at Stanford we came to know as Google. Then there was Max and his partners- unfurling the behemoth of PayPal and then Slide.

In the fight game Andrei Arlovski appeared suddenly out of nowhere, shaking-up the heavyweight division in the UFC with some magnificent wins. But then came the ascent of the legendary fighter Fedor Emilianenko, also known as "The Last Emperor", who may be the greatest mixed martial artist the world has ever seen.

In boxing the amazing Klitschko brothers, Vladimir and Vitali, wear practically all the world's heavyweight championship belts between the two of them. Vitali also happens to hold a PhD and I am told both play a mean game of chess.

In high stakes poker Ivan Demidov exploded on the scene in 2008 making the final table at both the World Series of Poker and World Series of Poker Europe.

In chess the Russians have of course been absolutely dominant for almost a century. Kasparov went out on top as the world's #1 a few years ago, is running his own political movement, and now is throwing his support to his old nemisis, Karpov, in the latter's bid to become the new President of FIDE, the world chess federation.

Here in the US, the NBA has now cleared mega-billionaire Mikhail "The Giraffe" Prokhorov's purchase of the New Jersey Nets (not to mention the major stake in the Brooklyn arena in which they'll be playing). Any whiff of oligarchism is off the rose- this guy is 6'7", likes to jet-ski (check this out) and was wrongfully arrested a while ago in France for traveling with too many attractive women. They erroneously thought he was pimping. He was just living his life.

That brings us to the VC game where Yuri Milner and the boys at Digital Sky Technologies have made a huge splash. They swaggered in with some Goldman Sachs polish, rolled up in limos and started laying massive bets all over the table. Valuations were suddenly off the charts. Liquidation preferences? They thought you meant Stolichnaya. "No thanks, we'll just take common shares." Some players in the VC and PE community looked up bleary-eyed from the dingy tables they'd been playing all night and said, "what the f@#$ just happened?".  Meanwhile, entrepreneurs like the CEO of Groupon were quoted as saying:

"DST is just cool..... I think they're disrupting the entire late-stage investment business. They are good at identifying exceptional companies and getting behind them in a way that entrepreneurs want them to. They don't get all caught up in terms. They are very accommodating." (Source: Business Insider, SAI)

In startups there is of course the phenomenon of high-school drop-out Andrey Ternovskiy, who rolled-out Chatroulette from the cramped confines of a Soviet-era apartment in the outskirts of Moscow after being inspired by the movie Deer Hunter! He is young and raw and not into the usual niceties. Word on the street is that Fred Wilson pulled some strings with immigration to get him over here with a special Visa. Milner too sent a limo to pick the kid up, but the lad wasn't impressed. I hear he's been making the rounds in Cali and is speaking at TechCrunch Disrupt this week. Something tells me this is one savvy kid and he's here to stay.

It also seems to me that much like so many of his erstwhile countrymen, he's having the time of his life playing this new game- and playing it his own way...

На здоровье!