These kinds of things are very easy to call out in hindsight, so, I do sympathize with the investors at least a bit.
Based on a collection of screenshots I put together of Airbnb's homepage over time (using content from the Internet Archive) I wouldn't have invested either in early versions of Airbnb:
Fred Wilson got his email from PG, I believe, in January 2009 and if you look at the Airbnb homepage then - the site is no where near as promising as it is now.
Having not followed Airbnb very closely - I have no interest whatsoever in using the service either as a traveller or a host - your link clarified one thing that's always sort of bugged me.
I had never understood how "air" fit with B&B. It wasn't until I saw the original screenshot that I understood that it's "AirB & B" rather than "Air B&B".
This post isn't meant to call out poor judgement in VCs, but rather to encourage all the struggling founders out there who receive these emails on a daily basis.
As someone who spent more than a few years in sales, I was trained to take rejection as a positive. The more rejections you get, the closer you get to a sale. The only time you don't is when you stop looking for more clients.
It's all a numbers game. If you look at rejection as something that gets you closer to success, you'll be encouraged, instead of discouraged when you get these types of letters.
Investors aren't the only ones who missed out. I'm sure a lot of potential early employees did too based on the 2008 homepage design. I know I did. Joe asked me if I'd be interested in developing their iPhone app, but I rejected because I didn't see how they could take off when Couchsurfing was free. In retrospect I should have known they'd be successful no matter what they did. To this day Joe is the most passionate and charismatic person I've ever met. He was always into connecting people and building relationships. I first met him at Jelly, a coworking space he ran out of his San Francisco apartment. So great to see him achieving his mission at a large scale.
Firstly, what a great idea (startup timelines). FWIW, I love the wayback machine, and I probably use it 1-2 times per week.
The thing I took away from your timeline of airbnb was the same thing I think successful people try to explain time and time again, and it's the same lesson that makes the investors passing up airbnb seem more like a minor, unavoidable incident. The lesson is that a business or idea isn't a success until a team works mega hard at making it a success, and even then it has a huge chance of failing.
This lesson is made clear to me in part by the reminder that airbnb has been around since the first year after I learned to program, and that feels like an eternity ago. If I spent 3 years working on a brand with a good team and with VC backing, I'd expect to see some resemblance of success also, as long as the idea wasn't terrible. Hard work pays off, but it's easy to look back at these success stories as some sort of lottery winners.
The fundamental business model of Airbnb didn't change through all those homepage iterations—those were just redesigns of the exact same concept. In fact, for the time I think Airbnb's original designs were quite current.
its not like they pivoted... maybe the homepage pitch changes...
All this episode should highlight is that founders should not think that VC's have some sort of wisdom when they reject...
They follow only one wisdom and that is traction... if you got that and in huge spades, then everything can be explained in a wise manner.. and we will marvel at their wisdom.
How did other VC funded startup pages look? I don't think it looks particularly dated compared to its peers. This was the era of "web 2.0" which seems daft today.
>I wouldn't have invested either in early versions of Airbnb:
http://www.startuptimelines.org/startup-timelines/airbnb/
Fred Wilson got his email from PG, I believe, in January 2009 and if you look at the Airbnb homepage then - the site is no where near as promising as it is now.
I disagree somewhat. I think that is hindsight bias to relate the website's 2008 designs to cause&effect of VC decisions.
The April 2015 website designs looks "prettier" but as far as communicating to unknowing customers (and uninformed VCs) what Airbnb actually does, the "uglier" 2008 designs are actually better.
Notice that the 2008 designs have icons/pictures of an actual "bed" and a "breakfast". It's concrete visual communication. But the 2015 photos instead, show "people" in what I call "aspirational lifestyle" poses. It's abstract visual communication. (And I just took another quick look at airbnb.com today July 13 2015 and now the home page shows photos of "destinations" overlayed with city names in prominent white font. So now the page design taps into the romanticisms of the Condé Nast Traveler. The visual abstractions continue.)
I think it's fascinating the lifecycle of companies's visual style that transition from The Concrete --> The Abstract. The visuals including marketing, advertisements, and home webpage designs.
The concrete approach has to show the actual product. The abstract does not.
At this point, I think Airbnb can get away with abstract visuals because they are well-known enough now to not have to waste landing page pixels on an actual "bed" or "eggs & toast". That's what 7 years of penetrating the public consciousness allows you to do. These days, I would guess that the majority of visitors already know (by way of friends & family) what Airbnb does before they visit airbnb.com.
Therefore, if the company is a startup nobody knows, they must use concrete visuals. If a company is established and successful, they have the luxury of being abstract. I don't think tomorrow's YC2016 unknown company should base their website's information design based on airbnb's 2015 website. Instead, look at their 2008 designs even though they are uglier.
Other examples of companies doing abstract visuals:
Nike's "Just Do It" commercials often do not highlight any shoes in obvious ways and instead show sweaty people running or playing.[1] (If one didn't know Nike was a shoe and sports apparel company, one might think that commercial was about karate lessons.)
Viagra commercial don't show the actual pills but instead shows older couples holding hands walking the beach or a guy sailing a boat.[2] This is unlike many Tylenol pills commercials showing the actual pills.[3]
Even in the tech world has examples. Anyone remember the old IBM OS/2 Warp commercials in 1990s? The entire commercial was showing people's faces looking at a computer screen (presumably of OS/2). The camera didn't show what they were looking at -- therefore you saw no GUI demostrations. The camera also didn't show the software box. It was just a bunch of reaction shots of people's faces showing astonishment ("wow!", "cool!", etc). [4]
The abstract commmercials from Nike & IBM are not suitable for convincing investors who don't understand athletic shoes or operating system software. Likewise, the 2015 versions of airbnb.com showing abstract lifestyle photos are not useful for potential investors either.
Just curious to know how this could have been done better. Those who believe the design of 2008-09 Airbnb was not up to mark, mind explaining this to a guy with little UX design understanding.
funny how they started by returning results based on event searches and today they stopped supporting it. Now there are startups trying to do that same thing: https://www.stay22.com/ (disclaimer: my startup!)
That list of rejections was very, very unlike my experience trying to raise VC, which was more like 7-10 VC firms giving meaningless "yes, soon!" responses until we gave up.
They said "no" because they didn't want to waste time meeting with such an obviously unpromising startup :)
I was one of the angels who simply didn't respond, in part because I was busy with my own startup, but also because the idea of a marketplace for renting out air mattresses just didn't sound very appealing...
"How would I go about presenting my company in such a way that it'd seem so unpromising that only smart investors would give me the time of day?"
It feels like maybe there's an "uncanny valley" between "no plausible way this team is getting funded speculatively" and "no-brainer straight- to- partner- meeting".
Simple answer: Only take meetings with VC firms and angels who have direct experience in the area where your product helps the most.
I mentioned to you in a reply, below, that my marketing software company got immediate YESes from angels who had been leaders of marketing teams and intuitively understood the need for our software. I think my record time to close an angel was under 2 minutes. For those who had never led or been part of a marketing team, it was an uphill battle the entire way.
Once I learned that filter, I was able to raise money more quickly, with much higher close ratio.
I doubt it's possible. Keep in mind that nobody invested in AirBnb until YC, and as I understand it, they were mainly accepted based on the strength of the team.
I've pitched to 30+ investors and got rejected....a lot. Here's my generalized conclusion: VC funding is like dating. Easy money goes for the hot sexy blonde at the corner of the bar in the west village, but it doesn't mean the slightly less attractive brunette sitting in the corner isn't the best catch. No one would dare miss out hitting on the blonde, and no one is going to fault anyone for not hitting on the brunette "she's uninteresting". My only advice is to understand first what the investors' thesis is and play your pitch to those strengths. For example - what markets, what they look for in teams, and what their fund's goal is. I've had a fair share of VC's be brutally honest with me on the last point with an answer of "we need just one billion dollar business in order to return our fund, so we take as many bets as we can to ensure we get one".
There was no generalization made at all. He never made reference to gender of the person walking into the bar. It could have been a woman walking into a gay bar.
If you wanted to tie yourself in knots, you are succeeding.
The degradation that I saw was that, in the analogy, women are sexually objectified. Women appear in the story exclusively in a sexual context, where there is no good reason for that. The context makes it clear that this is normal and expected within the (male) OP's world.
"No one would dare miss out hitting on the blonde". There is a clear generalization here, that everyone should find blonde women most attractive, or at least be socially required to act as though they do. Perhaps women are also expected to find the blonde woman most attractive, or perhaps women's opinions aren't really worth considering.
You might re-examine your own gender and sexuality biases in this context.
>If you wanted to tie yourself in knots, you are succeeding.
I'm actually being sardonic. The political correctness police are a bit tiresome. My point is that, if one wishes, they can analyze any statement to be as sexist, racist, homophobic, etc... Including yours.
>The degradation that I saw was that, in the analogy, women are sexually objectified
If women are 'sexually objectified' by other women is it a problem?
Why did you overlook the completely racist message in his analogy? Assuming most men prefer blonds assumes white culture, which is racist since I doubt black and asian men feel the same. I don't know, maybe I'm racist for doubting that assumption?
Also if a character's gender isn't identified in a story, is it sexist to assume that character's gender is the same as the storyteller? I was guilty of that one too.
This where the P.C. police trip over their own logic and fall into the pile of B.S. they've created.
Complaints of color over content, sometimes color is part of the content. Sometimes civility of the response downplays the visceral nature of the reaction. I revile at it, the revulsion needs to be expressed. My four words expressed my sentiments in the most correct and compact manner.
It's interesting to me that VC's would look at this and not immediately think of an easier to monetize version of couchsurfing, which was already very popular at the time.
It's likely that Paul Graham directly and enthusiastically introduced them to the VCs, which obliged them to respond with a semi-coherent rejection. That's what the Fred Wilson rejection was like anyway: http://www.paulgraham.com/airbnb.html
You're right. That makes a lot more sense, especially the $1.5M valuation. I missed the first line about Michael Siebel introducing them. Given his YC affiliation, it probably had a similar effect.
I think that's also wrong. Michael wasn't a YC partner at the time; he joined Justin.tv as CEO after Justin and Emmett got into YC again after selling their calendar app to Tucows or similar on eBay.
This is probably the safest way to reject someone seeing that 4 of them used the exact same response as well as your music business investors. I hear this line all the time.
To be fair, I guess making huge returns is not their prime policy or maybe their investors have a policy against certain investments due to moral or some esoteric reasons.
The VCs we talked to weren't not rejecting us so they could save our feelings. They were doing it because we were offering them a free option on our business.
A common-enough rhetoric in discussion with folks from VCs does definitely seem to involve the 'areas they are currently interested in'. A sibling comment to mine bears this out slightly with the 'security is not our sweet spot' response.
You cite esoterica, but perhaps investors just feel more comfortable with certain areas - or ones they have the in-house experience to evaluate properly - or that are easier for junior partners to sell to the folks higher-up?
I don't know much about VC but I thought taking risks was the name of the game? Isn't that what "venture" in VC mean?
I'd understand if this was Ontario Teachers Pension Fund or something like that where a large amount of capital had to move around to generate some sizable returns. Even these money managers are scrutinized for bad decisions.
The whole 'not our area of focus' seems to be the same line mutual fund managers use during report card season by writing off bad picks and claiming they beat the market.
I'm passing on rather than defending their behaviour.
Having said that, there's perhaps something to be said for picking one's battles?
Indiscriminately attempting to capitalise on any lucrative opportunity seems like a common road to ruin (feature creep, startups that put everything in scope, https://xkcd.com/793/).
While that makes sense for established markets like the stock market, I don't think the same can be applied to the early stage tech market or reading into fundamentals. Certainly trying to capture all opportunity in the stock market can lead to mediocrity (over diversification) but when one bet can produce returns that more than makes up for all the other tiny bets, hard to fathom why that isn't a much more attractive strategy.
For example, make 1% stake bets stretched across 100 startups vs 20% stake bets stretched across only 5 startups I "understand" or feel comfortable with. Isn't the risk inherently bigger if you chose the latter? If one of those 100 startups end up producing low to mid 5 digit ROI, shouldn't that cover for the 99 other bad bets? The probability increases since you are not introducing any personal biases and exposed to more upside potentials.
Last time I checked the name of the game was making more than 100 times the amount invested in less than 5 years - taking risks is a unavoidable side effect.
One of the frustrating things about early-stage in my experience is that there is little correlation between VC and market interest; our experience (also cybersecurity) has been that we're generating a significant amount of interest from (now) customers and prospects, but VCs tend to say either "we just can't get to conviction, not sure why" or "you're amazing, everything makes sense, but security isn't our sweet spot".
So far, angel investors have been much easier to work with, although admittedly we chose to focus on customer growth once we had that first round of disappointing VC results.
I think, per the other comments, your background makes a difference (assuming you're talking post-Matasano) in how the message was delivered.
I think a lot of VCs explicitly (or at least implicitly) prescribe to Warren Buffet's advice of only investing in things they understand. So if you talk to a VC focused on security, they're much more likely to invest than a VC who is kind of interested in security but has never invested in it. That VC, in turn, is more likely to invest than someone who is not particularly interested in security. If an investor really likes marketplaces or security companies or B2B SaaS or whatever, there are enough great companies in each of those segments to make it okay to ignore the other segments.
It's also valuable to remember that partners at larger VC firms often lead 1-2 investments per year. Their performance is determined by the 3-5 decisions they make during a VC fund's life. It's hard to stake 20% of your performance on something you feel like you don't fully understand.
Angels and smaller seed funds are sometimes easier to work with because the former are motivated by more than financial returns and don't have their salaries/jobs at stake with each decision, while the latter make a lot more investments per partner.
> I think a lot of VCs explicitly (or at least implicitly) prescribe
> to Warren Buffet's advice of only investing in things they
> understand.
This is very very true.
And entrepreneurs MUST not take money from VCs who do not understand the market. Sadly sometimes VCs think they do know but they actually don't know what they don't know.
The worst marriage is when both entrepreneur and investor don't know what they don't know.
Agreed on all points, and thanks for weighing in from the VC side of the table.
For clarity's sake, I've sat on tremendously effective boards at the companies I have either run or had a senior role at, and I think there's incredible value to be had from a good VC relationship. The economic realities of raising can be frustrating, but it's a reflection on the industry rather than the individuals, I believe.
Early stage investment is just plain hard, and I think your point about the quantity of deals led is key.
Just a question: How do you expect to create new markets or any kind of real innovation if you only invest in companies whose products are similar to something you already worked with?
Maybe it's a goof thing angels are doing bigger rounds taking your place.
I'm an early stage VC, so I often invest at the same time as angel investors. I think there are shortcuts to getting an investment even if you are approaching a new market. Sometimes that means showing enough promise with an MVP (which often doesn't require much capital). Sometimes it's having an amazing team -- for example, a lot of early PayPal folks could probably raise money with just about any reasonable-sounding idea.
Also, investors typically invest in areas that they're familiar with, but that can be a pretty inclusive criterion. For example, I've personally worked on payment fraud detection before (as an engineer), so that makes me feel comfortable investing in fraud detection, but also credit assessment (similar algorithms), a large number of startups that involve lending or payments, and so on. For another example, my fund invested in Flexport (a recent YC company that handles shipping logistics for companies). My partners and I didn't have any personal logistics experience, BUT one of my partners worked at a company that struggled with imports and shipping, so he appreciated the pain point. Also, Flexport's CEO, Ryan, is a force of nature and had been working in the import/export space for 15 years, so he was very credible. That was enough for us to invest despite not having logistics experiences ourselves.
In the Airbnb example -- and I wasn't an investor 6 years ago so I don't know what their pitch was like -- I'm guessing if the founders had a bunch of lodging-related experience, or if they had previously built great companies, or if they had a few more data points that showed the viability of their model, that could've helped.
Finally, here's the challenge from an investor's point of view: you see 1500 pitches per year. The majority of the pitches mention something like "we're going to be a billion dollar company" or "we're going to create an entire new market." One or two of those 1500 companies will do just that, ten or twenty companies will get kind of close, and the other 99% won't be close at all. In hindsight, it's easy to look at Airbnb or Uber and think that investors were short-sighted. Maybe they were. But a lot of early stage companies look simultaneously promising and risky in their early days, and most of them fail, so investors understandable err on the side of pessimism.
Thanks for your point of view - that actually makes a lot of sense.
I really dislike the escalation of pitches. As you said, almost everyone says that 'we will become a billion dollar company' or similar claptrap - but that just means that people have to make more and more extraordinary claims to pierce the cynicism (fully justified!) of investors.
My post turned up to be too confrontational, sorry for that.
I'm not opposed to VCs on abstract, and I'm happy to see people trying to do good work on the area. Your area is hard, and if you can improve it, everybody wins.
I also got widely off-topic, because I was complaining that todays VC wouldn't have created the Silicon Valley, not that they couldn't see Air B&B. That said, I'm still not convinced you are liberal enough to do this. (Not that you should.)
Just from an investor/trader point of view, it's shocking that they would even subscribe to Buffet's style of investing which is suitable for non-tech stocks. There is a great deal of false confidence in an unusually high risk high rewards investment. Rather, wouldn't it make more sense to make optimize tiny bets on as much startups regardless of the industry? At the end of the day, it's not much different than investing in penny stocks or early stage mining companies, I'd find it hard to justify investing so few.
I'd subscribe to Taleb's black swan model, except the complete opposite of what he did which was making small bets that market would crash.
Capture unexpected, phenomenal returns without introducing any personal beliefs or bias and making equally sized small bets across as many startups as possible. If you can get like 60,000% ROI then the model becomes sustainable, unlimited upward potential with a limited and tiny risk.
if you make too many bets you'll dilute your edge. if you make too few bets then you are exposed to too much idiosyncratic risk. so people have to find the right balance
In a market where you just need one winner, being overdiversified argument is invalid be cause you are not optimizing for total portfolio return, you want to maximize opportunity and upwards exposure while keeping each downside risk limited. If you make too few bets the numbers are against you. Now this is nothing like spray and pray, you are still dealing with people, at the minimum you need to deal with founders who can be trusted.
It couldn't be worse than allocating a quarter into one company that goes under at such an early stage. the tremendous return comes when others begin buying into it, at worst case, the founder doesn't generate more money than you put in which in this case is very tiny but the equity is still sizable that the next guy paying 10x what you paid and even ipo would have exponential yield. You don't even need to focus on the startup doing well if enough series of investors are willing to buy your shares out. I reminds me of pump and dump which is why I think the latter is unethical but it's unregulated and private market, not exactly the type of people that would go homeless if the start up did go under like when Enron wiped a lot of working ordinary people's pensions.
"which was more like 7-10 VC firms giving meaningless "yes, soon!""
In theory by doing that they were raising the potential price for those that would end up investing. Their competitors. If you felt you had "plan b's" you'd be less likely to lower your expectations on value than you would be if you had 7 firm rejections. 7 firm rejection might mean "take what we can get".
Here is an example using car buying.
If a car is sitting on the lot and has nobody expressing any interest the dealer may possibly want to unload the car and take whatever he can get. Otoh if the dealer feels that he has 2 or 3 people interested in the same car he will then be less likely to take a "short" deal from the 4th person who walks into the dealership. He will feel there is potential and it is worth the gamble to wait feeling he has a few plan b's.
(Forget for a second whether this actually happens with car dealers I am only trying to illustrate the theory of what I call "feeling fat" which I have seen many times in business).
Of course as a group it's hard to explain why all participants would act this way or that this even happens. However I don't feel individually they are disadvantaged by this behavior at all. While there might be a reputation disadvantage to stringing someone along unless they are absolutely sure they will not invest why not string someone along?
You're kind of famous and people aren't going to want to say no to you but at the same time probably fail to execute. There's zero hesitation when it comes to shooting down small fries from my experience (I'm an employee at my 3rd ycombinator startup now). I remember Airbnb when it was tiny, back in 2009/2010, they were small like the rest of us once.
You might be surprised on that. I got many of the same style of rejections you did. I got very few clear-cut "No"s and lots of "We like what you're doing and it makes sense, but we need a bit more time." Which is the most frustrating form of "No", as I suspect you know.
My guess as to what made us different than Airbnb circa 2008--maybe some of these apply to you, too:
1) Founder with previous exit/acquisition in the tech space
2) Product had some traction (paying customers, including a F500 company)
3) Product was in a domain that most VC's/angels didn't have experience with (in my case, software designed for marketing teams) -- some were nice enough to outright reject us based on the fact that they had never been in marketing; the people who had previously been in marketing almost immediately saw the need and said "YES" right away; many of them saw that we had traction but felt like they needed to understand the market better to see what we were seeing, so to speak.
Maybe because the investors were 100% sure they wouldn't invest. In other words they find it easier to send out a response when a dossier is the "definite pass" pile ?
On Dec 13th, 2012, I wrote the following email to you, after having applied for a “Head of Community” position at AirBnB. I didn’t get any reply either.
Note that I cannot claim I became the big success that AirBnB has after these “rejections”, but it still surprises me that you or your org didn’t even wanted to talk to a Technology Evangelist from AWS.
I guess you did a similar type of mistake with me.
"Hi Brian,
I know you’re busy, therefore I’ll keep it short.
My name is Simone, I work in San Francisco for Amazon Web Services, and I’m interested in becoming the Global Head of Community at Airbnb.
I think I have what it takes to be successful in that role, and I’m a big fan of Airbnb.
Let me know if we can discuss, or if you want more details.
There are many potential reasons you didn't get a response, but I want to highlight one in particular:
There was no value proposition in this email. For an email like this to be worth responding to, you have to provide a brief, no BS, explanation as to what compelling value you're bringing to the table. The only exception to this rule is if you're famous for your accomplishments in that specific role (in which case, they're probably pitching you already anyway).
Finally, nobody owes anyone a response to a cold-call email. Especially not people that get hundreds if not thousands of emails a day. Don't take it personally.
You were sorta putting your situation on a par with investors missing out on investing in the early stages of a company now worth $24bn. That is to say, them not paying attention to you is equivalent to missing out on an absolutely mind boggling amazing opportunity (in hindsight).
Now, you might truly be as awesome as that but people tend to vote down comments where people are blowing their own trumpets, for better or worse.
Seems like an ugly, passive aggressive trash talk of Simone. The whole point is that they don't know what value he can bring. I hope he does something totally awesome just to show this comment up. :P
Your inference is incorrect. I don't know them and have no reason to judge them.
They said "I'm honestly curious on why [the comment was downvoted]". I conjectured the original heavily downvoted comment may have been interpreted as boastful through comparison of a personal situation to AirBnB's and that's why people may have voted it down. I received 17 upvotes for this speculation which may (or may not) support my hunch.
May Simone, and everyone, do "something awesome." But not merely, as you, passive aggressively (and quite needlessly) conclude, to "show" anything up.
I was not passive aggressive. I call that actively aggressive. Because you were using vague indirect statements to say that this guy is worthless. I openly described it as such.
I don't know Simone either, but I'd say there's a fair chance he can contribute more than some illegal hotel scheme. I was pretty disgusted that you value this hype above a human being, and I don't care what 17 other similarly amoral individuals may have said.
The problem is you've addressed your post to Brian, complaining about the fact that you cold-emailed him in 2012 about a job opportunity and never heard back. First, the advice from the article would be to keep trying and not get discouraged, so his non-response is not in any way hypocritical. Second, if you really wanted the job, what were you doing sending an email anyway? Go and talk to the man and take it as far as sleeping outside his door so you can pounce on him if he absolutely won't respond to you. I believe that some persistent phone calls would have at least gotten you coffee.
So, you've got some hurt feelings (this is understandable, nobody likes being ignored), your post sounds a bit like sour grapes, it's only tangentially related to the article, and that's probably why people downvoted you. What's the point of trying to embarrass the guy here? It just looks bad for you, I would just delete everything honestly.
You got a point.
I actually tried with him, with Joe, and with the recruiter - multiple times. I didn't insist as much as you suggest, perhaps due to the fact that my Visa back then (L1) didn't allow me to work for them in the US, and my green card was still several months away.
It sounds like a frustrating situation. If you still want a position, keep on trying to get through to them. Worst case you get to a definitive no and then you can drop it.
1) It's not related to the topic.
2) You're using a forum for discussing the topic to force a response from Airbnb regarding an interaction that should only be taking place between you and Airbnb
I don't think that's quite applicable in this case, as getting a business funded is a far cry from winning the lottery -- plenty of people frequenting this site were able to obtain funding under similar circumstances (a lot of rejections amidst a couple yes's).
The reason this is the exact opposite of winning the lottery, is that the lottery is the equivalent of saying, "Please, a higher power, change my life by granting me all that I want.", whereas someone getting their company funded is more akin to saying, "I want to take full responsibility for the failures and successes of my own life, and to even become responsible for the livelihood of others.".
In short, they are worlds apart as far as mentality goes. Regardless of the success of the company after the funding, going forward with a company in the face of such utter rejection by those who the author viewed as "smart people" takes a mentality that is shared by pretty much all of those who have achieved similar success.
arikrak is saying that it's "this startup became a billion-dollar concern" that's winning the lottery, not the funding step. The funding step is analagous to buying the lottery ticket.
In clearer words, it's confirmation bias: there are thousands of ideas and startups pursuing them. Most fail, some succeed, a rare few become AirBnB gorillas.
Or maybe the "smart people" are exactly that and that's as far as they will go as we've seen throughout history when smart people get together decisions become more about maintaining ones ego rather than actual results. Taleb terms so called smart people as "empty suits". 50 cent is a successful venture capitalist, but do people picture him first when they think smart people?
A lottery has a fixed set of rules, and in terms of game design they do design it where you can win every so often but being a fixed game the odds are against you (like a casino). And part of this is also that a lottery is a game of chance, not a game of skill.
Pitching for VC or angel investment is not a fixed game with a set of pre-determned rules, and also does involve skill. So I would say that it's not really the same as buying lottery tickets. Also unlike a lottery where you have an even playing field there are people who do have advantages (friends with wealth, a good network, track record, etc.)
Now are the odds against you? Of course! In fact you can still raise VC or angel money and still go under, and in fact most will. But in a broader sense the same rules apply to starting any sort of business if you think about it.
Note: My point isn't that startup success is pure luck, just that the likelihood of becoming a huge success is very small. People always focus on these 1-in-a-million success stories, but it may be a good idea to realistically reflect on your odds.
(Becoming a very successful startup founder can be better compared to becoming a famous actor or athlete. A successful athlete may also tell students "don't give up, I succeeded", but that doesn't make it good career advice for most people.)
You could also make that statement about anyone who had been successful in any way. Calling any level of success "luck of the draw" seems to be an awful way to look at things.
Reminds me of Stephen King's rejection slips: "By the time I was fourteen the nail in my wall would no longer support the weight of the rejection slips impaled upon it. I replaced the nail with a spike and went on writing.”
Like Guy Kawasaki once said, "Don´t Let The Bozos Grind You Down".
With Stephen King (or any book author) it's a little different. It's not like they get rejected and keep selling that one book they just wrote. Most authors write bad books when they are starting, they get rejected and they continue to write more books, usually better books.
"It's not like they get rejected and keep selling that one book they just wrote." (1) just because you're selling doesn't mean you're making profit. (2) Airbnb wasn't profitable when they were getting rejected, so in a sense "they kept writing". Hell, they even sold cereal boxes to stay afloat before Ycombinator picked them up! https://www.airbnb.com/obamaos
I think "bozo" is too harsh. It's hard to predict what books will be bestsellers and what startups will reach $1B valuation. Arguably, traditional publishers and VCs have to say "no" most of the time. Maybe Kawasaki's quip had a context that made it more palatable, though.
These rejections are a testament to why you shouldn't give up just because smart people give you a hard "no", but also why storytelling is so important. These investors clearly did not understand Airbnb, and I think the Airbnb guys would admit that's in large part because they did a bad job explaining it.
Explaining why something that is small today could some day be huge is so hard.
To be fair, their original idea was to rent out a couch for people to crash on, much like couchsurfing. I don't know if even Chesky imagined it would grow to it's current state. Uber was similarly silly when it started: expensive limos on-demand for rich guys in SF. Investing at this stage is just like signing a new band, it's just a lottery ticket.
I think it's quite possible that AirBnB themselves didn't get the "AriBnB story." I don't know though.
To really compress (and make assumptions) I think they went from a sort of "coach surfing for fun and profit" to "holiday rentals" as their central point. They still do the full spectrum, but I think the Air mattress end is pretty small now.
I think the take aways for trying to pick winners are:
(1) Execution and steering the ship are everything. They were not the first startup to try this sort of thing. The idea itself was a dime a dozen, like many others. App for calling taxis. Classifieds. Restaurant reviews. Online profile. Video sharing site. These are all pretty banal ideas. Lots of attempts were made at all of them. Picking winners is about picking a winner, not picking the race.
(2) Try to see "markets" as their full spectrum. High end, low end. Business, consumer. Freaks, mainstream. Coach surfing is a different place on the same spectrum as Hilton. Startups often move up and down spectrums much more easily than mature companies. Tesla could make a budget car next. Jaguar can't. AirBnB can handle mansion rentals for billionaires. Grindr could probably pivot to over 50s Catholic matchmaking easier than one might think.
They definitely didn't see their own story at the time, see my comment at the deepest nesting of the thread. Totally agree. Also agree that execution and actually building a great business is the most important thing and if you survive long enough to be able to do that and you're good at it, you'll win.
The problem is, and the reason VC's need to consider the quality of storyteller you are, is for a business that plans to be capitalized over several rounds, it's a fundamental risk not to have somebody on your team that can tell that story. Secondly, you're going to have to tell stories to your TEAM (internally) and the world (externally/marketing) that will have a huge impact on the future of your company as well. So it matters.
It turns out, Brian especially at Airbnb is a natural story teller, he basically can not stop telling stories when he speaks publicly and they're all good. They just didn't know what story to tell yet :)
> Explaining why something that is small today could some day be huge is so hard.
Actually, seems to be very easy to some people. And quite funny, often those people are not very good at executing business so it will never be actually huge. But they are good at explaining.
The conclusion from putting the two together is "when you get hard nos from smart people, if you're still compelled by your mission, keep going and work on either changing your story or telling it better".
If that's the case, the backstory to Airbnb indicates to me that around this time they had still not adequately figured out how to tell their story in such a way where it seemed like a big deal. At the time I believe, it was about:
- People having strangers stay on air beds in your homes, while you were there, and then serving them breakfast in the morning
- It was ONLY targeted at conferences where people would become so desperate for space that they'd stay anywhere (that's how the company got started - big design conference in SF. Here you can see they were focusing on the DNC and RNC).
This is a really implausible idea for one, a really small market (constrained by hosts but also conferences that fit the criteria) for two, etc.
What the story became when they broke through was about turning the excess living inventory hundreds of millions of people have into a place for people to stay. This has benefits for both sides it turns out and is widely applicable and massively scalable.
Those are really, really different stories. Like, startling different. But if you can't not only tell the second one but also show some evidence that it could be so, your stuck with the shitty first story. When they started seeing the behavior during YC that pointed them to the second story, they focused the company on it which caused it to grow, investors better understood the potential, and slowly over time it became trivially easy for them to raise money.
Much like tech hiring, investors prefer to optimize for false negative over false positives. Especially because the power dynamic is still skewed in their way, which allows them to say things like "call us back when you get to a series A" - none of the risk, all of the upside. Kind of like that girl who rejected me in high school but said "if in 10 years we both haven't found someone, maybe we can get together".
How does "call us back when you get to series A" entail "none of the risk, all of the upside"? The risk is that the fund has to pay a higher valuation for the same company, they might not callback, etc. and the upside is that you're...not taking on the risk right now?
Secondly, for tech hiring, a few bad hires can ruin a company. But, angel investors and small funds generally invest in a wide range of startups knowing full-well that most of them won't succeed. But, one success is all that's needed to 10x the value of the fund. Given the payout probability and payout value of startups, it's a pretty different game from tech hiring.
Extremely inefficient markets. Traditionally, VCs have been able to collude together to prevent startups from increasing in valuation "too fast". Unlike more efficient and less manipulated markets, which tend move in fast discontinuous jumps, VCs have been able to slow the top-performing companies to a slower exponential curve.
Because they've typically been able to slow this curve, waiting until the next round usually hasn't caused them to lose nearly as much upside loss as it would, were the market more efficient.
With IPOs being pushed back, and more sophisticated IB investors moving into much earlier rounds now though, this is finally starting to change.
Keep this in mind whenever you hear VCs shouting "bubble", just because some top startups aren't following the smooth exponential curve in valuations, that any competent trader or economist could tell you should never exist in an efficient market.
Yeah that one really irked me. Hey, call us when you are a billionaire and we'll talk about investing. Yeah I'll marry you when it's in the prenup.
I'd immediately pull out my funds as an investor out if I found out the names of the people writing these rejection letters. It would also be bad for street cred. "hey these guys missed out on the deal of the century, who else did they reject?"
150k is like peanuts to these firms with millions of dollars to throw. Hell, I'd bought out of the money put options near expiry if it meant there was a slight chance it would have potentially unlimited returns.
> hey these guys missed out on the deal of the century
When you figure out how to determine that before the fact I'm sure there are plenty of VC firms who would love to hire you.
> who else did they reject?
They rejected countless startups that have since failed (and surely some other that have succeeded). VCs are human, you can't expect them to have the clairvoyance required to only invest in eventually successful companies and only turn down eventual failures.
>When you figure out how to determine that before the fact I'm sure there are plenty of VC firms who would love to hire you.
My email is in my profile (if anyone wants to hire me). I've described a strategy that involves making small bets across large number of startups and not focusing on making judgements or even attempting to figure out how much this startup is going to be worth (as you say VC are human, why introduce that inherent bias to a numbers game?) because like we witnessed with the guys who rejected Airbnb, their own bias towards safety incurred a huge opportunity cost.
> They rejected countless startups that have since failed (and surely some other that have succeeded). VCs are human, you can't expect them to have the clairvoyance required to only invest in eventually successful companies and only turn down eventual failures.
Exactly, which is why I feel like they should ignore their own instincts and thought processes. Even if they were able to land a few successful ones, how can we be certain that it was not the work of dice rolling? Studies show that most money managers perform no better than buying the index or throwing darts, what makes you think VC's suddenly have improved odds?
If that's what you got then no, I think you should check with your local donation institutions because I'm not running a charity. Another red flag actually, because I checked my email and I didn't find a business plan in my inbox and 2 hours has passed. If you were serious I would've read it and rejected you because the first thing I would do is not read the business plan but talk about your experience and see if you have a history of being non punctual or any thing that would suggest dishonesty.
I think you are reading too much into it. Different investment funds, angels, syndicates have vastly differing strategies, goals, and funds available.
A smaller fund might invest across a series of funds, but not have deep enough pockets to follow the money even if they have pro rata rights. In comes the larger investment firm with lower risk tolerance (potentially) for the series A. Win win win.
No you are right about that. I was a bit overdramatic but I'm skeptical when a vc can say oh we don't do travels or hey just not really our specialty be cause there's no way that all 7 of them would have the exact same policy. Some hedge funds,or pension fund has one clear strategy they are legally bound to but all 7 vc in this case displayed the same response or none at all. Clearly there was someone that did end up investing in them and to be fair if they didn't respond it doesn't mean anything. They could've been just very busy or slow at typing emails, just follow up until they reply with a yes or no.
Sure, except there are thousands of companies out there asking for that firm's 150k, each year. They can't spray and pray, they have to at least find a reason to believe their decision is based on sound logic, otherwise they might as well make themselves self-service.
If there's an airbnb in there then I think it's worth betting more. 15 million spread across 100 startups, is that too much? I expect most to fail but the point is I have limited downside risk for unlimited return. the overdiversification argument is moot here because you are not optimizing for total portfolio return but maximizing your exposure to upside. Who says you have to do it all in one go? Keep moving and make bite sized bets but not being married to your ideas. Also how can you be sure that your sound logic isn't going to hurt you in the end like those guys writing rejection letters? I'm sure they have done,some introspection.
And like that guy who said he's going to see nd me a business plan in an hour, I've yet to hear from. One clear distinction is that I am also investing in the person, and if they can't hold up their end or if they think it's an easy way to swindle a years salary they are fucked in the head. I'm here to make bets not run a fucking charity, excuse ma francais.
The only thing to be warned about here is the blowback effect. This is a form of confirmation bias, whereby the victim uses rejection as a means of confirmation.
I was curious to what he meant by the blowback effect, and so my googling eventually led me to The Backfire Effect[1] which is when "in the face of contradictory evidence, established beliefs do not change but actually get stronger".
I don't really see that applying in the sense of obtaining venture capital, as it is well known that you aren't going to immediately walk in to an office and hand them a check for the valuation you asked for. It's going to take a bunch of both hard and soft rejections, but a person isn't usually going to be in that room pitching to these VCs if they don't already strongly believe that their startup is fundable.
This pertains to the conclusion (and thus the premise) of the blog post:
"Next time you have an idea and it gets rejected, I want you to think of these emails."
The message in my comment is, don't allow yourself to fall pray to the backfire effect when people reject your ideas (whether VC, colleagues, etc.). If people reject your idea, it might mean it's not a very valuable idea, as opposed to being an indication that you're on to something that's so radically new and different, etc.
"It's not in one of our prime 5 markets...you would be better without us...but Hey call us when you're doing your series A".
This ranks just below my favorite answer:
"We love that you have 1M users, but we need to see 10M before an A round. (Month passes). Oh, really 10M users that's great but we like to see 50m before doing A rounds now. Come back later!"
Of course, you won't need this chump change fund's money when you reach that point.
> Airbnb is an example of a company that is nothing more than just a brand, because anybody can build a booking website in a matter of a few weeks.
Many people have, and some (Roomorama, FlipKey) are reasonably successful. Heck, there's entire sub-sector of vacation home rentals (HomeAway, VayCayHero) that has publicly traded companies operating in it.
The problem with two-side marketplace is the trust. Bait-and-switch and similar scams have plagued marketplaces like CraigsList. You arrive at a place, and it's not what the photos look like. You make a reservation, and are told at the last minute that it got "flooded" a night before, and now the host gives you an option to switch to an inferior place or pay up more for a better-looking option. You arrive and find out the place is not for rent, and the photos have been taken by some scammer who thrives on taking small deposits and just repurposes same photos across multiple sites. Then it degrades into horrors like this one http://www.dailymail.co.uk/news/article-1205794/Rape-horror-...
Building a trust network and keeping a reasonably clean two-side marketplace is very hard, and is a major asset.
I can sympathize with the point you are making. No one can really predict the future, so your opinion may be vindicated. Google beat out every search engine, so who knows.
However, a few counter-points:
1) Brand value is critical. Look at Coke and Pepsi. Anyone can create a cola competitor, but no one can conceivably do better than these two. On internet properties, brand value is still important. Look at Priceline.com and Expedia. They still worth billions.
2) AirBnB has operational expertise that no one else has, in large part because they've been solving this problem w/ more funds and more man-hours than all of their competitors combined. More operational expertise = better service = beats out competition.
3) AirBnB is capitalized enough to buy out start-up competitors. Right now, most investors doubt someone can take on AirBnB. As such, most investors will push founders to go for an exit whenever possible.
You've got it exactly backwards. The brand is the least valuable part of Airbnb.
The most valuable thing about AirBnb is the market capture. You can no longer easily compete with them because of the network effect that is now in place. Brand is irrelevant by comparison.
The competitive game is over, because they've taken the market. They were able to build from the ground up. To do what they did, now you have to take listings away from them, which you won't be able to do because of the reinforcing network effects, such as the listings, ratings, users, trust, etc.
They could change their name tomorrow morning, and it will not matter. They have captured 1.5 million listings, the owners, the user accounts, the ratings, etc. The only way to lose that, is to screw up the operational business (primarily either by really upsetting owners, or by missing a huge technology shift).
Well, building that brand was part of the work, which you call "gambling". The technical side clearly can build innovation, but that's not even close all you need to have a successful startup. You suggest "building the website in a few weeks", so then you should measure how long it will take you to have people paying to use your site and scaling this globally.
It's also a two-sided market. A new competitor would need to solve the chicken-and-egg problem. The argument about it being easy to clone could be applied to almost any website.
> We were attempting to raise $150,000 at a $1.5M valuation. That means for $150,000 you could have bought 10% of Airbnb.
This is completely off-topic but since the $150,000 is going back to the business, wouldn't that mean that the valuation becomes $1.65M? The word "bought" makes it sound like someone is taking the money and selling their share.
You know, I originally had a hard answer and edited it away because I think OP is ambiguous.
>for $150,000 you could have bought 10% of Airbnb.
Does that mean for $150K I can buy as many shares as constitute 10% of the current outstanding number? Or that after I pay $150K, I will own 10%?
Since new shares are issued, in the former case I end up with 9.0909...% (1/11th) of the company. That gives us a post-money valuation of... $1.65M! (and $1.5M pre-money) But in the more probable reading of the phrase, I own 10% of the post-money $1.5M company, giving us $1.35M pre-money.
So, your choice. Someone more in the VC loop might be able to say that the phrasing definitely means one or the other; I've just got the math.
You're missing the nuance of the question. If Airbnb is worth 1.5 million before selling 10% for 150k then after the sale they are still worth 1.5M they were valued at before the sale, but also have an additional 150k in the bank which should add another 150k to their valuation.
(ergo the pre/post money valuation thing linked above)
But wait - You're leaving out the company's loss of 10% of its equity as part of the investment transaction.
The company's equity was worth $1500K before the investment.
After the investment, the company had $1350K of equity left because it sold 10% of itself, and it no longer owned that chunk of equity.
However, it had $150K of cash that its equity investor paid for 10% of the company's equity. So $1350K of remaining equity + $150K cash = $1500K company value. Same as pre-investment valuation.
It looks like the company's total value didn't change, it just traded 10% of its value for cash. Which is the point of selling equity - cash allows a company to pay for people and things. Equity doesn't.
But wait - You're leaving out the company's loss of 10% of its equity as part of the investment transaction.
A "company" can't lose equity it never owned any to begin with. The equity was transferred from one party (usually the founders) to another entity in exchange for cash.
After the investment, the company had $1350K of equity left because it sold 10% of itself, and it no longer owned that chunk of equity.
It looked like an awesome team, but investors didn't see the opportunity. I read that one fund (I think USV) took the miss as a lesson not to base investment decisions on whether their partners would use a particular service. The consuming proclivities of 50-year-old millionaires not being indicative of a larger market. Seems terribly sloppy as an investor (or prospective employee, for that matter) to be influenced by such a personal bias. But maybe the founders didn't fully expect such an amazing success, either?
In general you have to use your own life experiences to make investments.
It's nice to think that you could put yourself in someone else's shoes well enough to make stock purchases based on what you think they will want, but investors learn very quickly that that doesn't actually work. "Buy what you know."
It means there are great opportunities for people who are a minority in the investment world -- like ladies.
Look at ETSY stock right now. It's insanely cheap I believe (at 1.771B valuation). Despite being cultishly popular with 20-something women, who will soon be entering the demographic that spends the most, it's been crashing through the floor. A male-led investment world is not putting their money there. Ask any young lady what they think of Etsy and you'll see why that's dumb.
In 2008, when Starbucks was priced at $3.42 a share, asking any woman what business they think will grow in popularity would have elicited the reply of "Starbucks, duh", but investors didn't see the opportunity. In 2009, Lululemon was priced at $2.25 a share.
It's a good thing for minority investors. They just need to get in the buying market, and take some risks.
Buy what you know is certainly a good heuristic. If I were a partner at a fund that invests in Internet-enabled networks of engaged users, I would be very alarmed if companies like AirBnB and Etsy started to drift outside the scope of "what I know". Also, what I know probably shouldn't be so limiting as what I use. For example, one of Warren Buffet's best investments was Blue Chip Stamp -- a discount coupon book publisher. I doubt Warren Buffet ever licked a discount stamp (other than as a stunt). But he does understand businesses that generate float. He is the master of investing float.
>Seems terribly sloppy as an investor (or prospective employee, for that matter) to be influenced by such a personal bias.
It is but, on the other hand, it would be equally sloppy to decide to fund an idea that you think seems pretty ridiculous and couldn't imagine using in a million years on the grounds that someone will find it appealing. With AirBnB, the real trick was that there was apparently (though still to be proven long-term) a business opportunity in the interstices of couch-surfing, hotels, B&Bs, and traditional vacation rentals that has mostly managed to skirt regulatory/legal/contract issues.
Yes, follow your dream. but don't follow too hard that you loose all your money and savings because "the airbnb guys got rejected too".
sometimes it's good to be realistic and understand that if you get rejected all the times maybe it means you're in the wrong direction.
posts like that will encourage people to keep hoping and might causing them damage by not being connected to reality.
I remember watching an investigative journalism piece that showed that professional traders on Wall Street can barely outperform a monkey.
I think given these kinds of statistics I can't understand why there's not some public fund where average citizens can invest toward. That fund would run a lottery every year and accept 'x' # of companies depending on how much was invested the previous year. Each of those companies would (depending on current cash flow) provide a % of ownership to the fund.
Noone tells them how to use the money. No investor has authority to interfere whatsoever.
Of course I imagine there would be reporting requirements, and require certain levels of transparency into their books and such in order to create at least some hurdles to prevent people who are just out to scam the system from applying.
Maintaining the status quo just perpetuates the "rich get richer" paradigm.
Investors who missed out on great products aren’t to be sneered at. Indeed, Airbnb of year 2008 would’ve looked like merely a toy to most people — something that in no way could become huge. There were too many risks. Even if it grew, it still seemed would not be anything to write home about. That's why people who invest in toy-like products are usually family or friends of the founders. I wrote a blog post about this.
The "traditional" answer is to identify the VCs you're interested in, and network your way into an introduction if you don't know them yourself. Accelerator programs can also be a way to become involved.
Have a clear, clean pitch deck. Know your unique value proposition, understand your competition, be able to demonstrate that there's a market and that it's significant. Show traction, team, and ability to execute.
Every investment opportunity has risk, and many possible outcomes. There will always be investors who gained. There will always be investors who missed a chance to gain. Alternatively, there could be investors who lost, or those who dodged the bullet.
This one had gains and missed opportunity. No one lost anything except time reading a post that appears to be 'prodding the losers' when there weren't any. In fact, some of the investors probably made more elsewhere in something closer to their realm, so it can't readily be said that an opportunity was missed.
It's obviously easy to critique in hindsight but I think it's interesting that a theme of the rejections is "not our type of marked". It seems like the investors are somewhat conservative in sticking to what they know which is a little disappointing (I like the response that the investors can't really help because they don't know much about the market).
That suggests that you'll get filtered out pretty quickly on variables like market type which seems pretty unfortunate.
Keep in mind that this can also be code for "we didn't get a good vibe from you, but since it's hard to explain intangibles, we'll say it's not our type of market." Investors also aren't necessarily above hand waving to spare feelings.
It's really hard to tell the success of an idea and I think one investor mentioned in the email that they don't understand the market so it would make it hard to nurture such products.
They simply cannot invest in all ideas, just because Brian got lucky doesn't makes it applies to all startups
That's ultimately the lesson IMHO. You gotta keep hustling and doing what you think is right but not get hung up about any particular connection or rung of the ladder.
This, in itself, means nothing. If you need to read things like this in order to understand that not everybody is going to love you or your idea and to help deal with rejection, most likely you are not be cut out to be an entrepreneur. Every investor has stories of ideas that they passed on that they shouldn't have (in retrospect of course) and every entrepreneur (or guy dating in high school) also knows of investors or dates that they felt made the wrong decision.
Pushes all the right buttons, but keep in mind that those investors also rejected vastly more ideas that most likely never went anywhere. That was their take on airbnb at the time.
With respects to Airbnb, Fred Wilson of USV passed on the opportunity as well and posted emails showing where Paul Graham personally spent quite a bit of time trying to convince him otherwise.
Sorry, but this looks like humble-brag, because everybody knows what happened in retrospect. Those VCs, probably can give CEO of ABB dozens of examples, how they rejected some 'promising' startups which have failed, and a few which they accepted and made them nice cash.
Also to this day ABB to me looks like Couch-surfing for money, unless you get full apartment. And usually only advantage you get versus hotel is that you have a kitchen and/or washing machine. IMHO, there are lucky people who own apartments near city center, and are collect month's worth of rent from 4-7 night stays. That's how ABB looks to me after I tried it.
refusal happens in life, nothing new? But at least most of that email had a clear reason why, some also gave advice. I think they were lucky to have such responses.
I'm not sure turning down ABB is a sign of incompetence. It is with hindsight, but there was very little that showed there was a huge market waiting to be exploited prior to ABB. They were genuinely pioneering; they essentially invented the market.
Also, there are thousands of deal turned down annually which end up being the right decision (for the VC at least) when the startup fails - all those would point to VCs actually making the right call most of the time.
Someone getting it wrong, even if it means missing a unicorn of a deal, isn't necessarily incompetent.
Even in 2008, was this a reasonable way to try and raise $150k? I would think that level of investment should/would be procured from friends & family, not cold-ish intros to angels/VCs?
His point is entirely consistent with Brian's point. Brian's saying "consistent rejection doesn't mean you should give up" and the VC is saying "even consistent VC rejections can be wrong because VC is hard".
Ha. You know the same concept applies to talking to girls?
I'll never forget the day I went out exclusively to meet a girl. I was rejected by maybe a hundred girls I approached. The worst one's were the ones that just stared at their phone, like I wasn't even human.
I was tired. It was 8PM... around that. I go up and approach girl inside of a clothing store. Please God speak english. She opens up with perfect english, smiling. We went on a date right there. Huge confidence booster.
Frankly, people are a complicated bunch. You don't understand their learned behaviors, position and internal politics. There's no way you could understand the whether a girl is grumpy, just broke up, open to meeting someone new until you come up to her.
We need more posts like this. Not just for VC's, I'd like to see comeback stories for freelancers scoring gigs / job interviews.
Based on a collection of screenshots I put together of Airbnb's homepage over time (using content from the Internet Archive) I wouldn't have invested either in early versions of Airbnb:
http://www.startuptimelines.org/startup-timelines/airbnb/
Fred Wilson got his email from PG, I believe, in January 2009 and if you look at the Airbnb homepage then - the site is no where near as promising as it is now.