The Genie and The Bottle
In arabian stories, the Genie is a magic spirit that has powers to do things for you. But if you let it out of the bottle, you can't control it anymore and bad things can happen.
I like to think of this story when I think about startups and technologies that have the potential to be big game changers. The key is to get the Genie out of the Bottle because then they (the incuments and establishment) can't put it back in.
Let's look at Airbnb. There are a lot of folks here in NYC and NY State that don't like Airbnb. It's competition for the hotels. It's unpopular with neighbors who don't want unknown people in their buildings. And, it turns out, it is against the law in NY State.
But you know what? The Genie is out of the bottle. In less than a week over 70,000 people have petitioned NY State to change their laws. And over 9mm people worldwide have stayed in an Airbnb since it was founded a few years ago.
Airbnb is a game changer for people who have a home and need to use it to supplement their income for various reasons. And Airbnb is a game changer for travelers around the world who want to pay less and get more than a hotel room.
I don't think we can put the Airbnb genie back in the bottle at this point. It's out.
So if you have an idea that is truly disruptive and will make a lot of people uncomfortable and against you, the key is to get it out there as quickly as possible. Because if you have millions, or ideally tens of millions or hundreds of millions, of happy users on your side, the forces that will want to shut you down will be unable to do so.
The Genie will be out of the Bottle.
I signed.Friends consider me overly optimistic for change.I’m a believer that if you act and a big enough community forms, change happens.
70,000 is a big numberif they can get the signatories to a couple hundred thousand that would really send a message
Totally agree – 70k certainly is a big number. I can visualize this being taught/included as a case study in many a social/political science – and possibly MBA – courses long after the dust has settled on the current issue.
36 million is a bigger number. It’s also how many people took to the streets to protest the against the planned invasion of Iraq. There were 150k people in the street outside my office. Quite, the message, no?
I reached out to several e-comm contacts when I first set out to build http://www.wanderandtrade.com to get some advice. They loved my mission to aggregate all the small local businesses and their products into a marketplace. They were very helpful.And then I told them I was taking half the cut that they usually take from manufacturers. And that I was taking the extra effort to streamline things on the backend. And now I have more vendors than I can handle at launch.They’re not so helpful anymore. 🙂
disruptors never are
or, rather, the disruptee
Cnanged your biz’s name Brandon?
Airbnb should reframe the issue to airbnb vs bnb not airbnb vs hotel.
Until I got to the line about Airbnb …I thought you are going to talk about open-source.
hesitant to agree because it’s a centralised service.bitcoin/bittorrent etc, a resounding yes. too many nodes. safety in decentralisation. regulate, legislate all you want. those ships have sailed. they aint ever going back.Airbnb, not so sure. a super aggressive District Attorney. Coming after shareholders/directors – not so sure they couldn’t get Airbnb to go the way of the dodo.(back in 2006, the US Govt wanted to get rid of online gambling. no one thought they could. no way hardened gambling companies were going to close shop due a little govt intimidation. overnight, Unlawful Internet Gambling Enforcement Act came into being, payments got turned off, indictments started flying around, companies couldn’t get out the space quick enough)
Exactly. Other historical precedents: napster, liberty reserve.
Yes, I forgot, Napster didn’t win. There is not enough music sharing on the internet.
yeah but teh centralized file sharing systems lost. kazaa, napster…..now it is all about torrents. airbnb is a centralized system.
more of a platform with decentralization on both sides. I’d call that a marketplace.
how is it decentralized? if you take down airbnb, the whole thing falls apart. airbnb chooses who can live on its platform and takes a cut of all money that goes through it.commercial entities are going to need to be centralized, and thus will be easy targets. the only way commercial entities can decentralized is if they form a federation/alliance/cartel and numerous separate companies agree to help each other defend against government.
The entire pharmaceutical industry and the air travel industry. Both are heavily regulated.
Cigarette Smoking in Public Buildings
Great point about centralized vs decentralized
An aggressive DA can get Airbnb to close, but they can’t eliminate the concept of Airbnb any more than they can eliminate all of the bittorrent sites – if people want the service, they’ll just make more sites.
I don’t think it works that way – in this case.An Airbnb style marketplace is based on lashings of trust and credibility, the marketplace itself needs to be above reproach. you can’t achieve that if you are an outlaw.
It makes it harder, sure, but in general legality is not a prerequisite, IIRC even Silkroad had a well-functioning trust/credibility system despite dealing in completely illegal items.Decentralised trust systems are possible; however if I think more about it then the system can be destroyed by government going after the end-users, since those rentals in the end are very non-anonymous and simply fining a noticeable percentage of renters would destroy any profit motive.
I disagree. It’s both centralized AND decentralized. That’s the beauty of it.You need Centralization to organize chaos and bring trust.And Decentralization is there, because it empowers anyone to rent their place and make money.Best of both worlds.
concept can be decentralized. airbnb itself eptiome of centralized.objection overruled. 🙂
Not so fast!Usage is totally decentralized, no?
yes. usage is decentralized. as it surely always is.litmus test is this, turn off airbnb’s servers – how much good is airbnb now?turn of bitcoins servers … – you can’tturn of bittorrents servers… you can’t
Turn off the Nasdaq or an airport, and you’re toast. But are they a bad thing?
I think the Genie is still out of the bottle. They shut down Napster but everyone had seen the demand for the service so it was inevitable that another (similar) concept would arrive. I agree with LAID that a decentralized model is better but even if they shut down AirBnB others will come. It’s too late.
that is also a great point
William, respectfuly, the Naddaq / Airport analogy does not hold. Delivery too localized.The airBnB market is where they are vulnerlable. They are selling ldging as agent – if the lodging is illegal they have serious iissues.Genies go back into bottles & it could happen here.
Granted there is some risk in that model, but their operation is still a hub and spoke model. There is a transaction in the middle, and they manage the fluidity and trust in the middle. That was the slant of my analogy.That was in contrast with LIAD who is a proponent of a peer-to-peer system, with no central choke points.
I think you’re talking peer-to-peer.
Now there’s the next business, aggregating demand for AirBnB in big cities to provide a more uniform service for both parties. An AirBnB broker, like a travel agent (makes deals, gets and returns keys, has a bunch of clients and knows work-arounds)Surely there is special knowledge/process that can helpover/under on when we see that on AngelList? 😉
This would be difficult – and not worth it in NYC at least where it’s illegal for resident to not also be living there. And if they’re living there (and the cities will start checking) then it would be very little effort to manage keys of people. Certain situations where it might work, though likely not worth putting the effort into as a business.
At yet people still gamble online.
And revenue has more than doubled since 2006.
Terrific insight on that vulnerability.
I agree, it’s too late to turn back now. But I do sympathize with some of the concerns (wrote a post, here: http://brandondonnelly.com/…. I wouldn’t want my neighbour renting out his place like a hotel. My argument is that there’s a gradient of use here. Supplementing your income is one thing, while operating a hotel business is another.
I agree that there are issues. I think transparency would help everyone. They operate a grey market because of regulatory issues. If it was an entirely open and transparent market these issues would be easier to deal with
How does moving regulation or laws to a building-by-building basis make it more transparent? And if you do that, why not floor-by-floor? Or apartment by apartment? True transparency would ultimately make all property commercial (ie. highly regulated). If you let this genie out of the bottle, we’ll just create a million smaller bottles.The real problem with AirBnb (which I’ve used and love as a traveler) is that millions of families have bought or rented their homes and apartments under the assumption they wouldn’t be living next to revolving doors of strangers. Schools were built with the assumption there would be a certain tax base. Towns created infrastructure based on daily commutes. I know the value of my house (if kept a residential home) would drop immediately if someone suddenly made my neighbor’s house into a motel. (Yes, my house might conversely be worth more if I then turned my home into a motel, but where does this end… we create a world where families could never safely buy a home to actually live in? )The founders of AirBnB seem like great smart guys, but they did not set out to solve a problem for millions of people, they set out to solve their own problem: 2 20-year old art students trying to pay rent. Once venture capitalist got involved, the problem got a make-over. (I’m not blaming anyone, but this is what is really happening. A small problem got dolled up into a billion dollar solution.)
Side Comment: Fred did you watch the Jets win over the Pats. It was not a great way to win a game…but as one of my good friends says – a win is a win.JETS J E T S J E T S J E T S
That was bizarre call. Love the win but not the way
Users don’t really care about your product. They care about what your product enables them to do.So, if your product enables people to do big things, especially ones they couldn’t do before, then you’ve got that Genie effect.Some other companies where the Genie has been out too: Twitter, Kickstarter, Tesla, Facebook.You need a BIG Idea for the Genie to come out. She’s not that easy.
how so for Tesla? I see different distribution model….but I am not seeing a radical change, but more iterative.
In the sense that they were the first to show what can be done with this new generation of cars, at a large scale. Like Ford did, back in the day. It’s a new chapter with cars, hopefully. They let the genie out first and proved it.
Another way to put what @wmoug:disqus said: I don’t have to buy gas anymore.
…they care about what your product enables them to doLoved that article found at startupmanagement.com by Laura Klein about not making users have to explore the product in order to use it and the classic quote she shared from Theodore Leavitt that when customers buy quarter inch drills they are really buying quarter inch holes. http://usersknow.blogspot.c…
Thanks Donna. And related to it also what I wrote about the power of “narratives” that your product/company engenders, inspired by John Hagel on that topic. Basically, it’s beyond story-telling. http://startupmanagement.or…
She will come out on her own. In this case the entrepreneur is only the vehicle for another force, not really the architect, as much as we’d like to think romantically. In every case of “extracting” latent value, the money will push someone to do it eventually. Look at Fracking or Finance.
Right. The entrepreneur has a hand in enabling the conditions for it to come out.
eBay and Half.com (and later Amazon) too. They are older but I used them to save hundreds of dollars in textbook costs in college and law school. The textbook companies would try to compete by “updating editions” but often the professors were sympathetic to students and/or the updates were too minor to make a difference. Not to mention tech upstarts like Gazelle that make it easy to sell an old gadget. My iPad 2 is still worth $190! Makes upgrading more palatable.
Your analogy implies that startups need to harness the power of the genie while still in the bottle (get your 3 “wishes” from the incumbents or from the status quo) and then disrupt (i.e let the genie out of the bottle).Which I think is likely true in many cases. Startups don’t always disrupt right out of the gate. Sometimes they grow strong by playing by, at least some, of the rules before disrupting. Might just be that they need to find their way; lost at first, then BAM, they fall upon a disruptive model.
It’s what the product enables & how it transforms the user, or empowers them to do something. That can happens from day 1 of product/market fit & it is only accentuated when more users join, like a rolling ball effect.I’m not sure that you always get there over time. Either you have a product that is a liberator of something, or you don’t.
Right. We’re on the same page.
Horse has left the barn.
Indeed.com is an interesting story there. The incumbents in their case were monster hotjobs careerbuilder craigslist
Don’t see how this law can be enforced in NYC.I don’t know why Bloomberg didn’t embrace Bansky either.
I know. That was an easy one
Uber is like this as well. With regard to AirBnb, existing businesses, like hotels, need to figure out a way to live with the disruptive model. If they are smart, they can outflank them.
Or buy them like Avis bought ZipCar.
I don’t think that history or society agrees with you here and I don’t think it’s entirely about incumbents being threatened. AirBnB is a really cool service and innovation. But as a society we put the genie back in the bottle all the time and often for good reason. The pharmaceutical industry is very much back in the bottle. The technologies underneath it were and are disruptive. Much more so than AirBnB but we choose to regulate it because we believe it’s in our collective interest to do so. Same with the telecommunications industry. Same with air flight (a very disruptive technology).I’ve frequently rented homes and apartments in lieu of using hotels and I think AirBnB, Homeaway et al provide great experiences. But I do think there are legitimate issues here that go far beyond the hotel industry’s issues. Personally, I don’t want an ever changing set of short stay people coming into my (small) apartment building where we’re raising two very young children. It might be a great revenue source for the other apartment owners in my building but I don’t benefit from that revenue and I do absorb some cost and risk.
I understand your point of view.Won’t be suprised if this gets written into building bylaws just like subleasing is.
That is exactly what should happen. Those who will pay more to have a locked down building will choose to do that. Those who will pay more to have the ability to extract extra income will do that. We need to legalize it and require transparency in the market instead of keeping it grey and under the covers
thank you thank you thank you
So in essence, AirBNB drives up rents. Great.
You just sliced away 1/2, 1/4 or 7/8 of their market?
Yes! The market will clear this. Innovation doesn’t always benefit everyone evenly and it takes time for the market to respond. But the market will do so more effectively and expediently than the government will.
Agreed.Interesting story – The younger brother of a good friend got into the AirBnB “business”. He rented a bunch (~10) of apartments in NYC and furnished them and rented them out on AirBnB. He did well financially. The landlord(s) of a building in which he had an apartment or two shut him down because he was making an effective rent that was about 3x what he was being charged. I’m pretty certain that two different city organizations were involved in shutting him down. The FDNY has different rules for hotels (where the tenants don’t know the building layout) than for regular apartment buildings. The city revenue people realize a 5.8% tax on hotel revenue.
Such a great case in point.Would I want this going on down the hall from me–no way.Do I think making it legal then dealing with the laws around it is the way to go–yes, I do.
You are correct. The regulators are always late relative to new business practices and create regs to put the genie back in the bottle.
I love the discussion and debate this post is bringing out. Exactly what AVC should be. A place to work out ideas
Agreed. A lot to learn here.
I’m not sure it is innovative. People have been renting spare rooms since they had rooms..This is just tech enabling more of it.Don’t you think that this “sharing economy” is actually a sign that people can no longer afford traditional ownership, and hence a further sign that people now HAVE to extract value any way they can to stay in the game?The true underlying message in all the pitches is that these services are a way for people to leverage themselves further into an unsustainable, or at least unhealthy way of living…precarious and temporary/part time jobs and shared-ownership at the expense of permanence and security…no more “home” or leisure time, you now have to “extract value” from it just to stay in the game.Isn’t this just Alice’s Red Queen in your living room?
Nothing unhealthy about sharing, minimalism (ie not owning/hoarding things), and having a lower cost structure as a result. Ownership is not a virtue.
had this leaflet posted on my door when I stayed in an Airbnb a few years ago in Manhattan. Felt horrible that I was unwittingly involved in this battle. Residents have a fair point.
I wonder what percentage of the room nights in NYC are rented out not by your “average” renter renting their own apartment a night or two a month but rather by organizations (like “Hotel Toshi”) who are in the AirBnB business. I’m guessing that on EBay, the concentration of seller revenue is dramatic. 80/20? 90/10? I wonder what it is on AirBnB?
Seems to me that this should be a civil issue and not one that gets further complicated by regulation. The residents can leave. Live somewhere else. Or file suit. Getting the regulators involved is not the answer.
I totally agree.
I’ve frequently rented homes and apartments in lieu of using hotels and I think AirBnB, Homeaway et al provide great experiencesIronic.It might be a great revenue source for the other apartment owners in my building but I don’t benefit from that revenue and I do absorb some cost and risk.(You may benefit under certain circumstances.)If you rent then allowing people to do short term will in theory drive up the price of the rent (because people can afford to pay more if they can get income on the side). So, bad for you.But if you own it could either increase the value of your condo (by the same theory as previous) or decrease depending on who would typically purchase a unit in your building (investor or owner or how they view this whole thing).So if people know that they can offset their mortgage payments with airbnb rentals they will in theory pay more and prices will be driven up. Unless the value is decreased by the undesirability.
I see that regulation as a natural extension of something when it simply reaches a certain scale. I wouldn’t be surprised if Uber (or whatever it and its peers become) end up under some sort of regulation — the new world defacto cab industry. Wrote a bit more at http://noblepioneer.com/pos… and still working out my thoughts on that concept in general.So I think society does agree with @fredwilson:disqus . To your pont about the telecommunications industry, this is the same thing the telephone did to the telegram (and thus was subsequently regulated) and the telegram did to the Pony Express (was the telegram regulated?). The very cab system Uber is replacing in NY was itself a replacement for electric cabs (of which there was very short supply) in the early 20th century. Then the Great Depression happened and so did regulation: the Medallion system was introduced due to oversupply.
Good point about scale as a trigger. Broader question is – what should happen here? I expect that there will be some amount of regulation either from government or effective regulation because building owners (co-ops, condos, etc.) take it on themselves. I also expect that the tax authorities are going to want their piece and won’t draw a distinction between a short-term rented room in a condo and a rented room in a “hotel”. Either way, it’s a hotel and they’ll want to get paid.
Friends who have used Airbnb in NYC rave about the service. As a resident of a fairly large apt bldg in NYC I do have concerns about the transient nature of guests coming and going. If hotels are losing out, then they need to up their game and deliver stronger customer value. My hunch is the action of the D.A.’s office is driven more by a concern for lost tax revenue than the economic interests of hotel ownership.
sometimes it’s the taxes that won’t allow the hotels to react-or the rules and regulations. Hotels should be railing against incumbent governments and telling them to take shackles off so they can implement innovation. Instead, they get cozy with them and try to legislate against innovation.
yep, it’s an economic layer cake.
Not sure if Fred had his 2nd cup of coffee before writing this, but the parable of letting the genie out of the bottle is an example of what not to do.Seems to me that “extracting value” through the application of technology is common thread in most development, from CDO’s to mining, and often the ‘genie out of the bottle” is really a case of someone getting ahead of a long standing balance because they can (and make money from it), not necessarily “disrupting” something that needed to be shaken up.Take the case of drilling for oil. Yes you may have a lease on the individual piece of land, but the knock-on effects of the activity to the environment can sometimes have a considerable cost to the environment, at others’ expenses.Nothing wrong with extracting value if it is not at others’ expense. If we have learned anything in the past years in finance, Gulf oil drilling, or right to privacy, it would be that there are often societal costs associated with an individual’s pursuit of that activity which we should factor in. Obviously, a “neighbor” has the right to know if what he is contributing when someone else extracts value from the environment.And as the original story relates, the owner rues the day he was tempted to let the genie out of the bottle, and as others here have, that is why we often do put them back in.
Coase Theorem takes care of this with positive and negative externalities. The classic case is a river. Fisherman fish for income in the river. Sportsman use the river for fun. A factory locates on the river, and starts polluting, killing some fish. Who should pay for the pollution control devices on the factory?The answer depends on the economic value everyone places on what they do in the river. As long as property rights are clearly defined, and people can bargain efficiently, whatever solution they come up with is the best for all of society.It’s an elegant theorem that if understood lends itself to all kinds of things-very disruptive things that can establish network effects quickly.Clearly, Coase is the solution to any problems with AirBnb
a law that prevents people from letting their own residential property?doesn’t seem very ‘American’.
Agree – that has always been my first thought. If I own it, I should be able to do what I want with it.However, I think there is one nuanced point, which is that when you rent an apartment, own a co-op or condo – you inherently give up a large swath of your ownership rights to the collective that runs the building, and your “right” as an owner gets trumped byt he rights of the community you have chosen to throw in with.Single family homes – I can’t imagine there should ever be an issue – but co-ops and condos in cities – here I think people may have a case against the service.Which is ironic – because it is in these areas where the greatest need for the service exists.
it comes down to architecture. big apartment blocks have certain conditions and circumstances that require a measure of ‘harmony’ to be enforced for the collective good of all. i can see that. i wouldn’t want to be plagued by a never ending stream of transient dwellers next door.i bumped in to a couple from NYC in Munich. intellectual, bookish types. they had an apartment and were sub letting it for a month to finance their European trip. they made it sound like the very normal thing to do. i think this was just before Airbnb came along, but clearly there was a market to be tapped.
Agree – that has always been my first thought. If I own it, I should be able to do what I want with it.Not if it prevents your neighbor from having the quiet enjoyment of what they have.Same reason you can’t blast your music whether at 3am or at 6pm.Have to take others into consideration around a baseline of what would be considered normal or reasonable.We have zoning laws in our neighborhood to prevent people from running businesses out of their house.Not the type of business that doesn’t bother someone (one person with a telephone_ but the type of business where they get deliveries or have employees going in and out, traffic or whatever.By what you are saying “they own it so they should be able to do what they want with it”. It doesn’t and it shouldn’t work that way.
i remember being in Vienna. very strict noise codes there. 9 pm is the threshold. after that the police can and will ‘deal’ with violators on the spot. i like it. everyone knows where they stand.
Robert Oppenheimer reflected on his work in exactly this way.it’s not possible to uninvent things.
Great analogy. Best quote of his from Rhodes’ brilliant ‘the making of the atomic bomb’ is surely: ‘it is a profound and necessary truth that the deep things in science are found not because they are useful but because it was possible to find them..’. Kindof apt for startups too, although we don’t all aspire to be as disruptive as the Manhattan project…
Illegal beats uninventable, in some spots.
When you say “get it out there as quickly as possible”…you really mean “scale it as quickly as possible”.Getting a truly disruptive thing out there too quickly is a guaranteed way to get crushed by the established players and the market…this is the one situation where I say it’s better to stay small and under the radar until you’ve really figured it out and got the fire heated up to a good temp…and then pour the gasoline on.
I call that “tunneling under.” 😉
Hill 60 style.
I suppose there are two sides to every storyOn one hand – the genie is out of the bottle in terms of unbundling a service which is legitimately helpful to travelers. Hotel rooms around my office here on 14th and 9th in NYC are ridiculous – $400 – $600 per night – so one can see the appeal. AirBnB is a service which is plenty god enough and inexpensive and it disintermediates guys with a lot of profits (and the city as well given the taxes they put on hotels)I can see where the incumbents will squawk like hell over this. Same as the cab guys with Hailo and Uber – entrenched companies always look to regulation to keep themselves entrenched.On the other hand is the very legitimate issue of city dwellers renting out their homes – turning residential co-op, condo – and rental buildings into short stay hotels.The beauty of the sharing economy lies in the efficient utilization of assets for the shared good. And in most cases this works extremely well. The whole car sharing business works well this way – but it is a business where no one in the general public is inconvenienced in any way and no one feels threatened in any way.We tend as a society to regulate things where a corporation or an individuals personal actions harm, or potentially harm others. Bloomberg’s ban on smoking is something that comes to mind. People can smoke – I just shouldn’t have to breathe it in is the thinking – and when you turn a common private space (an apartment building) into a public space – that is when you start to get into the area where regulations show up.
Well said.Harry, was just thinking the other day that our paths haven’t crossed in the comments lately. Hope you are well.
All is very well. i comment far less as I have moved to reading posts on weekends – and the conversations have largely passed – which is unfortunate. I happen to catch this one live and figured I would contribute. I’m a big believer in personal freedom and responsibility – but my family has also been in the residential real estate business in NYC all my life – so I really do see both sides to this argument.
I’m not sure I see the problem. Private property owners should be able to do with their property as they see fit. Maybe the problem is that hotel taxes are an inefficient mechanismf or raising revenue. Perhaps these tax laws could be extended to airbnb stays as well. You use vague terms like “shared good” but the real story here is that airbnb enables private transactions between individuals. There is no common good objective. The “shared good” is the sum of these individual transactions by definition. I also don’t see what you mean by a common private space becoming a public space, it’s still private property.
Co-ops and many buildings are not owned by individuals. They are owned by the whole group. It’s not always right, but it’s the way it is. So people will object. Now my guess is the people who will really object are those who don’t live in bldgs where people need to rent their sofa.
who don’t live in bldgs where people need to rent their sofa.To me this is all an example of how the bad choices of one group end up costing the group who made the right choices money. Same as people having babies they can’t afford. Same as having to bail out a relative who has made a bad choice but won’t listen to advice in advance of making that bad choice.No need for personal responsibility anymore just do what you want and others will clean up the mess that you created.
Who is the group you are referring to? Pardon my density. Long weekend. The renters or the co-op boards?
The group of “people who need to rent their sofa”.
Pretty convoluted. I want to make sure I follow. Are you insinuating that putting up a room/couch on AirBNB shows you’ve overextended yourself and are somehow a drain on society? I’d like to think that’s not what you meant…
Are you insinuating that putting up a room/couch on AirBNB shows you’ve overextended yourself and are somehow a drain on society? “need to rent” means “need to rent”. Not “would like to rent” or “would benefit from renting”.As such a statement like that (which is what I was referring to) means that the money is important and/or significant to the persons financial situation. (Like saying “needed to hold down two jobs to make ends meet” as opposed to “held down two jobs so they could buy a vacation home”).Consequently there is no insinuation that putting up a room/couch on AirbBNB shows that someone has overextended themselves anymore than using a credit card means someone has overextended themselves. Even though among the group of people using credit cards there is a subset of people who are overextended.Let’s take an example. You live in a neighborhood. The neighborhood is zoned residential and you can’t run a business there. You lose your job. You then want to run a business out of the house which bothers your neighbors with noise or unsightly mess. You plead “but I have financial problems so I should be allowed to”. To which I say “to bad figure out another way around your financial problems that doesn’t break zoning or bother the rest of the neighborhood”.
Peachy. So person who is faced with financial hardship and attempts to do something about it to avoid foreclosure/feed their family or otherwise get by is a pain and the person who opts to rely on government aid is a drain…My oh my, whatever are the poor to do. While I don’t advocate breaking the law (and appreciate a pain in the ass neighbor), with all due respect you advance an incredibly elitist point of view.
Is there some “registry of suffering” that is appointed and in charge consulting clear criteria to make sure that people aren’t taking advantage of or gaming the system? Because that’s what ends up happening. (One example as you know is what happens with rent controlled apartments). And: If the “to bad not my problem” sounds “elitist” perhaps if I was running for office I would simply state it in a different way so as not to offend.But I’m not running for office.Saying something nicely that means the same thing as something said coldly still gets you to the same place. After all it sounds like you almost agree with my point just don’t like the way I stated it. Did you see the recent (I think it was 60 minutes) report as far as people gaming the disability system because they have fallen on hard times?
That group could include people you know – there all sorts of reasons people would rent their couch.
Once again my point has nothing to do with people and the various reasons they decide to rent their sofas.It specifically with the people who “need” to rent their sofas because there is some event that happened that they didn’t take into consideration that caused them to have to rent their sofas. And specifically (see my other comment on this) when the decision to rent their sofa (for whatever the reason) ends up impacting their neighbors.Specifically (as I said)how the bad choices of one group end up costing the group who made the right choices money.
some people when they have a baby can afford it. It is after a year or two that things change – and it isn’t fair to the baby.
Sure. But that is up to the coop or individual owner to decide. They can then make these rules conditions of a leasing agreement. Seems to me this would be an entirely civil matter and that government shouldn’t be involved.
Whose property are the common areas in an apartment? Not the individual apartments. In a multi-family dwelling your private property isn’t the entire building.However, how different is this from being out of town and letting a friend crash at your place? The main difference that I can see is that you know your friend and thus have vetted them to some degree. The AirBnB rental isn’t someone you know.
Right, but it’s someone’s private property. Are you suggesting that the landlord (whether an association or individual) should have a right to not allow renters to use airbnb? This seems completely reasonable and something that can be addressed in a lease.I don’t see how knowing the individuals staying at your property PR not has anything to do with the government getting in between private parties entering a voluntary transaction.
Of course it can be addressed in a lease, but that only works for things leased from now on. You and others in this thread focus on the rights of renters and apartment/condo owners, but what about the rights of others in the building? When you choose to live in a building in common with others it’s not just about your rights – it’s about your rights balanced with the rights of your neighbors and, yes, the landlord. Want to do anything you like with your dwelling? Buy a house.
Take it up with the landlord (the owner). It’s his/her property. If the landlord(s) allow it and you don’t like it move out. That is your right.What if other tenants frequently had guests (stranger danger) over? Most crime is not committed by strangers.Just to be clear, I’m not saying that there is a perfect solution here. I’m just suggesting that regulating or making it illegal is a far worse option than those already afforded to you. If this is as big of a problem as you suspect, some enterprising landlord will build a business around this and prevent his or her tenants from doing it.If you don’t like your fellow renters, go buy a house! (See how that logic works?)
Again, you give primacy to the one person over the community. The right of one renter/owner is more important than the rights of the rest of the building. I simply don’t accept that stance as reasonable. By choosing to live in a communal building you give up some of your control over your dwelling. Ideally, that is spelled out in the lease (no smoking, no loud noise after 10pm, etc) but you also should accept that you’re now part of a community and that the interests of your neighbors also have weight even if they’re not codified.If people have guests over, those people are present. This is not the situation we’re talking about where someone rents out their entire apartment and is NOT present. Apples, oranges. The better example would be “what if someone is out of the country and lets a friend who’s visiting house sit for them?” Even in that case, I’d argue that you’re letting a person known to you house sit, not someone off the web who you don’t know at all.”If you don’t like your fellow renters, go buy a house! (See how that logic works?)”What logic? Again, you are giving the same weight to the interests of a single renter as to the other tenants. Sure, if you rig the game, it’s logical. Meanwhile, back in the real world, it’s not.As to landlords making a business out of this, what part of ‘this works for people signining leases going forward’ was unclear? Unless you want to require people to sign all new leases when theirs is up and deal with the potential churn you’re unlikely to mess with this right now.To be clear, I’m not a fan of knee jerk regulation, but I also don’t accept, a priori, that government has no role here either.
I give primacy to the individual rights of all people, not just “one person”. I believe that if someone isn’t harming anyone else they should be allowed to do as they see fit. The owner of a property should have the right to do as they see fit with their property. I am not a fan of zoning laws either, which are crippling property development in NYC causing high prices and low availability but that’s neither here nor there.I’m not sure but I think you are continually asking me about leases that have already been struck. The average lease will have less than a year on it. I don’t see any need to have laws that protect people until their lease is up. If once your lease is up your landlord is unwilling to structure a new one that prohibits other tenants from renting out their apartments then you have to decide if this is a place where you want to live. There are PLENTY of landlords that do not allow subleases of any kind without prior approval from the landlord. When I had to move out of an apartment early I ran into this, and I had to pay a subleasing fee to the property owner and my subletter had to go through a background check with the landlord and sign a document with the landlord… and I was still financially liable for the rent.Moving is a pain in the ass. I hate it. It is my least favorite thing to do yet I have elected to do it nearly every year for the last 6 years for various reasons like having crappy neighbors, wanting more space, moving in with a girlfriend, getting a dog, and rents going up at the end of leases. Not wanting other tenants to rent out their place on airbnb strikes me as in the same universe of the typical annoyances of renting, and you are well within your rights to not renew a lease at the end of the term.Your suggestion that a landlord would not want to sign a new lease just to change the terms of living arrangements to prevent subleasing strikes me as bizarre; I have had to sign new leases to keep the same apartment every time I have renewed a lease. Often pricing changes or they put new rules in regarding safety or trash handling.My comment about if you don’t like it go buy a house was directed at yours, where you said if you want to be able to lease a place out go buy a house.Your logic is equally flawed. What about the neighbors in a housing block? What if that “community” doesn’t want “strangers” on the block. What if they are afraid for their kids? What is most of the “community” wants subleasing on airbnb to be legal? What about “community” rights now?These issues are annoying. People have different opinions. Change is hard. But the government should not be involved. Seems to me like you are projecting your individual rights onto “the community” to benefit yourself, just as nearly everyone who lobbies the government for regulation does. They have talked about this game since the days of Adam Smith.
I’m actually ok with current regulations – you can rent out as many rooms in your apartment as long as you are there in it. it resolves some of the problems you are talking about. I’m not sure what I think about whole apartment renting.
We really need a regulation about blogging on the sidewalk. It’s a safety hazard.
Airbnb is a great idea and it does meet a need. But apparently it also causes some problems. Not just for businesses and for industries that are threatened but for people whose concerns are valid. So hopefully this doesn’t push the genie back into the bottle but causes further iteration. Just because it’s a great idea doesn’t mean that the implementation doesn’t need some refinement.
i stayed in an airbnb years ago in manhattan. each time i returned to the appt there was a leaflet pinned to the door by the other residents, along the lines ‘you are staying here illegally, please leave’. felt horrible. not right for customers to be involuntary pawns in this battle.
Yikes. My one and only stay was in Union Square and turned into a bit of a nightmare too because the former guest had thrown a party and the other tenants were upset. The host had to lie to the bldg mgr and say I was a friend of the family but it took a while for me to get into the apartment. I’ll still use the service but more selectively.
“excuse me, but you’re going to have to prove that. i want access to your social graph.”
Funny. But it does make me wonder about screening for something like this. Striking the balance between overburdening the system with too many requirements and being able to provide some assurance to your fellow owners/tenants that the person staying in your home (without you present) is trustworthy. In this case, it was a nice building — fairly high end.Is there a need for a premium level of Airbnb — more carefully screened on both sides? I’ve shied away from some listings.The worst part in this situation is that she introduced me as a friend of her mother’s! Aged me on the spot.And I am chronically honest so felt a bit uncomfortable standing off to the side with my luggage while she negotiated with the building manager.
i sense a huge opportunity for an ankle biter to go on a counter offensive, one building at a time, signing up management and board to superior terms and conditions. airbnb has been a land grab dash for growth spurred on by the needs of venture capital, where social niceties get trampled and users from time to time get used.i must try it for myself.
This is absolutely real.
What has your experience been with AirBnB?
Mixed review, but only used once for the AVC event a couple of years back. See my comment to LIAD above.I do occasionally check for airbnb listings when traveling but so far haven’t found one that meets my needs since the last time.I am still a believer but will be more likely to use it for vacation travel than business — or for an extended business trip. For short business trips, hotels and related ameneties are just more convenient.
thanks. I tried to use it twice in SF and NY, but the units weren’t available.
I am wondering, Fred, how early-stage VCs measure and decide to accept the risk inherent in these investments. When I was working with PE and bank financing, they hated (hated!) risk, and potentially unbounded legal risk was way way off the table.Obviously USV and other firms, such as those who funded Airbnb, Uber, Hailo, etc., which challenged regulatory orthodoxy, came to grips with companies that had this type of liability.How did you determine when it was worth it and when not?
Laws are made to serve people.If you build a large network of engaged users, at a certain point in time and or place, that activity will find its own way to become legal.Lawmakers should work to finetune our laws to those new opportunities while preserving the rights of users.
Sometimes laws are written to preserve monopolies or special interests. Dodd-Frank might be a good example of that.
the entry price is low at the start so you take the risk knowing that 2/3 of your investments will go bust. PE guys can’t take that kind of risk of loss and they write huge checks. we don’t
If it is a compelling technology breakthrough Genie will touch all-corners of the world NO MATTER WHAT.was tickled by this thought when i saw this photo on the net few moments ago:-)
I saw it yesterday (evening my time) and don’t remember where I saw now ….that place had so many such beautiful photographs … let me try to get the url…today.
Thanks Kasi – I’d really like to learn more about the photo
Just to taint the photo – he’s looking at boobies – you can just see it in his fixed gaze.Or maybe he’s using Codecademy or on Khan Academy..
No, he’s looking for an industry to disrupt.Or shopping for seat pads.
Definitely seat pads.
Who needs clothing!
No one if you have the internet!
Ultimate sharing economy
maybe he is looking at stories.
Is he of reading age? I don’t know how old that normally is, nor how old that child likely is..
I love the look on his face. Smart kid.He’s holding a world on his lap.
Yes that is what caught my eye first as well…. he looks so immersed into what he is looking at and the overall gesture looked like a grown-up man holding a laptop and working.
if this kid had a cigarette in his mouth I would be impressed.
ha… that would be funny…But would have spoiled the innocence in the picture and would have made the picture a ‘created’ one.
is Airbnb paying taxes to NYC on its economic activities there?Like Google, Amazon, FB, the whole bunch of ’em, don’t pay their taxes in the UK, and yet have tremendous political influence on GOV, due of course to the data gathering ‘service’ they provide to the state.
Or maybe we could stop assuming the bottle is the solution to every perceived problem.
I’d say that the genie is not only out of the bottle for apartments, but how people understand what it means to own anything at all… We’re in the midst of a much broader societal shift toward desiring access without the burden of ownership, which more fundamentally challenges the notion of property altogether.The truth is that the idea that we actually own anything, is totally absurd.This fundamental shift at the individual property level funnels up to have huge implications, which is most acutely highlighted with real property (real estate)… During the recent housing “crisis” in the US, people genuinely started to question what it means to “own” your home if a piece of paper from a bank says that you don’t anymore… and when people start to question this, the foundation of our entire banking, monetary and economic system is challenged. Everything is challenged.Airbnb may end up settling the question of what it means to have a partial ownership claim to the communal ingress and egress of a multi-residential building, but what’s really happening is that we’re waking up to the more fundamental understanding of the absurdity of property ownership that the Native Americans understood so well, articulated in 1851 by Seattle, Chief of the Suquamish in response to an offer to sell 2 million acres of land: bit.ly/16UCHL5
+1 on this statement…philosophically so so true.”The truth is that the idea that we actually own anything, is totally absurd.”
.While the American Indian experience merits some in depth discussion, I doubt I have ever heard a more specious comment in regard to property.The ownership of property is a very simple concept and it drives our entire economy.The concepts of fee simple ownership and leasehold estate ownership are concepts that have been used for literally hundreds of years with no problem in their administration. They are perhaps the most “settled law” there is in both America and other countries.The use of a fee simple ownership as collateral in the banking system is also well settled law and fundamental to the operation of our economy.Ownership, when one uses a fee simple property interest to secure the promise to repay debt, is subject to prior liens. Liens granted by the owner in return for the ability to borrow money and secured by the borrower’s property. Again, a very simple banking and real estate concept.The promissory note, the loan agreement, the deed of trust spell out completely what the relationship shall be in the event the debtor fails to pay in accordance with THEIR promise to pay.This is not a new discovery. Real estate ownership and sex were not just discovered. They have been around for a long, long time.JLM.
I understand completely your point, and I agree that the foundations of our way of life have historically depended on the contractual right to defend varying degrees of property ownership in a court of law, and that the ability to do this is not only fundamental to our economy, but to a large extent allows us to keep peace where anarchy may otherwise rule.My point is that the application of new technologies that start to divide property ownership into smaller and smaller fragments of time, or bits of access, starts to change both the need for ownership, and subsequently the value of ownership.This ultimately raises the question of whether or not people actually own material things, and starts to reveal the abstract nature of contractual ownership, versus the direct experience of deriving utility from the parts of the earth that we use to achieve our ends.These lines are starting to blur, and specious as it may seem, I stand behind my comment that we, in actuality, own nothing, both philosophically, and practically. The court is just like any other human invention, and it merely supports the illusion of ownership. How long we have been under this illusion, is irrelevant in light of the fundamental truth that belies it.Furthermore, your response speaks directly to my point, that everything is challenged, from property, to banking, to our way of life, when the idea of property ownership is challenged. This is exactly where the rubber hits the road.
.Hmmm, seems a bit fuzzy logic.One can own an interest in some infinitesimal slice of property and yet the aggregate is ownership of the whole.Even ideas can be owned and this notion is the basis for intellectual property.You seem to have conflated the right to receive a service and the notion of real property. Both are property rights while one is quite physical and the other is ephemeral.When you are in Court and standing before a Judge and a jury, I can assure you that the notion of ownership is anything but an illusion.It is a good system and any society has to have means and methods to resolve disputes in an equitable manner.I cannot understand your argument. It is well expressed but I cannot find any factual basis for your position.JLM.
My point is not that the court can’t factually back up and enforce the ownership of either real or personal property using records drawn out of of ink and paper… this is clear. My point is that no matter how much ink and paper we create and reference, it doesn’t change the fact that ownership is artificial in nature, and products like airbnb are bringing the nature of ownership into question in a contemporary context, being discussed in our very courts today.If enough cases like these are brought into the courts to challenge what it means to own property, and what it means to divide ownership into smaller and smaller fragments, trending toward an etherial definition of ownership, eventually we will rediscover, through the courts themselves, the fundamental underlying truth.A truth so thoroughly understood by the Native Americans, who had this understanding out of the advantageous perspective of not being bound by hundreds of years of court precedence to support a false cultural notion of ownership, but rather relied on the direct experience of reality.A new economy of access without ownership, is a trend toward the realization that ownership is bunk, on many levels, regardless of how useful of a technology ownership itself has been to humanity historically.Please don’t get me wrong, ownership isn’t going away anytime soon, and I’m a supporter of our use of it. However, it’s good that technology is challenging these huge assumptions and foundations that we have built everything on top of.I recognize that I take a position outside the “establishment” here, but that’s precisely why I referenced the poetic explanation given by Chief Seattle, which thoroughly explains, citing examples of direct and undeniable human experience in nature, the “fact” that we don’t own the earth, but rather the earth owns us.If the Airbnb case moves us closer, no matter how minutely, to reconnecting us with a fundamental, self-evident truth of nature, then I should call it progress toward a more advanced society, where the human institutions we create more closely match the laws of nature around us.
.I dig your transcendental thinking. I do not discourage you in any way. But it is not founded in reality.The Indians did have it right — for their times and culture. But that was all subsumed and destroyed by the white man’s ways. Not a moral or value judgment, a historical reality.There is no underlying truth to be discovered. That ship has sailed and what we have is a very well settled body of law that allows all of us to know and play by the rules.The notion of infinitesimal slicing of ownership is still ownership of the whole when it is re-assembled and when it is administered — like stock markets which sell you 100 shares of GOOG but force the company to conduct its affairs and corporate governance as if each share is the entire ownership of the company.The fundamental basis of your argument appears — to me — to be that ownership is “bunk”. It is not and there are no court cases winding their way to the US Supreme Court challenging any aspect of ownership. The closest was recent eminent domain v confiscation cases which were wrongly decided in my view.The laws of nature are not the laws of man. Property ownership is not impacted by nature.JLM.
I greatly appreciate your entertaining this most esoteric line of discussion, now bearing little relevance to the original post by Fred, and perhaps little relevancy in the world as it exists now.However, I still stand by my original idea, responding to your comment that my position is not founded in reality. In fact, I find the concept of ownership to be the half of this discussion that is specious, superficially plausible, but actually wrong.That doesn’t mean that we can’t build entire cultures upon wrong ideas… those cultures can thrive and proliferate around the globe, creating amazing things, their false assumptions creating realities that are as reliable and convincing as the sun appearing in the sky.What is important is that we never drink the kool-aid completely, that we remember to take a step back from time to time, and realize that our civilization, with all of its dazzling illusions, is a set of assumptions, most of which are inaccurate outside of a self-referencing sphere.It is with this perspective that great ideas can emerge, that disruptive technologies can be created, and that great entrepreneurs can see through the status quo culture to create change, value, profits (through ownership no less), and enormous progress toward a better end.It is just as important to be fully well versed in property law, and how our society functions, to truly understand what it is, and what it isn’t, in order to be able to use this knowledge to your advantage in the process of creating progress through entrepreneurship.Thanks again for your time and attention here. Highest regards.
I commend you for having the patience to go back and forth on this one. (Really.)Taking this from the parent comment:This ultimately raises the question of whether or not people actually own material things, and starts to reveal the abstract nature of contractual ownership, versus the direct experience of deriving utility from the parts of the earth that we use to achieve our ends.I prefer not to question so deeply why things are but just enjoy. The red car (or my car, or sex) gives pleasure. No reason to wonder why. It does. So just go with it. To do anything else would just lead to unhappiness and depression.Or that big building you built. It makes you feel good that you did that. It impresses people. Doesn’t matter why. It just is. For me that’s good enough.
The discussion about Airbnb here has me wondering: have the issues around renting out one’s apartment for short-term stays already been worked out satisfactorily in Europe or somewhere else?
I love a RISD team of ID people fixing the room rental problem, for the renter and the host. I wonder if ID are the mechE of art school, from your talk last week in scaling.We have people stay the night all the time in my studio, but sadly I host without getting the coin ( which I sorely need), because I have a coop in NYC. Before I quit my day job I was in real estate, and was very good at it (though it bored me to death). If you have spent good money getting rid of shitheads from apartments like my family has, you will take a healthy respect of why there are laws.I own a coop instead of a 401k as my retirement fund. I won’t be messing with Airbnb and the coop rules, even though I support AirBnB and I signed the petition. I do believe in a more European version of being able to rent your place, to have decent judgement on curating that experience for your neighbors to not bother them.I don’t think Americans are good neighbors, they don’t share space well. That’s why big cars and suburbs are prevalent. You see this on trains as well. We have so much space conceptually, that we seek to own it rather than share it. I think that’s part of the core disruption of AirBnB – to move us to think more like europeans.
When Americans build community, they are the best neighbors in the world. I disagree with the thought we aren’t good neighbors. We might be ethnocentric, but the suburbs and big cars have nothing to do with being a good neighbor.
Many people are good neighbors, and many are American. My point is being a space hog can make you a bad neighbor due to your need to insulate yourself.
The genie that is out of the bottle is that airbnb has become very successful and like all successful endeavors it’s time for them to get in line and participate in the graft or be demolished. Politicians wipe their asses with petitions. Time to start hiring someone’s brother to be your lobbyist and start contributing cash to the campaigns.
completely with you re AirBnB.but gotta squawk at the genie metaphor. genie’s are put back in the bottle all the time. even disruptive technology genies. especially disruptive technology genies. why? because the positive change brought by the genie is determined to be less than the negative.couple examplesThe Concorde – supersonic flight radically reduces travel times but deemed unacceptable to residential areas around airportsDDT – eliminated malaria in North America… but now deemed detrimental to the environment so malaria rages in Africa etc.Automated mandatory shoulder restraint safety belts in cars – radically reduces death and injury in accidents, but deemed too inconvenient for driversHormone replacement therapy – standard widely proscribed and accepted treatment for menopause related maladies, as well as preventive treatment for heart disease and memory loss. Now considered too risky for most candidates.I, for one, want to live in a world where technologies are not simply accepted as good because they are popular. I am willing to risk slowing down the pace of innovation sometimes for reasonable review and study and input from various constituencies, and perhaps, regulation. For me, that is pretty much the essence of a functioning democracy.
excellent counters Steve. as JLM would say “well played”
Many of the examples that can be given (such as the above) really go to the “devil is in the details” which is why it’s hard to have a broad stroke with this.Some things that matter in terms of whether the genie can be put back in the bottle (which relate to some of your examples):1) How much money is being made or is involved? Money buys lawyers and can stall things. This happened with the NFL and head injuries (stalled things for 20 years see the excellent PBS Frontline on this that just came out).2) How many people are affected?3) Are the people affected able to band together against the change? Do they care enough to band together?4) How important is it to the people affected? (Relates to #3) In other words how much pain or pleasure does it cause them? Is it major or minor?5) Are the people affected voters? (Think of what happened to napster).6) Are the people making money able to band together?7) How much time has passed? (How far down the slippery slope are you)? (Reason to “nip it in the bud” much harder to stop something de facto grandfathered).8) How “important” are the people affected? (Doing something on the Upper East Side in NY is going to be harder to pull off than in crappyville).9) The will power and organizing abilities of the various stakeholders.10) All that politicians stand to gain or lose.And so on, just off the top. It’s all nuance.
Completely agree with this. I tried applying the metaphor to private driver services in Paris (there’s a big fight between taxis and chauffeur services right now) and it looks like the incumbents are going to come out ahead: https://medium.com/personal…
Fred, we don’t want transients in our buildings for security reasons as well as others. That is why we have doormen for security. People like AirBnB do not respect our desire for security.I suggest that elected representatives of our city and state respect our wishes for security and privacy in our apartment buildings.I wonder if you have polled a lot of women and the elderly about their opinions about having transients living in their buildings.
it’s an issue vetting. if Airbnb doesn’t cut the mustard then ankle biters with a more refined filter will move in and satisfy the market.
what we need is transparency in the lease. when you rent or buy an apartment in NYC, you should know if there will be people in the building renting out for short stays. if you don’t want that, you should not rent or buy in the building. same for the person who wants to be a host on airbnb. they should know coming into the building if their activity is ok or not.as i said in the comment above. some will pay up for a locked down building. others will pay up for the ability to rent out their placewe just need the transparency for everyone involved to know what they are getting into.we do not need to make the activity illegal. we need to make it legal and transparent and open to everyone to make their choices.
when you rent or buy an apartment in NYC, you should know if there will be people in the building renting out for short stays.This assumes of course that the people reading the lease (or condo docs) have enough life experience or intelligence to know the implications of having people in the building renting out for short stays. In the case of some younger people I’m not sure, in fact, I’m pretty sure that is probably not the case. After all some of these people see no threat at all in having complete strangers in their place something that others (who have been around the block) find totally distonic.There are many laws on the books to prevent people from their folly or stupidity. This may or may not be one of them and in may even be in place for the wrong reason. But I don’t think that you can simply say “transparency” because by that logic there are many things you could foist upon the public by just disclosing it. “Ride at your own risk”. A case of this is with shore condos back when I bought one many years ago. One building allowed people to rent out for as short as 1 week. The one I purchased in said “1 year min lease”. The idea being to prevent transients. I immediately saw the problem with short term rental as being undesirable. Many did not. Not everyone thinks things through or cares about the same things. Many people who bought the “1 week ok” probably realized after the fact that it wasn’t a good idea to have all that traffic in and out and no stability in the building.
This is the argument for so many a needless regulation. People are too stupid for their own good etc. People that have a rational or irrational fear of strangers can avoid hotels and avoid housing that permits guests orsubleasing. If we asked the government to pass laws to protect everyone from everything we are too stupid or lazy to determine for ourselves the list of regulations would be longer and more complicated than the lease you are concerned other people won’t understand.
If we asked the government to pass lawsWho is talking about passing new laws?We are talking about laws that already exist and have been duly passed after various stakeholders have considered the pros and cons.Or stakeholders have been asleep at the switch or weren’t yet born. So if they want they can work to convince others and get the law overturned. But for now there are laws.I am firmly in the camp of not being able to have property which was intended for long term usage used for short periods of time. Unless designated that way from the start (there are hotels that have residential units for example).Real estate is special in the sense that it isa) expensive andb) not liquid – that is it is not easy to get out of and/or move from.As such this is not the same as “ok so there was a noisy kid at the table next to us and it spoiled our Saturday night”.This is “disruption and lack of quiet enjoyment from something we are now on the hook for and can’t move from”.
OK, re: new laws you have me there. To clarify, whether new or existing I think property owners should have the right to lease long or short with the government not being involved. I agree with you that this issue may be bigger than nuisance complaints (for some) but I dont see the need for refulation. If incidents occur and parties are injured they can file suit. If they are not happy with the living conditions they can regulate with their feet. I disagree that it is difficult to move or to address the problem in civil court.Re: scarcity of NY housing… Look to your regulators on this one! Supply has not met demand and the reasons why are because of NYC’s … Wait for it… Ridiculous and complicated zoning regulations, land use regulations, and construction expenses (also driven up by regulations).What will increase supply is to eliminate the same kinds of laws you are defending here!http://www.manhattan-instit…
If incidents occur and parties are injured they can file suit. If they are not happy with the living conditions they can regulate with their feet. I disagree that it is difficult to move or to address the problem in civil court.Have you ever filed a law suit in civil court?If so for what problem (any problem not housing specific) and for what amount?I have never come across anyone who has done so and found it to be a easy process.Because it’s not a trivial process and it’s not cheap with respect to cost or time.The problems in NYC with housing are pretty unique in the sense that it’s a place that many people want to live as opposed to have to live there (because they grew up and/or have family there). As such perhaps they should consider before stuffing themselves into the city the fact that housing is a problem (in other words think about this in advance).I’d love to live in NYC. But it’s to expensive for what you get for the money. The people who decide (once again who don’t live there now) need to consider the cost of living in NYC as a factor in whether they should live there or not. And perhaps choose a place that is more affordable regardless of whether something can be done or not with bringing additional housing into NYC.
I will admit to enjoying this dialog. No I have never filed suit. I have however defended myself in civil court. It was NOT an enjoyable process andmost ceertainlyscertainly is not an experience I’d look forward to repeating. It was over a housing dispute for the record. The amount was $1544.30–to be transparent but I don’t think the amount is germain to our discussion.As you indicated it was not an easy process. And don’t get me wrong, I’m not advocating our tort system in and of itself. I’m just saying that civil courts (for all their flaws) are preferable to state involvement and government regulation.I do not live in NYC. I love NYC and visit often there for business. I have been offered mutlitple jobs in NYC. Every time I have been honored with such an offer I have done the math, and despite the higher salary the math has said “you’d be crazy to accept this offer” due to higher taxes and a vastly higher cost of living. When I got a job offer to move to Austin for higher pay, a lower state tax burden, and lower cost of living it was a no brainer for me.I agree that NYC is way too expensive to live relative to the quality of living and what you get for your money. And the state and city income taxes are prohibitive relative to other places. I think the math shows that excessive regulation is to blame for the cost of living (per my last post)–and income taxes are an obvious deterrent relative to other locations–but to keep our discussion topical; everything that is emblematic of why an individual would choose to live somewhere outside of NYC is a result of your (I think) and others’ argument against airbnb.
I think the math shows that excessive regulation is to blame for the cost of living (per my last post)-One thing I would like to point out that I have found true is that when you get any group that is large you get statistically things that happen (that don’t happen in smaller groups) that cause laws and restrictions to be put in place.So a SMSA with 18 million people has a whole boatload of things that happen (because there are so many people doing so many things) that a small community doesn’t (because maybe they haven’t run into it “yet”).On a smaller scale I found this to be true at the small school I attended vs. the much larger public school. There were rules at the small school that weren’t needed simply because the bad situations hadn’t happened yet.(I enjoyed as well).
The transparency issue in theory could work were it not for 1) the extremely tight apartment and housing market in NYC, esp. in Manhattan and 2) as pointed out by another commenter, a lot of (young) people may not have enough life experience or may have come from smaller cities and not be aware of the safety implications of New York City. Even among large cities, NYC is very dangerous: the homicide rate of NYC is *five times* the rate in London: 5.1 vs. 1.1 (in absolute terms 414 murders vs. 89 – source Wiki for 2012). Other forms of violent crime are of course higher as well.A huge problem is that AirBnB has no “skin in the game.” AirBnB should take out a $100 million bond to pay out people that are harmed in some manner by AirBnB screened transients. For example, a $20 million payout for murder, a $5 million payout for violent crime, etc.). The bond could be some sort of insurance paid for by an insurance company such as Lloyds if another firm is unwilling to insure the risk. If the risk of violent crime (or robbery) is deemed low, then AirBnB should be able to get the bond for very little money while at the same time demonstrating their confidence in their system.Have you polled gotham gal and her female friends (and also young mothers) regarding their opinions of having transients living in their buildings?
The bond is not necessary. I am willing to bet that airbnb has insurance to cover civil suit that could fall out from incidents you are suggesting. The way to deal with this is in civil court and not through federal regulation.This may be semantics, but your use of the word transient I think is an attempt to denigrate the average airbnb user. I don’t think there is any reason to suspect the average airbnb user poses any greater security risk than the average tenant or guest of a tenant. I don’t see why your appeal to women (borderline sexist) and old people makes your case any stronger; there is no evidence to show they are any worse off than they already are. I believe you personally have a dislike for short term guests being in your building. You can address this by moving, or by filing suit with your landlord for any damages. And feeling insecure is not a form of damages insofar as I know.
Like many New Yorkers, I do not mind short term guests in my building that are friends, etc. of my fellow tenants. I (and other New Yorkers) do mind strangers being in the building. People living in these buildings are vetted by landlords or coop boards, etc. and in order to rent an apartment in Manhattan you have to have a good credit rating.Women and the elderly are more likely to be the recipients of violent crime than adult males. I should add that children in the building are of course at higher risk as well.I believe that a significant number of the people commenting here that are for lessening the security of people who live in NYC do not actually live here. I wonder how many of the signers of above mentioned petition actually dwell in buildings in NYC where their security would be lessened. You did read in my previous comment that NYC has *five times* the murder rate of London.As for a bond vs. civil suit, I don’t think that AirBnB has insurance that covers $20 million for death or $5 million for being subject to violence and as pointed out by others, a civil suit would entail a great difficulty on the plaintiff. At any rate, if AirBnB is covered by insurance, then taking out a bond with payouts as I have suggested would not cost them anything and at the same time demonstrate their confidence in their screening model. Put your money where your mouth is.
I’m not one to tell another person what they should be comfortable with. If you don’t feel comfortable or satisfied with your living arrangements I would encourage to seek out accommodations that suit you. This is the function of the free market. When you attempt to regulate the voluntary transactions of others through force, whether I live in your zip code or not, that is when my philosophical perspective encourages me to speak out.Again, you continue to raise the specter of the female/octogenarian victim of attack from, as you put it, “transients” and “strangers”‘ ostensibly from airbnb consumers.Unfortunately the facts don’t support your irrational arguments; 80% of violent crimes are perpetrated by friends/family/acquaintances of the victims; statistically you are safer with a stranger. This has been established by qualified research, as compared to your stated “belief” that NYC residents’ security is put I’m jeopardy by airbnb.Regarding your postulations about airbnb’s insurance coverage, your $20 and $5 million dollar figures ridiculous. Insofar as I can tell you fabricated them. So whether their insurance policy covers them for that is as irrelevant as your fantastical math.
.The big issue in real estate is always when a conveyance document or a lease is SILENT on a matter.It should be the policy of the law that when a contract or lease is silent on a matter then it is to be interpreted to the best benefit of the entity that did NOT draw the contract.This is a simple contract law principle.JLM.
This is precisely correct. As I was reading through the comments this point was conspicuous by its absence. Glad you added it.
Sounds right but won’t happen here at least.There is never enough supply and the force of law and power go with the property owners always.
This is airBnb”s Achilles heel.If owners make the anti-airBnB clause a boilerplate provision, its all over.
For most part (genie) agree with you, though I understand @falicon’s point of making sure about ops. You could end up with genie where 1% of code lines in error are 5 million and probably tip of iceberg.
One of the biggest problems I see with Airbnb in New York is , most people do not actually own the dwellings they are renting out.They might own their little space, but the rules here are tight about who gets let in blidgs, boards, etc. And then the legal issues of plain renting short term. Co-ops, Rental apts, sublets, those are legally owned by the shareholders in the bldgs or big companies. Those people have a say. There are very tight sublet clauses. So a swinging door of people?????Here I do take a conservative view – do I want anyone in my bldg renting to just anyone they don’t know? Absolutely not. I’m sure nine out of ten times it’s fine, but I’m on the side of cautious, that tenth time I worry about.Do I want my kids alone on the floor if some crazy is camped out in the next apt? No way.If you own your own freestanding home you can do whatever you want. if you share a building with many I don’t think taking in anyone you don’t know anything about is fair to others. Sorry. But, hey, I was wrong about Citibikes. One big robbery or rape that gets enough attention and the thing will be in for serous rehauling.
Rapes in America ?? I thought it only happens in Asian countries.. So Airbnb is fine in this part of the world
Yesterday we took a serendipitous ride up the Delaware Water Gap on the Jersey side and after 3-4 miles on a poorly marked and maintained desolate, gravel road (my daughter reminded me of all the cannibals and zombies west of of the Hudson, haha) we came upon an annual encampment at the Van Campen Inn and learned about a “yaugh” or hunting house that “had” to take in strangers in the 18th century. http://bit.ly/18CHTFm As a result, during the French & Indian War (which my 14 year old immediately told me was started by none other than the venerable G Washington) as many as 130-150 people resided in this house.
.Your daughter knows her history.The F & I war was the North American theater of the Seven Years War and a 22-year old GW did initiate hostilities when he ambushed a French patrol in what came to be known as the Battle of Jumonville Glen.A lot of people do not know that GW was a warrior at a tender age and was the most experienced military officer in the Colonies at the beginning of the American Revolution.As it turned out, he was both an entrepreneurial startup guy — Hell, he raised the damn Continental Army almost singlehandedly — but also a very good strategic and tactical commander.Have to love that traditional Colonial architecture.JLM.
speaking of buying and letting, have you considered jumping on the London property boom bandwagon? Mike Bloomberg has a $20mm pad there and pays virtually zero tax. quite the fashionable investment.
I believe other commenters have mentioned this, and I’m playing devil’s advocate, but doesn’t this logic get a bit dangerous when you’re talking about breaking the law? The law AirBnB is breaking in NY State deserves to be revised, I think we can all agree, but it still IS the law. And if startups should feel empowered to disrupt an industry by breaking this law, where does the line get drawn where it’s no longer okay to break a law when disrupting an industry?
I can’t live without Airbnb now when traveling. Used Airbnb to find places to stay in NYC and Montreal this past summer/fall – it’s simple, curated base of mostly trusted people.I do have my complaints with how it’s managed – it’s managed in a “big business” way now – which leaves room for great improvement, though they won’t shift on their own – maybe not ever, so I see room for disruption there anyhow.
“So if you have an idea that is truly disruptive and will make a lot of people uncomfortable and against you, the key is to get it out there as quickly as possible. Because if you have millions, or ideally tens of millions or hundreds of millions, of happy users on your side, the forces that will want to shut you down will be unable to do so.”This is an important lesson, and ones where people lost their lives too when there wasn’t a large enough following – mainly thinking of those countering religion with science – however there are similar situations today.
Good one. Deserves a good tune! https://soundcloud.com/tyle…
Great music. So glad you provided the link!
You’re welcome @lavonnereimer:disqus 🙂
Fred, earlier this year I tried to convey the same point across a few areas that will butt up against government regulations (and mentioned Nick’s work at USV). Another reason the genie can’t be put back into the bottle is that these new companies provide much-needed income streams during a time of dangerously high income inequality. Shutting off these faucets would be politically risky: http://blog.semilshah.com/2…
Does anyone have any actual data on what % of leases in NYC already have a clause relating to this?(Of course then it’s not an issue for the AG.)
The social and mobile web put the genie in more hands than ever. It’s frightening. but uberlicious (hailolicious)
I bought my first place in Barcelona, late 2007. It was to be my home while at University. After my first year HomeAway was brought to my attention and I decided to test renting my place for my second year of uni and moved in with friends. At January 2013 I had over 200 bookings (9 of which came from Airbnb). The apartment has generated north of €80k in revenue (more data attached as screenshot for those interested).European cities have also been on the receiving end of pressure from Government and incumbents. However a global market for short term rental has been built with several companies playing a big part. This genie is long out of the bottle and I can’t help but thinking more about what’s next…Im waiting for a new wave of companies building interesting services for the short-term rental market. As a host I still manage the business in email and google spreadsheet. Caveat – we now manage 12 properties. As a host I feel there is lots to be done to help us run our business and become even better hosts.Let me take this opportunity to say hello to the AVC community and to Fred. I finished uni in 2010 and since then started my real education. Every penny I have made since 2008 has gone to starting two startups and during this phase I became an avid reader of AVC. Given the topic I felt this was as good a time as ever to post my first comment 😉