Union Square Ventures VC Fred Wilson (who was featured in the Silicon Alley Reporter 100 list we rehashed today) wrote a post this week about what sounds like it might be his biggest regret as an investor: Passing on Airbnb, the San Francisco-based company that built an online marketplace where people can rent and list extra space, enabling anyone to run a bed-and-breakfast.
“We couldn’t wrap our heads around air mattresses on the living room floors as the next hotel room and did not chase the deal. Others saw the amazing team that we saw, funded them, and the rest is history. Airbnb is well on its way to building the ‘eBay of spaces.’ I’m pretty sure it will be a billion dollar business in time,” he wrote.
Today, Y Combinator founder Paul Graham published, with only one redaction, the email exchange he had with Mr. Wilson and Airbnb founder Brian Chesky at the time. “It’s a longshot, at this stage, but if there was any VC who’d get you guys, it would be Fred. He is the least suburban-golf-playing VC I know,” Mr. Graham wrote. “He likes to observe startups for a while before acting, so don’t be bummed if he seems ambivalent.”
Unfortunately, Mr. Wilson was not down enough to get the concept. “It’s interesting. Our two junior team members were enthusiastic. The three ‘old guys’ didn’t get it,” he wrote.
Oops. Airbnb pulled themselves up by their bootstraps, selling breakfast cereal to keep themselves afloat before they got into Y Combinator. The recession made people more open to renting or leasing extra space to strangers, and the service found accommodation for a significant number of attendees at South By Southwest this year. “We had 571 homes, apartments, airstreams and rooms booked for SXSW. The majority of the spaces were private homes and apartments. We estimate that over 1,500 SXSW attendees were using Airbnb for their accommodations,” Airbnb told Betabeat.