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  • Facebook’s “fuzzy” math: There’s just no need

    1:55 pm on February 19, 2012 | No Comments » Permalink | Reply
    Tags: Active Users, , Groupon, Investors, IPO, Valuation

    Did we learn nothing from the dot-com bust just a decade or so ago? Have we not learned lessons from the financial meltdown of the past few years? Or is that push for “Mo’ Money, Mo’ Money” really so strong, that we’re willing to let financial fairy tales distort our perception of what’s really in front of us. 

    I’m talking about bringing back some honesty to the world of business, some transparency that keeps companies from exaggerating their financial health and exposing the markets to unnecessary risk. Case in point: Facebook and its upcoming Initial Public Offering. 

    Washington Post columnist Barry Ritholtz had a great piece last week about Facebook and a set of non-financial numbers might raise an eyebrow of the real growth potential of the social networking giant. He looked at the way Facebook counts active users and, more importantly, how they define those users. 

    Facebook has become just as much a “platform” as it has a destination site, allowing people to interact with Facebook without actually visiting Facebook. Have you ever clicked the “Like” button at the bottom of an blog post and had it show up on Facebook? Sure, you have. But you didn’t go to Facebook.com – the actual site – to do that, did you? Consider this excerpt from the Post column: 

    Why does this user-behavior metric matter? Consider what it means in terms of how “daily users” will generate revenue and profits. If all users do is click a “Like” button, but never make it to Facebook.com, they cannot be “monetized.” They cannot be marketed to. They do not see any advertising. They cannot be sold any goods or services. They take advantage of FB’s extensive infrastructure to tell their FB friends (who may or may not see what they did) that they liked something online. That’s all that happens. So they not only fail to generate revenue for Facebook that day, but they are actually a cost. It’s not cheap to maintain that massive infrastructure of Like buttons everywhere.  

    Now, if I’m an investor, this is important to know. Once investors start breaking down this information on a quarterly basis, via public filings, these are the sorts of questions that Facebook will have to address, especially if the financials don’t meet the expectation of the hype. Companies learn those lessons everyday on Wall Street. Just ask Groupon investors. 

    Don’t get me wrong. I made a conscious decision a long time ago to run my business in a manner that doesn’t have me answering to investors. And I’m happy with the way my company has grown over the last decade, in part because of that decision. But that what was best for me and my business. I’m not here to question Facebook’s decision to go public.

    What I am saying, though, is that businesses today need to be more responsible and transparent. We’ve seen what happens to businesses when they’re less than fully honest about the bottom line, the number of users, the growth forecasts and more. Some companies only talk about products “shipped,” instead of products “sold.” I can ship a million products, but if I don’t sell any of them, I’m not making any money. 

    I guess this really gets to me because Facebook is undoubtedly a great company with amazing growth potential. Why does anyone feel the need to incorporate “fuzzy” math into it? They’ve achieved critical mass and are on a growth trajectory that’s redefining the Web, marketing and advertising and even parts of the global economy.

    They don’t need to operate in a manner that indicates the opposite, that sets them up for a “gotcha” moment by analysts, bloggers or the government. They don’t need to cloud the picture for consumers or investors or even themselves. 

    The housing market and the banking industry operated for years behind cloudy pictures and fuzzy math and look how that turned out. If ever there was a company that could be honest and transparent without compromising its potential, that company is Facebook. 

    And yet, we remain determined to repeat history.

     
  • Super Bowl in Indiana brings tough new human trafficking laws; Other states should take note

    6:01 pm on February 5, 2012 | No Comments » Permalink | Reply
    Tags: , Indiana, , Super Bowl

    Millions of eyes have been focused on Indiana for the events leading up to Super Bowl Sunday. It’s a major event for any region, with hundreds of thousands of people coming in for the big game and all of the festivities that go with it. Unfortunately, victims of sex trafficking rings are among those who arrive in cities where big events like the Super Bowl are hosted.

    But here’s a tip of my hat to the state of Indiana for really stepping up its game to send a message to pimps and johns who might be looking to solicit sex-trafficking victims, notably the underage girls who are forced into this world of modern day slavery.

    Indiana Gov. Mitch Daniels, just days before the big game, signed tough human trafficking legislation into law as a way of giving law enforcement officials and prosecutors the firing power to send a message that says, quite frankly, don’t even think about it. The new law closes previous loopholes and makes it easier to prosecute those who sell children into sex slavery rings. It also reduces the burden for prosecutors to prove coercion, which previously prevented traffickers from being prosecuted if the victim wasn’t being held against her will.

    More importantly, though, is the training efforts for non-law enforcement types, such as hotel employees and cab drivers, have received. These folks now know what to look for in a possible victim – young girls dressed inappropriately for their ages who appear to be quiet and insecure and who avoid eye contact. Likewise, they were warned about girls who fit this profile checking into hotels with no luggage. And they’re taught to understand that the victims are just that: victims, not criminals. These girls need to be rescued, not arrested.

    The Washington Post last week profiled the efforts of the religious congregations that bought shares of stock in major hotel chains so that they could be heard at the hotel executive levels about the responsibilities of the hotels in this fight. Many of the training programs were the direct result of this pressure campaign.

    For some time now, I have been sounding off to anyone who will listen about the responsibilities of online sites – including classifieds sites like Geebo – in preventing these sorts of encounters. Geebo doesn’t accept or post personals ads where these young girls are often advertised for sale. And I have personally called on my industry counterparts - notably Craigslist and Backpage – to do a better job of policing their site for possible human rights crimes.

    For the most part, my pleas have fallen on the deaf ears of my competitors. I guess there’s too much money to be made by selling those ads to be worried about the safety of innocent children being traded in sex slave rings. I can only control what happens on my site – but I’m proud to be a part of a growing effort to educate and inform folks about what’s really happening on these sites and how it can be prevented.

    This law in Indiana is a big positive push forward for our efforts – and I’m hoping that other states follow Indiana’s lead and get serious about laws that send “You’re not welcome here” messages to sex-trafficking criminals.

    Los Angeles Times: Super Bowl: Backed by tougher Indiana Law, nuns target sex trade

     
  • More backlash against Backpage as founder’s son calls for end to sex ads

    5:45 pm on January 18, 2012 | 1 Comment » Permalink | Reply

    Village Voice Media has reached a new low.

    The youngest son of Village Voice co-founder Norman Mailer is calling on the executives of the company to preserve the legacy of the company that his father worked hard to build and, once and for all, pull the plug on the adult advertisements on backpage.com, the company’s online classifieds site.

    Specifically, John Buffalo Mailer chastised the company for trying to offset the financial hardship facing print publications by selling advertisements that are being used to buy and sell children for sex. He joins a growing group of people who want backpage to shut down those ads, myself included.

    Unlike other approaches, which have tried to tug at the moral conscience of the company’s executives, Mailer reminded them that his father co-founded Village Voice as a publication of the people, one that held the power-holders accountable for their actions. In a statement, he wrote:

     “As my father’s son, knowing all of the hopes and dreams that went into the work of creating this particular paper, the Village Voice appears to have lost its way from the days when Dan Wolfe, Ed Fancher, and my father began it,” he wrote. “For the sake of the Village Voice brand and for the sake of the legacy of a great publication, take down the adult section of Backpage.com, before the Village Voice must answer for yet another child who is abused and exploited because you did not do enough to prevent it.” 

    So far, there’s been no reply – though that doesn’t shock me. 

    Village Voice executives have pretty much sold their souls to the devil for the sake of staying afloat. As Mailer notes, the legacy of the publication is being tarnished. And every time an executive speaks out to defend their actions, it’s another black-eye for the legacy of the Village Voice.

     When I made my decision to pull personals ads from Geebo in 2010, I knew it would affect my bottom line – but I also knew that I wouldn’t be able to look at myself in the mirror every morning if I knew that there was a chance that an innocent child had been bought and sold for sex through an ad on my site. 

    I don’t know how the folks at Village Voice are able to do it – look at themselves in the mirror, that is.

     Related post: Business decisions can be driven by moral values. Will Backpage step up to prove it?

     
  • Personal rentals: A quick buck with a lot of hidden risks

    2:57 pm on December 2, 2011 | No Comments » Permalink | Reply

    When the economy is in the tank and money is tight at home, people can do some out-of-the-ordinary things to make an extra buck – like pimping out the family dog or letting a stranger rent your car for a week. 

    Such was the story of Rob Baedeker, a self-described “rentrepreneur” from Berkeley, Calif who penned an article in Newsweek magazine last month about his new money-making adventure. Baedeker rents his stuff – anything and everything imaginable – to anyone willing to pay. A doglover whose landlord doesn’t allow pets rents Baedeker’s border collie for $6 for a couple of hours of playing fetch in the park. For $18, he lets a group of strangers use his backyard deck for a Sunday afternoon party.  For $25 per night, he provides an air mattress in a spare room for a stranger seeking a hotel alternative. 

    Renting out your own stuff, I suppose, is no different from lending a a hedge trimmer to a neighbor, for example. Opening your home to a stranger for the night the way you would a relative or close friend, however, is quite different. Still, if he’s OK with that, who am I to criticize? After all, Baedeker is just being entrepreneurial – and his article in Newsweek is a fun piece that paints a rosy picture to suggest that you could also start raking in big bucks if you did the same. 

    That’s where I have a problem with all of this. You see, what Baedeker doesn’t include in his article – and Newsweek’s editors apparently didn’t consider necessary – was an acknowledgement of the risk factors involved with some of these rental transactions. 

    Here’s what I mean: Baedeker boasts a $150 windfall from renting his old 1992 Saab to a woman from France who will be spending a week in San Francisco for an art show. But renting a car is quite different from renting out a belt sander for a few hours. Let’s consider some questions that I would ask before even thinking about handing over my car keys. 

    Does this woman have a driver’s license that’s valid in the U.S.? How’s her driving record? Does she have a history of reckless driving or, worse yet, DUIs? Does she have any experience driving in San Francisco? What if she gets a parking ticket? What if she hits a light pole? What if she hits another car? Actually, forget the car. What if she hits a pedestrian? What if someone gets hurt? What if someone dies? 

    Sure, you can call me an extremely paranoid “what-iffer” if you’d like. But these sorts of things happen all the time. (Just ask a parent with a new teenage driver about all of the “what-if” thoughts that go through their minds.) What would Baedeker do if lawyers representing an insurance company filed suit against him on behalf of the child who was injured by the driver of his car? Would his insurance policy cover that? Knowing what I know about insurance companies, I would guess the answer to that question would be no. 

    As a responsible adult, you just cannot afford to dismiss or overlook any possible scenarios. Earlier this year, I chimed in about some controversy over a site called AirBnB, which connects people who are looking for a hotel alternative with people who are willing to open their homes. As expected, there was an incident with a home being trashed. And yes, lawyers got involved. Today, AirBnB is still around – in fact, Baedeker references him in his article – but they’ve learned from their mistakes. 

    I would certainly never try to rain on the parade of an entrepreneur. But any good entrepreneur needs to know about the risks involved with a business venture so that they can be weighed and considered when making a business decision. It seems to me that Baedeker is just having some fun and making a few bucks along the way. 

    That may be all fine and good – but if something goes wrong, just know that the $150 Braedeker pocketed with that car rental isn’t going to be nearly enough to take care of the financial nightmare that could follow.

     
  • Business decisions can be driven by moral values. Will Backpage step up to prove it?

    2:02 pm on November 18, 2011 | 2 Comments » Permalink | Reply

    It looks like Village Voice Media has backed itself into a pretty tight corner – and I suspect that the spot light that’s been shining on it recently is starting to make things a bit warm and uncomfortable right about now. 

    Village Voice Media, of course, is the owner of Backpage.com, an online classifieds site that has developed quite the reputation for being friendly to listings that solicit prostitution and facilitate human trafficking against women and children. Earlier this week, protesters – including celebrity Alicia Keys- staged a demonstration in front of the company’s New York offices, calling on them to quit enabling sex traffickers. 

    Village Voice executives, as you can imagine, are fighting back to squash such perceptions of their business practices. They’ve pointed to a policy of working with law enforcement to deter solicitation of children. They’ve attacked their critics, arguing that human trafficking assertions are over-exaggerated. And they’ve even lashed out at a group of clergy who called on them to change their business practices by declaring that “neither government officials nor God’s advocates can dictate such arbitrary control of business or speech.” 

    Believe it or not, I actually understand – from a business perspective – why Village Voice is reacting the way it is. It’s future depends on it. 

    You see, these sorts of ads bring in big money for the company – estimated to be roughly $23.5 million annually – and execs cannot afford to lose it. Alternative-weeklies haven’t fared well in the changing media landscape and this lucrative forum for sex ads is one of the last lifelines for the company. 

    For the longest time, Backpage was able to quietly collect on an online cash cow while Craigslist – viewed at the larger marketplace for this illegal activity – absorbed much of the criticism from human rights activists. But then Craigslist caved to the pressures of public opinion, government inquiries and business backlash and pulled the plug on its “Erotic Services” section (even though some argue that the ads have since found a place for themselves in the “Personals” sections.) Since then, the pressure has shifted to BackPage. 

    Following Craigslist’s lead by pulling these ads or even by investing money to review ads and keep questionable ones off the site can be poisonous to Village Voice’s bottom line. Village Voice execs are facing a big dilemma – either risk the public backlash by continuing to do what they’re doing or pull the plug on a significant revenue source and allow a decision based on morals and values trump one that’s driven by business interests alone. 

    You might think it’s an easy decision – but it’s not. I’ve been there. 

    It’s been more than a year since I pulled the plug on Personals ads on Geebo – a gesture toward our commitment toward social responsibility, not a reaction to a problem with questionable ads. Since then, I have called on my industry counterparts to do the same – to put human rights in front of business dollars. To date, none have responded to my challenge. 

    I also understand why that decision may have been easier for me than it might be for others. Backpage is owned by a media company, which has investors that are expecting strong financial performance in exchange for their dollars. They are looking for a return on that investment – and shutting off a revenue pipeline for moral reasons doesn’t help them achieve a lucrative return on their investments. 

    Personally, I’ve distanced myself from investors largely for that reason. I want to be able to make my own business decisions without input or interference from investors who really only have one concern – the payback. I want to be able to make business decisions based on morals and values. 

    I want to be able to sleep with my own conscience every night.

     
  • Police task force scours craigslist to recover stolen goods; What is craiglist doing to help?

    4:25 pm on November 3, 2011 | No Comments » Permalink | Reply

    If a police detective ever referred to Geebo as “the ultimate pawn shop” and a police task force had to be created because of the criminal activity being conducted solely on my site, I think I would seriously think about closing up shop and walking away with my head held down in shame.

    Yet, my counterparts over at craigslist seem to be OK with that negative stigma attached to their site. The company was recently the basis for a segment on ABC News, centered around a Portland, Ore. police task force that’s recovering stolen property that’s being sold on craigslist.

    You see, because it’s so easy to buy and sell on craigslist without any accountability, it has become the marketplace of choice for criminals – and that’s made it easy for burglary victims, as well as police, to recover the property. Police in Portland boast a success rate of about 80 percent. That’s pretty good and I’m sure the victims are pretty happy.

    But watch the ABC news clip and tell me if you notice what I noticed.

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    In the two sting operations that were aired, neither of the sellers turned out to be the thieves themselves. In fact, one was reportedly a victim, as well – or so it was reported. So, while the police were able to recover the property – which is a good thing – they didn’t make any arrests.

    Here’s my question: What is craiglist doing to deter criminals from using its site to peddle stolen goods? Is it reviewing ads for possible red-flags, the same way the cops are? I mean, come on, the police are getting better at identifying possible stolen property in the ads – high-priced items listed at fire-sale prices with very little details about the items. Are these items often posted by the same email addresses? That’s only something craigslist would know.

    If criminals knew that craigslist and police were working together to deter the selling of stolen goods on the site, don’t you think the activity would come to a halt – or at least slow down? But it seems like the cops are on their own here – and taxpayers are footing the bill. Police resources are thin these days and here we have an entire task force devoted to criminal activity being conducted on one site.

    What a waste.

    Related: ABC News: What to do if you find your stolen property on Craigslist.

     
  • Remembering Al Davis: More than an owner; More like a legend

    6:37 pm on October 14, 2011 | 1 Comment » Permalink | Reply

    I’m an Oakland Raiders fan – have been since I was a young kid growing up in Northern California. In recent years, people have been surprised to hear me declare my loyalty as the team was sacked, blocked and otherwise beaten down one game after the next. But I’m proud to say that I never gave up on the organization – from the players all the way up to Mr. Davis.

    You see, unlike a lot of my Silver-and-Black brethren, I was also a big fan of Al Davis, the man at the top of the Raiders organization. As we know, Mr. Davis passed away days before the Raiders faced the Houston Texans in what turned out to be a thrilling game. I even loved some of the commentary after the final play of the game, with the thought of divine intervention by Al Davis to make sure that the boys would “Just Win, Baby.” 

    You see, Al Davis was the Raiders. He turned them into the organization that they are – the team that gets a bad rap, the team that everyone else loves to hate, the team that may not make it to the playoffs but will ruin it for a rival by winning a final week game that everyone had already written off. And when they’re in their glory, well… there’s no living with a Raiders fan at that point. 

    That’s why I could never understand how anyone could say they love the Raiders but hate Al Davis. It just doesn’t work that way. 

    Personally, I had a deep respect for Mr. Davis. He wasn’t afraid to zig left when everybody else zagged right. That shows great vision, character, strength and just plain guts – doing the right thing when it’s not popular. Without regard to public opinion, including his own Raider fan base at times, he did whatever he thought was best for his team. To the end, his “Just Win, Baby” mantra guided his life, his team and the way he conducted business. 

    In some ways, he was also a business hero of mine, someone who inspired me to zig left in business while my counterparts zagged right. A CNN reporter once called me “crazy” for trying to challenge the mighty Craigslist over their site content.  But it doesn’t bother me one bit – because I know that conforming to the ways of others isn’t how you measure success and failure. 

    The Raiders are off to a strong start this season – and I’m right there with them, a former season ticket holder (my name is on a plaque at the Coliseum) who has since landed in the Washington DC area but maintains his loyalty from afar via Directv’s NFL Sunday Ticket. 

    I’ll fly out west for a game later in the season, just as I do every year. But I can’t help but wonder if it will feel different there in the Coliseum, somehow, without Mr. Davis behind the glass in his suite, overlooking as the Nation cheers on the Silver and Black.

     Rest in Peace, Al Davis. You created a legacy. We’ll help you keep it alive.

     
  • An investor-free company has flexibility to adapt, grow and succeed

    10:28 am on October 3, 2011 | 2 Comments » Permalink | Reply

    I’m often asked about who’s investing in Geebo and my response sometimes catches folks off-guard.

    Geebo isn’t a company that was built out of big outside investment dollars. It started modestly as a grassroots effort and has built itself, some 10 years later, into a solid business. More importantly, it’s a company that answers to its users, not its investors. And I think that makes it even stronger. 

    Certainly, I’m not looking down on companies that take investors’ money to grow their businesses – quick cash can be a way to fuel some quick growth and hopefully some traction in a competitive marketplace. But, I’ve also always subscribed to the theory that an investment of your own sweat and money will make you work harder and offer more rewarding returns. Plus, there’s no guarantee that those investment dollars – and the investors breathing down your neck for results – will actually do anything to advance your mission. Some hard work and determination – and your own money – will make you work. 

    Over the last several years, many of my competitors have collectively raised more than $100 million to challenge Geebo, Craigslist and others in this space. But that hasn’t necessarily given any of them an edge. One of those sites, Edgeio, for example, has since failed, despite an injection of $6.5 million in capital. 

    Meanwhile, Geebo remains on solid ground, growing the way we intended when the site was launched more than 10 years ago and taking some risks that might impact the bottom line in the short-term but will create greater value for the long-term. 

    Deciding, for example, to remove personals ads from Geebo at a time when that part of the business was becoming quite lucrative for other sites, was a bold move for us. It was a moral move that allowed us to go home at night with a clear conscience about our impact on the safety of the users. Others, whose users have been the victims of violent crimes, cannot say the same. 

    One of the reasons Geebo can take such risks is because it has never been influenced by outside investors whose interests are in making as much money as possible, as quickly as possible. From the beginning, Geebo employed a “percolation” strategy for growth and set our sights on building value for our users. 

    That’s not just some marketing message at Geebo – we don’t just “talk the talk,” we “walk the walk” when it comes to our commitment to customer satisfaction and social responsibility. We don’t make our business decisions lightly – whether adding a safety feature, venturing into a new partnership or killing a section like personals – and try our best to be transparent with our customers. 

    We want them to hold us accountable. 

    Related posts:

    Why won’t Geebo’s competitors take steps to keep their users safe?

    My challenge to Craigslist: Keep criminals off your site

     
  • Site reacts to bad PR with new safety features but Is it enough to rebuild trust?

    7:56 am on August 18, 2011 | No Comments » Permalink | Reply

    Why does it take some bad PR to shame companies into doing things that should have been done in the first place?

    Airbnb, a small start-up that fell into a vat of public relations hot water last month, has just launched a new set of features that are intended to protect its customers from being victimized by people they meet on the Internet. Yet, these new features are so basic that I can’t help but wonder why they weren’t part of the company’s original business model.

    Here’s the back story: Airbnb is a site that teams people who want to rent their homes or portions of it to strangers who will be visiting the homeowner’s town for a short stay – maybe a vacation or an overnight business trip or even just a lost soul trying to find himself on a cheap journey around the world. In theory, the site is an unconventional alternative to a traditional hotel room.

    Related Post: Learning tough lessons: Use caution, protect yourself when putting your home in online marketplace

    It’s a scary concept, for sure – but not unheard of. People rent out beach homes and mountain cabins all the time. The difference is that Airbnb customers are just regular people in their everyday homes who are basically putting out a welcome mat for a stranger on the Internet who is willing to pay the asking price. Scary, right?

    Earlier this year, the concept blew up in Airbnb’s face when a San Francisco woman who used the site to rent out her home returned to find that the place had been ransacked, robbed and vandalized. And while Airbnb initially had her back, the company seemed to turn against her – according to her accounts - when the PR hot water started to boil. Suddenly, she was on her own to deal with this problem.

    That brings us back to Airbnb’s new features. Since the incident with the San Francisco woman, the company has launched 20 new safety features. (It boasts that it is “delivering over 40 new features and services,” but I only counted 20.) On the plus side, features like address verification, video profiles and reservation requirements are probably effective at avoiding agreements with petty criminals or irresponsible college kids.

    But others, such as references, social connections and photographs, are easy for criminals to hack and manipulate. And then there’s that $50,000 Host Guarantee that’s like insurance but isn’t really insurance, but is subject to the terms and conditions, which still say that “the entire risk… remains with you.” Sounds like a lot of legalese intended to protect Airbnb’s interests, instead of the company’s.

    I’m not trying to be a glass-half-empty kind of guy nor am I trying to rain on the company’s parade. Believe me, I’m all for startups that are entering the market with unique, innovative ideas. But the responsible business owner has to think through the potential pitfalls of the business model. Anytime you facilitate the potential meeting of two strangers over the Internet, you have to think about the potential worst case scenarios.

    Related post: A partnership with WeGoLook brings peace of mind to classifieds

    It’s not like we don’t know the lengths that people will go to in order to victimize other people. We’ve seen example after example about victims being robbed, assaulted and even killed by people they met via craigslist ads. (This is one of the reasons that Geebo does not accept personals ads.) Maybe that’s why it bothers me that a company like Airbnb would launch a service that puts so much trust in complete strangers without these basic safeguards and protections in place right out of the gate. It’s not like there wasn’t plenty of evidence that people will victimize each other over the Internet if given the chance. Why did it take a tragic incident and a PR nightmare to push Airbnb into launching these features?

    Yes, there’s a bit of a bias here. In all honesty, I’m not a fan of the business model that Airbnb has launched – and that’s really only because I’m concerned about the users of the site. Read the story about the woman in San Francisco and then ask yourself if a $50,000 Host guarantee would make you feel any better if you were her.

    Yeah, me neither.

     
  • Learning tough lessons: Use caution, protect yourself when putting your home in online marketplace

    3:48 am on July 31, 2011 | 2 Comments » Permalink | Reply

    I can’t say it enough: the online marketplace can be a scary place, folks. And as much as you would like to put your faith in your fellow man, that’s not always possible. As private citizens, we need to take the steps to ensure our own safety and to avoid situations that potentially put us in harm’s way.

    Case in point: There’s a very sad and unfortunate story gaining traction on the Internet about a woman whose San Francisco apartment was ranscaked, robbed and vandalized by the strangers that she rented it to through a property-rental site called Airbnb. The site teams people who want to rent their homes or portions of it to strangers who may be in their hometowns – maybe vacationing, maybe hopping in for the night for a next-day business meeting or just a lost soul trying to find himself on a (cheap) journey around the world.

    For anyone who’s ever owned and rented out a ski cabin or beach house, these sort of deals are nothing new. But those folks know how to protect themselves – they collect deposits, they set rules and guidelines and they put it all in a legal, written agreement. Sure, they take a risk that a rowdy group of frat boys on Spring Break could destroy their property. But they protect themselves through insurance and legal options.

    I’m not here to bash AirBnB’s business model. But I will point out that it – as well as its customers – are exposing themselves to some unnecessary risks, including bad publicity. The site manages all aspects of the rental, including collecting the payment upfront and distributing it to the property owners within 24 hours of the renter’s check-in.

    Here’s where it gets squeamish: the only forms of communication between landlord and tenant ahead of time is through a messaging system on the Airbnb site. Once the two parties reach an agreement, then the site releases information like email addresses and phone numbers. And while the site encourages people to communicate with each other via the messaging system, it strongly advises them to not communicate offline or to meet face-to-face until the reservation has been finalized.

    Why on Earth would anyone ever agree to such a thing?

    As the founder of Geebo, I have gone to great lengths – everything shy of screaming from rooftops – for people to use caution when dealing with strangers in an online marketplace. While most folks out there are decent human beings who mean no harm and are only looking for a “good deal,” there are some who will use the opportunity to victimize another person. It’s sad – but it happens all the time.

    Earlier this year, Geebo partnered with a company called WeGoLook, which dispatches real people to physically inspect something that a person is considering buying through an online marketplace – a vintage car, perhaps, or maybe a rare collectible. The idea is that an independent person inspects the authenticity of the item in a safe environment – protecting the buyer not only from being scammed by a phony item but also from being robbed (or worse) when they meet to conduct the final transaction.

    What’s ironic is that folks laughed when we explained that WeGoLook’s services could also be used in the personals ads that are on other sites. (Geebo has chosen to not host personals ads.) Sure, maybe it’s unconventional to dispatch an independent third party to meet and interview a potential date – to make sure that the person on the other end of the potential encounter matches the descriptions and photos that have been exchanged. But, we’re talking about minimizing risk here, folks. What if that athletic, well-groomed, sensitive man in the photo turns out to be a frumpy unshaven couch potato with some body odor challenges and a violent temper?

    When you’re trusting people with your only real safe haven – your home – you can’t be careful enough. Sure, the vacation home might have some kitchen appliances or a TV that a renter could destroy. But your own home is likely to contain valuables far greater than a $39 coffee maker.

    I realize it’s wrong to judge a book by its cover – but you can tell a lot about a person just in sitting down and chatting with them face-to-face for a few minutes. Some people are great actors and can fool even the best of us. But at least you can say that you took all the necessary steps to protect yourself in the event that things don’t work out.

    I feel for the woman in San Francisco. To read her blog posts (here and here), she has been victimized beyond lost treasures and a trashed home. Her personal sense of security is gone. Her trust in others has been compromised. She hints that she’ll be moving soon.

    The online marketplace can be a dangerous and scary place, folks. Please be careful out there.

     
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