Guest Post by: Laszlo Kövari

Airbnb, one of the hottest startups coming out from the Silicon Valley, faced a very simple leadership challenge recently: one of their customers’ home was destroyed and her identity was stolen by another airbnb customer. She blogged about it and it went viral.

I’d like to stop here to offer some facts for those who don’t follow the startup scene closely:

Airbnb, an online rental agency that let’s people rent their apartments out to other airbnb customers, was seeded by the most innovative incubator Y Combinator, then the first round of financing was lead by Graylock Partners and Sequotia Capital and most recently by Andreessen Horowitz, Digital Sky Technologies and General Catalist Partners, bringing the valuation of the startup to an impressive $1.3B. Even Ashton Kutcher got in with some undisclosed money. ALL TOP TIER VCs (with the exception of A. Kutcher), investing a total of $120M (minus a few cents) into the team itself of3 guys in their late 20s, early 30s, mostly with design and engineering background (not that age and background matters from a leadership perspective, of course).

Needless to say that with such celebrities behind it (and I don’t refer to Ashton Kutcher), the company has been a media darling from the start. This is important because they could have leveraged the media to manage the crisis that broke out….but they didn’t.

So how did this stellar team decide on the appropriate response?

One of the founders called the customer to explain the VC business to her and their concerns about the recent round of funding (over $112M) as well as about the company’s valuation and kindly asked her several times in the course of this conversation and subsequent emails to remove her blog post. Seriously! That’s the best they came up with.

In the meantime they managed to alienate the media, as well. Mike Arrington (founder of Techcruch) who is the designated tough guy in Sillicon Valley, picked up the story talking about airbnb not helping the victim.

What did they do?

Paul Graham (the very well respected y combinator guy) goes on to write a blog about Arrington bullshitting and the customer not being 100% truthful. I assume he made this move after pragmatically thinking about risks and options!

Arrington is a guy who loves such responses and he did what was expected of him: counter attack plus launching a story of another AIRBNB VICTIM.

I don’t continue with the chronology of the drama, just the last move: they came up with an official apology for letting the victim down, etc. plus introduced a new safety measure; standard stuff that reads like it was written (copy pasted) by a jr pr consultant then edited by somebody at the company; not important.

It’s funny to observe this very simple pattern: if there is no leadership present in an organization, the most simple stuff (what’s the right thing to do) triggers the biggest confusion. $120M can buy administrative power and of course fix problems like this disaster, but it cannot buy one instant of leadership.

Story source: Lawrence Aragon PEHubwire.

Original Post: http://prakhsis.com/blog/?p=921