The Power of Adversity

by | Oct 29, 2016 | Archives

Adversity can bring great rewards.

When I first moved to Hong Kong in the early 1970s, selling US mutual funds to Chinese, the company I worked for went broke.

That was one of the best things that ever happened in my business.  Every cloud has a silver lining.   That adversity led me to reverse roles and write about the benefits of Hong Kong mutual funds for Americans rather than the reverse.  This was exactly the right thing to do then.  The Hong Kong market dramatically outperformed Wall Street for decades.

There is a recent example of how a micro businessman who used AIRBNB turned adversity into a pot of silver (or perhaps gold).

AIRBNB has been popular with travelers and the hosts who rent their places.  The company has millions of properties in over 3o,000 cities globally.  We use the AIRBNB platform to rent the cabins at our farm.   We get a lot of visitors through AIRBNB.

merrily farms

Entrance to our farm.  See an AIRBNB listing here

AIRBNB’s system works great for us but their short-term rentals often run afoul of regulations aimed at stopping a shortage of affordable housing, protecting the hotel industry or making sure that quiet neighborhoods do not become noisy.

A Wall Street Journal article (1) explains how Ulrik Binzer used AIRBNB to rent his home in Tiburon, California. Then he had some adversity.   Tiburon decided to ban short-term rentals.  He was upset by the blanket rule that banned his renting entirely.

Then Mr. Binzer saw the silver lining. He had an idea for a company that helps city governments who have trouble enforcing short term rental laws.  Airbnb and rival sites don’t publicly list addresses, so many municipalities do not have the resources to find and stop offenders.

Mr. Binzer’s company (Host Compliance) compiles data such as the location of short-term rental listings and provides cities on which listings violate local rules.   His company has over a dozen local governments as clients, ranging from Vancouver to Napa, California and his service is not cheap (it can cost tens of thousands of dollars a year).  Yet the savings for cities are high as they can avoid hiring full-time staff people.

He has turned the loss of a little rental income into the gain of a lot of micro business income that has great growth potential.

Next time, when change brings what seems like adversity, look again for a bigger picture.   Somewhere in the adversity is a silver lining, or maybe even a pot of gold.

Gary

(1)  www.wsj.com Want to book an airbnb stay not so fast

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