AirBnb


AirBnb co-founders Joe Gebbia and Ryan Chesky took $30,000 from selling cereal boxes and turned it into a $20B lodging company. What inspires me most about the two founders and the business is the true rag-tag nature of how it began. It was surprising to learn that the two founders were design majors and hadn’t an iota of hotel experience in them. This was the driving influence for why I am writing about them today. It goes to show that anyone, no matter the background, can achieve greatness in a field that they never fully understood. In reading about the companies founding there are three values that seem to transcend through the business model. The three being: integrity, innovation and persistence.

Persistence can be seen throughout the development of the business. First, we see our founders take advantage of the high demand for hotels on certain weekends in San Francisco. To make a quick buck they bought three air mattresses and hosted three people a night, promising a home-cooked breakfast in the morning. This gave Gebbia and Chesky the will to push on. They realized that this idea of renting out apartments was bigger than just a side venture so they sought to raise money and get things going. One problem was that they didn’t have the business acumen to receive funding or help from local accelerators and their previous design experience was seen as a weakness to investors. Doing what they know best, they designed two cereal boxes at the time of the 2008 presidential election. One was Obama themed and the other was McCain themed. They sold 500 of each of these boxes by going around to local conventions. This gave them the $30,000 needed to start AirBnb. Unfortunately, this was not the last obstacle they would face. While the previous effort allowed them to higher a coder and got them involved in a start-up accelerator, they still were unable to receive the large scale funding that their business needed to truly grow. They persisted by attending various meetings and conferences and presenting their model to investors. People were still turned off by their lack of management background but at the end of the day this was perhaps their greatest asset.

Innovation came in at many levels. There is real ingenuity in AirBnb’s growth story. Since many VC’s were not interested, the founders had to find another way to market the company. They ultimately did this by ‘hacking’ Craigslist and automatically sending an email to every user that posted a property listing with information about how to list on AirBnb. This worked wonders as AirBnb’s inviting UI made consumers want to interact with the website. In addition, their designer’s eye helped alleviate one of the biggest issues in booking an apartment online: the quality. Being designers, Chesky and Gebbia knew how important the photos of the space would be. Because of this they included many pictures of the property that allowed consumers to fully visualize the space and know what they would be getting out of it. This was only possible because of their designer intrigue. Eventually, the company grew large enough to receive VC funding and that is when business really started to boom.

The integrity of the operation is evident from the start. They started by promising a nice place to stay with breakfast in the morning and that is what they gave people. Then when they started posting numerous listings online they created a standard for the photos that would be posted in order to protect the guest as well as the host. They implemented policies about theft and now offer a guarantee for the quality of the location and its amenities. This guarantee is just as much for the guest as it is for the host.

The founder’s goal was to create a simple interface that made you feel close to home. By carrying the values of integrity, innovation and persistence throughout their business model they were able to accomplish this goal. Their efforts are admirable as AirBnb is a business for the people that helps buyers and sellers equally. They took advantage of the tech boom and created an entirely new marketplace for an old industry. What is most important to me about Gebbia and Chesky is that they were just normal guys, neither was a super genius, they took the cards they were dealt and made the best hand possible even though it was only their first time playing poker. Personally, I chose these guys because I hope that my studies shape my skills and ideas but I hope to take my unique perspective and turn what’s expected into something unexpected. As the great American writer, Ally Carter, wrote, “sometimes it takes an outsider, someone with fresh eyes to see the truth.”

 

Advertisements

3 thoughts on “AirBnb

  1. Just that first line “From a cereal business to a lodging company” blows me away while leaving me nodding my head in approval at their ability to adapt to what they know in the market! I’m very impressed at how savvy these grassroots entrepreneurs are. I wonder if Craig’s List felt violated by what they were doing!

    Like

  2. I think the best piece of inspiration comes from their desire to create a business out of a single good idea. Doug Lebda, the founder of Lending Tree described entrepreneurship as finding a solution to a simple problem. He referenced the founder of L.L. Bean as the first person to address the problem of soggy feet while hiking. If you have wet feet-make boots. In a similar way, air bnb solves the problem of cheap lodging by connecting budget conscious travelers with people with an empty couch.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s