If you are fond of travelling, the chances that you may have used Airbnb during your travel is pretty high indeed. Airbnb is globally the largest online marketplace to list and rent holiday venues. With over 6 million listings across 65,000 cities and a customer base of over 150 million, the San Francisco startup is riding on it’s promise to prepare for its 2020 IPO.
Brian Chesky and his co-founder, founded Airbnb by first renting out their own rooms for money.
”Unfortunatley, I didn’t have any beds. But Joe my roommate had three air beds. I didn’t know why he had that. But we realized, we created not a breakfast but an air bed and breakfast. That’s where the name came from.”Brian Chesky
Through this concept, it didn’t took them long to replicate the idea and they started serving more ordinary customers who had empty rooms available for rent. Three days later, the duo who are from design backgrounds, manage to built a basic HTML site and thus Airbnb started grasping their presence digitally around the world.
It wasn’t always easy in the early days, as Brian recalls back in 2008, no investors were willing to invest in his idea due to the economy crisis and some even called his idea crazy. In the first eight to nine months, Airbnb only had about 100 users and on average 10 visitors per day.
”I’m pretty sure even Facebook didn’t go through this experience. It is really hard to build a marketplace. We ended up having travelers who wanted to book a place on our website but there was no one wanting to rent out their rooms. And we started with no money and got progressively more broke from there. We took on $20,000, $30,000 credit card debt just to fund the company”.Brian Chesky
At one point, they couldn’t get any more loans to fund their startups as their debts got so bad. Reminiscing the good old days, Brian said on some days he would wake up with his heart thumping, feeling depressed about his startup and life and on other days he was brimming with optimism and enthusiasm.
The Decisive Moment
During the Democratic National Convention in 2008, in which there were around 80,000 participants attending the convention in Denver, Brian and his team had an idea. Due to the shortage of hotels, Airbnb naturally became the go to site for participants to solve their accommodation problem. The strategy was so effective that the startup caught the attention of CNN and New York Times.
During the presidential election in 2008, Airbnb came up with another smart strategy to promote its brand where they sold limited edition of Obama O’ and Cap’n McCain’s cereal. Sure, it sounds simple and good on the surface, but to assemble these cereals, Brian and his team had to cut off and fold around 1,000 cereal boxes from huge cardboard prices. Once it was assemble and ready, Brian sent the cereals to every media people and organization he knew. Overnight, it became nationwide news.
”We sold $30,000 worth of breakfast cereals. We couldn’t believe it. We got back to zero in our bank account. Greatest feeling in the world!”.Brian Chesky
The decisive moment for Airbnb according to Brian, was on January 2009 when Airbnb entered YCombinator. The founder said that initially the interview didn’t go well till Joe pulled a box of Obama O’s cereals and handed to Paul Graham the VC who co-founded YCombinator. Believing that if they can sell cereals at $40 per box, convincing people to sleep in other people’s home wasn’t a tough task hence Graham ended up funding Airbnb.
You Just Need 100 People to Love your Product
As shared by Brian, one piece of advice from Paul Graham which he closely follows till today:
It’s better to have 100 people who love you than finding a million who just sort of like you. Build your business one person at a time. Just focus on 100 people. If they love you, they will market the product for you and tell everyone else. Go to your users. Do one scalable thing, one person at a time. It’ actually so simple, that’s the secret…that’s all you need to do.
Every entrepreneur is worried about appeasing investors. Every investor wants the graph to go up and to the right… Who gives a damn? That’s not what going to make your company successful. Your customer don’t care how fast your company is growing. Your customer only cares about how great the experience you have is.Brian Chesky
One advantage for startups is that they are able to create great experience for users since they are relatively small according to Brian.
On the other hand, companies with a lot of users can be a curse, like a prison. All great things in history started with a few people that just loved it. They told the followers, they told the other people. Countries started that way, the best products started that way.Brian Chesky
A man of his words, in the early days of Airbnb, Brian and his team often went door to door to meet hosts who were on the Airbnb platform so that they could get professional photographers on sites to catch better quality pictures which in return will allow users to have a better view of the room they wish to rent. Fighting through tough conditions like snow and rain, they went all out to interact with hosts to find out what they really needed to improve Airbnb service.
Airbnb was really built by city by city, block by block, neighbor by neighbor, host by host, and today we have over 2 million people a night staying at Airbnb. It will become hopefully one of the largest providers for accommodation in the world. For the first time in human history, people on Airbnb will be able to stay with and live with people in every other country in the world. Never in human history has that been possible, for people to live together. But because of this now, we are able to connect the world. It is truly available. And it all started with this incredible early humble beginning. It was totally crazy.Brian Chesky
One final piece of advice Brian has to give? ”Don’t mess up with the culture, culture is so incredibly important because it is the foundation for all future innovation. People with passion can change the world”, he said. The advice was given by one of his investor, Peter Thiel. Brian actually interviewed Airbnb first 300 employees by himself and up till today he still tries to meet with every newly hired employee whenever he can.