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The growth of Airbnb is remarkable, the online travel platform has become the largest provider of accommodations in the world in less than a decade.
Airbnb has disrupted the $570 billion hotel industry, its $100 billion valuation is now more than Hilton, Marriott, and Hyatt combined. It all started from a wacky idea of co-founders Brian Chesky, Joe Gebbia, and Nanthan Blecharczyk.
Brian Chesky was born in New York to a Polish descent and Italian origin. Brian was into art since young, he later became interested in landscape architecture and design.
Brian attended the Rhode Island School of Design in 1999, where he got to know Joe Gebbia, who would later become his co-founder of Airbnb. “We’re going to start a company one day, and they’re going to write a book about it,” Joe told Brian before their graduation.
After graduating from RISD, Brian moved to Los Angeles to work as an industrial designer, for which he made $40,000 a year. In 2007, Joe convinced him to move to San Francisco to start a business together, as “everyone is working on a startup there”.
When they both quit their jobs, their landlord raised their rent and so they were in need of money. The opportunity knocked when the Industrial Designers Society of America conference was coming to San Francisco but many hotels were booked.
They purchased air mattresses and marketed this idea as “designers bed and breakfast” targeting conference goers, this was the foundation of Airbnb.
In 2008, Harvard graduate Nanthan Blecharczyk became the third co-founder of Airbnb, who served as the company’s first chief technology officer. Together, three of them started what was at the time called Airbedandbreakfast.com, shortened to Airbnb later.
Brian assumed the role of CEO but his and Joe’s designer background was not a usual engineer background the investors were confident in. Failing to raise funds, the trio designed and sold “Obama O’s” and “Cap’n McCain’s” cereal boxes based on the 2008 presidential candidates.
They sold enough cereal to raise $30,000, and attracted the attention of Y Combinator co-founder Paul Graham. Y Combinator invested $20,000 on Airbnb, but Paul wasn’t convinced at first until Joe showed him the Obama O’s box.
“You guys won’t die, you’re like cockroaches,” that’s how Airbnb got enrolled into Paul’s Y Combinator’s seed funding program. The first major advice Paul gave them was to leave California and go to New York, Airbnb’s biggest market with a princely 100 customers.
“It’s better to focus on the 100 people who love you, instead of one million who kind of like you,” Paul told them. The team moved to New York and went from door to door visiting the hosts and taking photos of their apartments.
We had a saying that you would do everything by hand until it was painful.
So Joe and I would photograph homes until it was painful, then we get other photographers.
Then we’d manage them with spreadsheets until it was painful. Then we got an intern.
The founders learnt a great deal on how to adapt their model to serve the market, and their business grew from there.
It is notable that they were being rejected by a famous VC Fred Wilson, who later admitted that it was his biggest regret as an investor.
We focused too much on what they were doing at the time and not enough on what they could do. Others saw the amazing team that we saw, funded them, and the rest is history.
Airbnb is well on its way to building the “eBay of spaces.” I’m pretty sure it will be a billion dollar business in time. We missed Airbnb even though we loved the team. Big mistake.
The cereal box will remain in our conference room as a warning not to make that mistake again.
Fred was right, Airbnb is valued at $100 billion after going IPO by the end of 2020, even amidst the pandemic.
There are now more than 5.6 million listings in 200 countries, closing in on 1 billion guest arrivals, equivalent to rooms sold in hotel terms.
Throughout the years, Airbnb had to overcome resistances from the hotel industry, local communities, and many other challenges.
Brian had not only persisted but by launching Experiences, Airbnb wants to own more than just accommodations in your travel journey.
Brian is one of the best new CEOs since Mark Zuckerberg.
Brian spent two years at a private school that taught military procedure and leadership. It’s an easy mistake to assume Brian is just a designer.
He has the soul of the designer, but the precision of discipline of a military-school student. There is nothing abstract or fuzzy.
Design is part of what makes him tick, but he basically was trained to run a military campaign.
With a net worth at $10 billion, Brian ranks among one of the most striking cases of a person learning on the job. Brian’s first foray into tech, into start-ups, into running a company of any kind – has turned out to be a huge success.
Perhaps not being an engineer works in favour to Brian, as he and his team designed a product that fits into the customer’s journey.
