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The Story of Airbnb

The Story of Airbnb

| April 17, 2024

Air mattresses in a loft. Cereal boxes sold on the street. A business born in the middle of the 2008 Recession. What are we talking about?

Airbed and Breakfast, or as it is known now, Airbnb. Founded by three college graduates, Airbnb has grown to become the most popular short-term rental company around. In fact, the name “Airbnb” is used synonymously with short-term rentals, just like “Kleenex” is for tissues, and “Band-Aids” for bandages.

How did these three young guys build up Airbnb, and become billionaires in the process?

High Rent and a Conference

Brian Chesky and Joe Gebbia, who had met at the Rhode Island School of Design, were now roommates in San Francisco. The year was 2007, and these college graduates were struggling to pay their rent. One day, Joe sent an email to Brian that would alter the face of the hospitality industry forever. The email read: “I thought of a way to make a few bucks – turning our place into ‘designers bed and breakfast’ – offering young designers who come into town a place to crash during the 4 day event, complete with wireless internet, a small desk space, sleeping mat, and breakfast each morning. Ha!”

And so it was. They opened their home to three visitors who were in town for a design conference that had filled up all the hotel rooms. They slept on air mattresses and were provided breakfast.

When they realized this could become an actual business, they looped in an old roommate, Nathan Blecharczyk. A coding prodigy who had been writing software since he was fourteen, he was a great asset to the team.

Still, the trio didn’t find immediate success. It was 2008, and the world was in the middle of the Great Recession. Their third attempt at launching Airbnb was in the summer of ’08, but not one of the fifteen angel investors they met would take the risk.

Creative Solutions

These three young men embodied the famous proverb: “If at first you don’t succeed, try, try again.” Funds were running low, and so they got creative with making money. They took to the streets outside of a political rally and sold cereal boxes they designed with the faces of the political opponents. Each box of Obama O’s and Cap’n McCains was sold for $40, and by the end of it, they had made $30k to put toward their company.

After many more months of struggle, Airbnb was given a $600k seed investment from Sequioa Capital. Chesky described it as going from only eating leftover cereal to being “ramen-profitable”.

Snowball of Growth

From there, Airbnb only grew in size and popularity. In 2011, only four years after it began, Airbnb had locations in 89 countries, and they had a new office in London. Even after taking a hit from COVID travel restrictions, Airbnb got right back on their feet. Now, Airbnb has provided accommodations for 1.5 billion guests in more than 220 countries and regions. Talk about growth!

The Brains Behind the Business

From struggling college grads to billionaires, Chesky, Blecharczyk, and Gebbia had quite the turn around. Ironically, in his high school yearbook, Chesky’s quote was: “I’m sure I’ll amount to nothing.” How wrong he was!

Now Chesky is the CEO of Airbnb, and his net worth is 11.1 billion dollars. In 2015, he was named by the Times 100 as one of the most influential people alive.

As for Joe Gebbia, he is now worth 9.7 billion. And although he is no longer at Airbnb full-time, he has kept busy with a startup called Samara, a company that builds tiny homes in backyards. He is still the Chairman of Airbnb.org, a non-profit that helps people in need find temporary housing.

Lastly, Blecharczyk is the Chief Strategy Officer and is worth 10.6 billion. He is considered the “wild card” of the company for being so adaptable and taking on challenges he’d never handled before.

Airbnb Controversy

Not everything in the Airbnb world is sunshine and rainbows, though. With the low amount of housing on the market and skyrocketing rents, many are pointing fingers at Airbnb as a potential cause of the problem. On this subject, Chesky commented, “I think in many cities, there’s more people moving to the city than housing being constructed. And I think that’s just a problem that’s much larger than us…My point is I’m not here to defend that Airbnb is a pure force for good. I think what I’m saying is: it’s a tool. It’s a technology. It can be used for good.” (Time).

Other problems people have cited with Airbnb are safety concerns, a lack of taxation, and questionable business practices. Each person has to examine the evidence and make the decision for themselves what they want to believe, and whether or not they will utilize Airbnb.

My Thoughts

As a young adult, I love Airbnb. It’s great to stay in a home with some friends or family, and split the cost. You get to cook for yourself, relax in privacy, and experience new places. I’ve never had bad experiences, but I’ve also been careful to read reviews before making any decisions. I would never go anywhere that didn’t feel safe.

As for the issue of Airbnb limiting the housing market, I don’t think that has reached our area yet. I understand big cities like New York City or Boston may face that, though; I’m just not the one to speak about it.

As for the three founders of Airbnb, it is amazing to see what they’ve accomplished in less than twenty years! Especially impressive is where they started, and how far they’ve come. I wonder what the next innovative company will be that overhauls an industry as we know it.

Sources:

  1. Business Insider. (2016, August 19). Airbnb CEO Brian Chesky: $30 billion startup. https://www.businessinsider.com/airbnb-ceo-brian-chesky-30-billion-startup-2016-8#in-2016-chesky-as-well-as-airbnbs-two-other-cofounders-all-publicly-signed-the-giving-pledge-a-philanthropic-initiative-started-by-warren-buffett-and-bill-and-melinda-gates-by-doing-so-they-promise-donate-more-than-half-of-their-wealth-within-their-lifetimes-13
  2. Airbnb Newsroom. (n.d.). About Us. https://news.airbnb.com/about-us/#:~:text=Airbnb%20was%20born%20in%202007,every%20country%20across%20the%20globe.
  3. iGMS. (n.d.). The History of Airbnb: How a Simple Idea Became a Multibillion-Dollar Business. https://www.igms.com/airbnb-history/#
  4. Business Insider. (2016, February 22). How Airbnb was founded: A visual history. https://www.businessinsider.com/how-airbnb-was-founded-a-visual-history-2016-2#their-first-guests-two-men-and-one-woman-showed-up-each-guest-paid-80-to-stay-on-the-air-mattress-one-guest-amol-was-another-designer-who-actually-helped-joe-and-brian-on-their-presentations-being-one-of-the-first-airbnb-guests-feels-like-being-on-the-tonight-show-but-i-didnt-know-i-was-on-the-tonight-show-amol-said-in-2012-6
  5. Fortune. (2023, July 18). Airbnb co-founder Joe Gebbia just cashed in $1 billion in stock sales, net worth now over $14 billion. https://fortune.com/2023/07/18/joe-gebbia-airbnb-cofounder-1-billion-stock-sales-net-worth/
  6. Fox Business. (n.d.). Airbnb co-founder Blecharczyk: How the self-taught engineer helped build lodging industry disrupter. https://www.foxbusiness.com/lifestyle/airbnb-co-founder-blecharczyk-how-the-self-taught-engineer-helped-build-lodging-industry-disrupter
  7. Time. (n.d.). Brian Chesky: The TIME Person of the Week Podcast. https://time.com/collection/person-of-the-week-podcast/6336523/brian-chesky-interview-person-of-the-week/