Folder Future Startup: Airbnb – Future Startup

The Airbnb journey. Airbnb, founded in August 2008 by Brain Chesky, Nathan Blecharczyk, and Joe Gebbia, is a San Francisco-based online marketplace that provides accommodation services for tourism purposes. Airbnb is the short version of the name “AirbedandBreakfast.com”.

At the end of 2007, Brain Chesky and Joe Gabbia moved to New York and since they were unemployed they had money problems. The two roommates decided to earn some extra money. At that time, a local industrial design conference was underway that attracted many visitors to New York and almost all of the hotels were booked. The two roommates took the opportunity to earn a little more. They bought several inflatable mattresses and offered visitors a place to sleep and have breakfast for $ 80 per night. They opened a website called “airbed and breakfast.com” for this.

Later, a Harvard graduate, Nathan Blecharczky, joined them. They launched their website at South by Southwest, an annual conglomerate of film, interactive media and music festivals and side conferences, and only two bookings were made through their website.

In 2008, during the Democratic National Convention, there were supposed to be around 80,000 people in attendance at the convention. But there were not enough hotels to meet demand. The founders of Airbnb saw this as an opportunity and launched their website in August, just before the Democratic National Convention in Denver, and this time more than 600 people stayed at the Airbnbs during the convention. But this success was short-lived because at the time people were unsure whether this idea would work or not. In September 2008, the founders of Airbnb ran out of money, introduced election-themed grains to fund their startup, and tried to sell them through grain companies: Kelloggs and General Mill; but failed. They later met a print shop owner who agreed to print the cereal boxes for free and get a royalty in return, only if they were successful. Airbnb founders won $ 30,000 on 500 boxes of cereal. At the end of 2008, the founders of Airbnb again ran out of money and decided to enter Y Combinator.

Airbnb secured its first funding worth $ 20,000 from the Y Combinator in January 2009 after the Y Combinator winter training session. Since the image quality of Airbnb’s ads was not good enough, the founders decided to go door-to-door with a camera to capture quality images of the ads. After that the company started to gain traction and by March 2009 Airbnb’s website had 2,500 listings and around 10,000 registered users. The name of the company has been abbreviated to “Airbnb”. The company has moved its hosting service from shared spaces to a wide range of properties including rooms, apartments, and more. In April 2009, Airbnb secured a $ 600,000 start-up investment from well-known venture capital firm Sequoia Capital.

The following year, the company raised $ 7.2 million in funding under its Series A, led by Greylock Partners and Sequoia Capital.

In just 4 years since its launch, Airbnb has expanded its business to 89 countries and reached 1 million bookings made through this platform and won the SXSW Breakout Award for its app in 2011. In the same year, Airbnb’s value reached $ 1 billion after securing funding worth $ 112 million. In the same year, Airbnb opened its first international office in London and in early 2012 they opened offices in several cities around the world including Moscow, Paris, Barcelona, ​​Milan, São Paulo, etc. As the business began to grow rapidly, new problems arose. In 2012, Airbnb introduced the “Host Guarantee,” a million dollar coverage policy for hosts. In November 2012, Airbnb introduced a new feature called “Neighborhood,” a travel guide to 23 cities around the world to help tourists choose neighborhoods based on their personal preferences. At the end of 2012, the company entered the Asian market after opening its office in Singapore.

In 2013, the number of listings on Airbnb’s website reached 250,000. The following year, the company secured a $ 450 million investment from TPG Capital and its value reached $ 10 billion. . The same year, Airbnb introduced a new logo called “Bélo”, intended to symbolize “belonging”. In April 2015, Airbnb was launched in Cuba, becoming one of the first American companies to do so.

According to a statistical report, Airbnb currently has 7 million listings in 100,000 locations around the world covering 220 countries and the number of Airbnb hosts is 2.9, with 14,000 new hosts joining this platform each month. The company has raised approximately $ 5.8 billion in 10 funding rounds. In April 2020, Airbnb raised $ 1 billion in yet another round of funding from Silver Lake and Sixth Street Partners.

During the COVID-19 pandemic, the company went through a major recession and had to lay off around 1,900 employees, or 25% of its workforce. In December 2020, the company went public and raised $ 3.5 billion.

Behind Airbnb’s Growth. From 2009 to 2019, Airbnb’s compound growth rate was 153%. One of the main reasons for Airbnb’s massive growth in just four years is the addition of the ability to include Airbnb ads on Craigslist. Although at first the founders of Airbnb did not want to link their platform with Craigslist due to lack of credibility, they later decided to add a feature allowing Airbnb hosts to add their listings to Craigslist. , because a lot of people are looking for rooms to rent on Craigslist. They created a feature to visit Craiglist, add a unique URL for the Airbnb host, add the ad information to Craigslist, and then send it to a user for posting on Airbnb. As a result, many Craigslist users have also added their listings to Airbnb.

By adding the one-click cross-listing feature to Craigslist, Airbnb has reached many people looking for accommodation on Craigslist. As Airbnb ads were more detailed and believable than Craigslists, after using this simple but brilliant growth hack, Airbnb got huge traction.

In addition to using the growth hack, Airbnb also provided a free photography service to bring in legitimate photos of every New York listing, helping hosts optimize their listings to more easily reach people. Additionally, Airbnb introduced a referral program where every time someone referred someone to the platform, they would get travel and accommodation credits.

Read

An incredible journey | Interview with Brian Chesky: Airbnb absolutely should have died long before they approached Y-Combinator. Why they didn’t was a story of $ 40,000 worth of credit cards max, dozens of rejections, and a lost cell signal that nearly brought the business to failure. Brain Chesky, one of Airbnb’s co-founders, shares Airbnb’s journey, as well as his journey from an art school graduate to Airbnb’s co-founder and CEO.

The inside story behind Airbnb’s unlikely rise: Leigh Gallagher, associate editor of Fortune magazine, recounts the company’s extraordinary growth in her new book, The ‘Airbnb Story: How Three Ordinary Guys Disrupted an Industry and Made Billions… and Created Plenty of Controversies’. She spoke about her book on Knowledge @ Wharton.

Can Airbnb continue to grow after its IPO launch at a valuation of $ 100 billion: A key competitive advantage of Airbnb is that most single home owners are only on Airbnb, not on other platforms like Booking.com or VRBO. “Maximizing revenue is not the only thing for these hosts, unlike hotels. It’s easy to work with Airbnb, for people who might have a full-time job. There is a basic idea that draws people to Airbnb: I just have a house, I want to rent a house. – said DJKang, CEO of ValueChampion.

To look at

The rise of Airbnb: inflatable mattresses to the billions: In 11 years, Airbnb has grown from a company that rents 3 mattresses to a company that has 150 million users, holds 2 million bookings per day, and is estimated to be worth $ 38 billion. To help you understand how Airbnb got so successful, we take you back to 2008, when Airbnb provided a nifty way for people to make extra money with their homes as the housing market crashed.

Brian Chesky on Airbnb Launch and Scale Challenges: This is session 18 of Technology-enabled Blitzscaling, a Stanford University course taught by Reid Hoffman, John Lilly, Allen Blue, and Chris Yeh. In this course, Reed Hoffman interviews Brian Chesky, co-founder and CEO of Airbnb.

Chesky, CEO of Airbnb, on the future of travel: Airbnb CEO Brain Chesky talks about the future of tourism after the pandemic.


Airbnb lessons

To be perseverant : One of the main reasons for Airbnb’s success is that its founders never gave up on their idea. They were repeatedly rejected by investors and repeatedly ran out of money. Fred Wilson, one of the renowned venture capitalists, was one of the investors who rejected Airbnb and sees it as one of their biggest mistakes. Despite the rejection, the founders of Airbnb remained persistent with their goal and kept moving forward. According to Joe Gebbia, one of the founders of Airbnb, every rejection received was an invitation to continue.

Understand your users: From the start, Airbnb has focused on user experience. The company is constantly testing and adapting its product to make the user experience even better. Offering facilities such as prepayment feature, free photography service to take quality ad photos, insurance for hosts, referral program, 24/7 customer support , etc. have helped Airbnb establish itself as a credible platform by gaining the trust of its users, attracting more people. In addition, Airbnb provides users with a personalized experience based on previous research, which makes the rental process more convenient.

Build partnerships: Partnering helps a company build credibility, brand awareness and reach more people. Airbnb has partnered with several organizations such as refugee charities, New York Red Cross (promoting fire safety), KLM Airlines, etc.

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