If you had a dream for a business idea, how many years could you unsuccessfully push to make it happen without giving up?
The founders of Airbnb believed in their vision for two years, living with maxed out credit card debt and bootstrapping everything they had, until their business finally started to generate revenue. From selling boxes of presidential cereal for the 2008 election to living in Airbnbs while their actual apartment was used as office space, the story of how AirBed & Breakfast went from an email to make rent to a multi-billion dollar company is a long one with many ups and downs.
The year is 2007. The location is San Francisco. Brian Chesky and Joe Gebbia are having trouble paying rent, and decide to put up a few air mattresses and offer breakfast for those who couldn’t find a hotel for the local design conference. Two men and a woman took them up on their offer for $80 a night. Realizing the potential in this, the two enlist the help of former roommate and technical architect Nathan Blecharczyk as the third founder.
The three visionaries were hopeful when they launched at SXWX in 2008, but they only had two customers come out of it, and Chesky was one of them. Rejected but not defeated, they pushed on.
Hoping to capitalize on another convention, the company relaunched in August 2008 and sold Obama O’s and Capn’ McCains for $40 a box at the Democratic National Convention, and raised $30,000 to bootstrap a little longer.
Finally, VC Paul Graham gave them a training opportunity AND their first funding of $20,000,. The trio spent three months in early 2009 perfecting their company through the Y Combinator start up accelerator. And then they got stuck, making $200 a week with no growth. Their first plan of action was to visit their New York listings and personally take better pictures for the hosts. Within a week, profits double. They then expanded from only shared spaces to all types of accommodation, and began automated campaigns targeting people looking for housing on craigslist. By March 2009, the newly rebranded Airbnb had over 2,500 listings and almost 10,000 users
The recent statistics show that @Airbnb now has over 2 million listings in over 190 countries and 34,000 cities. Airbnb hosts have hosted over 40 million guests and the company is worth an estimated 25.5 billion, based on the latest round of funding of 1.5 billion. They continue to expand by offering Airbnb Experiences for traveling guests as a way for them to further dive into the local culture with authentic and educational tours, classes and events. After so many years of rejection, Fred Wilson can’t be the only investor keeping a box of their cereals as a reminder not to pass on an opportunity like this again.
The company still has its hiccups. Huge growth means a need for regulation policies and damage coverage for hosts, but the hard part of convincing strangers to share their personal sleeping spaces is over. Airbnb has shaken the hotel industry with their cheaper rates, authentic experiences, and homes with charming character.
Despite all the rejections and people saying this idea was too crazy to ever work, Chesky, Gebbia and Blecharczyk made it work, and are worth billions because of their grit.