I find them fascinating. The stories behind successful companies, especially when they started small. In an attic room or in a converted garage. No one saw any value in it and yet they persevered and with success! I think it's delicious, inspiring and you always learn something from it. Take Airbnb for example. Did you know that it all started with 3 air mattresses? Imagine! How do you grow from 3 air mattresses into a global player? And what lessons can we learn from this? Read and be inspired!
From idea to platform
There they were, Brian Chesky and Joe Gebbia. It's 2008 and the rent on their San Francisco apartment had become too high after yet another increase. At the same time there was a large convention in town. All hotels were fully booked. No more room available. Brian and Joe came up with an idea. What if they were to open their apartment to conference goers and other travelers for a low fee? They started with 3 air mattresses, because they didn't have more space. And so Brian and Joe made some money and the rent could be paid. Not long after, Nathan Blecharczyk, a friend of Brian and Joe, joined the duo. The idea of offering a place to sleep to tourists started to take on bigger proportions. It expanded into a platform (like a marketplace) that connected travelers and landlords (hosts). The concept was simple but powerful: why stay in a standard hotel when you can enjoy the hospitality of locals? This is how Airbnb was born. The name 'Airbnb' is derived from the words AirBed & Breakfast. The 'Air' therefore comes from the original idea of renting out sleeping places in the form of air mattresses.
But despite the platform and their conviction, the three of them didn't get much further. Until they were discovered by Paul Graham, a former programmer and venture capitalist. He became the trio's mentor and got them on the right track.
Joe Gebbia on how Paul Graham brought change):
“No one believed in our concept, except us. The three of us had all our money on our credit cards, starting at about ten thousand dollars, almost blown away. But we just didn't know how to give up. Graham did not invest so much in the site that was there at the time, but in the team behind it. He managed to wake us up and said 'just make a product that people really want'. We had to leave our office and meet users all over the world. So we flew to all kinds of cities in America and Europe and spoke to local Airbnb hosts there. They told us about the problems they encountered with the service, how it could be improved and what they liked about the site.” (Source: interview with Sprout, 2013)
By listening to needs and feedback, the platform could be adjusted in important ways and the number of users slowly started to increase.
From platform to international revenue model
Starting in 2010, investment companies such as Greylock Partners and Sequoia Capital started giving Airbnb financial injections. From that moment on, the company grew into an international revenue model. What also contributed to Airbnb's success is the moment that President Obama signed a law in 2011 that made it easier for Americans to rent out their homes. This was truly an important milestone for Airbnb, helping the company start to flourish. Despite struggles (more on that in a moment) with different laws, cultures and the opposition of key leaders in the hotel industry, Airbnb is now known worldwide. The counter now stands at millions of accommodations in 192 countries and 33,000 cities and there is still a long way to go. Airbnb, listed on the stock exchange since 2020, is a gold mine. You can book accommodation anywhere in the world and millions of people have the Airbnb app on their phone.
The challenges of Airbnb
Of course, Airbnb's story is not without challenges and they are certainly not without enemies in the hotel industry. Airbnb encountered resistance and legal and regulatory issues. It says everything about the complexity of a global platform like Airbnb.
Many countries and cities have strict regulations on short-term rentals. Airbnb regularly negotiates with governments to find acceptable solutions, including for the use of homes for short-term rentals. This also applies to Amsterdam. Amsterdam residents saw the availability of affordable housing disappear before their eyes due to the growing number of homes that were used for tourist purposes instead of permanent residence. In addition, Amsterdam residents complained about the quality of life in some neighborhoods due to the increase in tourists. The dialogue between Airbnb and cities such as Amsterdam is constantly evolving. They proactively work with cities to find solutions that take into account local needs and preserve the economic benefits of short-term rentals.
Furthermore, Airbnb has had to work hard to create and guarantee trust, quality and safety. To build trust between hosts and guests, they developed a rating system, identity verification, 24/7 support and came up with a solution for the security of both hosts and guests. Maintaining quality standards for the accommodations offered was also a challenge. Airbnb needed to ensure that properties met certain standards and that hosts and guests had positive experiences.
Airbnb managed to address and overcome the challenges. They grew into one of the most successful platforms for international accommodation rental for short- and now also long-term rentals.
What makes Airbnb different
Airbnb is about creating an experience, building relationships and nurturing loyalty. It's more than just a place to sleep. Hosts open their doors and share not only their space, but also their local knowledge and culture. Staying in an Airbnb accommodation is an opportunity to meet new people, experience cultures and make lifelong friendships. Airbnb has understood this so well and has created a platform that transforms travel into shared moments and lasting memories.
The power lies in their great concept and story, the high-quality photos that bring the story to life and increase bookings. But it is also in their core values, including 'treat each other like family'. Brilliant, because you trust your family.
What is characteristic of Airbnb is that they move flexibly and continue to develop. Just think about the COVID-19 pandemic. Airbnb adapted to changing travel needs and emphasized local experiences. They have developed many initiatives in recent years. They expanded into experiences, setting them apart from traditional accommodation providers. They became more and more socially involved. Via Open Homes, for example. An initiative for emergency housing. This program allows hosts to provide free shelter to disaster victims, refugees and those who have to travel far for medical care. There is a donation platform and Airbnb.org, an independent non-profit organization that helps people share homes and resources in times of crisis.
Keys to success
Isn't it great to see how, with creativity and courage, you can grow from a personal problem (high rents) into a global player? These boys were not discouraged and embraced the unknown. A simple idea opened the door to a revolution in the travel industry. You can dream about that and learn from it!
Get inspired by Airbnb:
- see possibilities instead of obstacles
- dare to think big
- user-friendly processes
- build market knowledge by listening and asking for feedback
- write a hell of a story and publish it
- build a global community
- be socially involved
- In an age of technology, never lose sight of the human connection
- focus on building long-term relationships
- use assessment systems that stimulate customer-supplier relationships (customer intimacy)
- be transparent
- maintain dialogue and strive for win-win solutions
- guarantee trust and safety
- excel in flexibility and adaptability
The Airbnb story goes much further, of course. I haven't even talked about the hotel industry yet. Would you like to read more? Then consider reading the book 'The Airbnb Story' by Leigh Gallagher.
Sources: Airbnb, Airbnb.org, Wikipedia, RTL News, MT/Sprout, Manly