From Renting an Inflatable Mattress to a $31 Billion Company: How Airbnb Was Founded

Dilara Avlupınar

Dilara Avlupınar

Boğaziçi Ekonomi

Today, Airbnb, which has become the first digital platform where we look for a place to stay, especially in foreign trips, has become the 21st century with its establishment. It is one of the most inspiring success stories of the century. Before it became such a big company, it was an idea where three friends were trying to make some money just to pay their rent.

Unemployed and with thousands of dollars in credit card debt, its founders realized that the hotels in their city were insufficient and started to rent rooms in their homes by buying air mattresses.

The founding of Airbnb is an example of stability, will and determination. In 2007, founders Brian Chesky and Joe Gebbia had just moved to New York. Unemployed, Chesky and Gebbia were having trouble paying their rent. So they started looking for ways to make money. Then one day they realized that the events in the city were attracting too many visitors and all the hotel rooms were full.

Seeing the opportunity to make money here, the founders immediately bought a few inflatable mattresses and set up a site called “Inflatable Bed and Breakfast”. This is where the name of the company comes from (Air Bed and Breakfast). The idea was actually to provide visitors with a place to sleep and breakfast in the morning for $80 a night. When their first guests arrived, they were considered successful: a 30-year-old Indian man, a 35-year-old woman from Boston, and a 45-year-old father of four.

Shortly after, Nathan Blecharczyk, a Harvard-educated technical architect, joined them as the third founder.

When the three friends started serving again for the SXSW conference, they ran into a big problem: The site had only two users, and one of them was Chesky. They changed the site to fix the problem and the company was launched again in August 2008.

In 2008, they met with 15 angel investors. They received a negative response from 8 out of 15 investors. The other 7 investors ignored them.

They didn’t let that dampen their spirits, and they opened up to serve again just before the Democratic National Convention in Denver. They were intended to appeal to the thousands of people who came to the convention. Obama’s supporters would host Obama’s supporters. Although more than 600 people have found accommodation with Airbnb, their success did not last long.

When they couldn’t make money on the site, they turned the cereal boxes into Obama O’s and Cap’n McCains and sold them. The founders, who added the phrase ‘limited number’ on it, earned an income of $ 30,000 with this strategy.

Paul Graham was the first to realize the potential of young people. In exchange for a small stake, Graham invited the founders to a training program called Y Combinator and donated money. The three friends decided to use this money to travel to New York, a larger grocery store. Meanwhile, they noticed that most of the ads’ photos were not pretty. They bought a camera and went door to door to take better pictures for the postings.

Paul Graham of Y Combinator was also trying to persuade venture capitalist Fred Wilson to invest in Airbnb.

Wilson refused the offer, and after meeting Chesky&Co, he asked for a box of cereal to remind him not to make such a mistake again.

By the end of 2008, it was time to change and evolve. They made Airbnb by shortening their complicated name. Thus, they no longer had any connection with air mattresses. In addition, they changed the site design and made the site a place to stay in just 3 clicks.

After visiting users in New York, the company began to flourish. Their focus has expanded from shared apartments to all types of accommodation. By March 2009, Airbnb had 2,500 listings and almost 10,000 registered users.

In April 2009, they finally received the investment of 600 thousand dollars from the investment company Sequoia Capital.

This situation relieved the founders economically. In addition, in 2011, the company also received the award for “breakthrough mobile application” at SXSW. In the same year, they became the Unicorn of Silicon Valley, receiving $112 million in investments from some Silicon Valley investors.

Although they got into trouble with irresponsible tenants and the law in 2014, they were able to overcome these problems.

They introduced an insurance policy called the “Homeowner’s Guarantee”, which can cost up to $1 million against tenants who smash the house. In order to overcome the legal problems, they started to collect hotel taxes and give these taxes to the municipalities.

This company, which was founded by two friends in debt with three inflatable mattresses, is worth 31 billion dollars today.

The latest statistics about Airbnb are as follows: More than 2 million ads and more than 40 million users in more than 190 countries and 34 thousand cities. The value of the company is approximately 31 billion dollars.

This post is also available in: Türkçe

Kategoriler: Entrepreneurship, Success

Yorumlar (0) Add Comment