Airbnb is an online marketplace, which allows people to rent out properties or spare rooms to
Airbnb works on a commision based business model. It charges 3% commission from the hosts and 6-12% from the guests.
Airbnb is currently valued at 31 Billion dollars and is expected to value at 38 Billion dollars in the upcoming year.
But how did Airbnb be where it is today. Airbnb is not only one of the most successful startups in the world but also has one of the most inspiring startup’s journeys.
HOW IT ALL STARTED
It all started in 2007, San – Francisco. Airbnb founders Brian Chesky and Joe Gebbia shifted to New York. Being unemployed were having huge trouble paying their rent and were in dire need of extra cash. To fulfil their cash requirements, they decided to rent out their extra lodging space.
But as Joe Gebbia explains, they didn’t want to post their listing on Craigslist because they felt the website was too impersonal and they decided to put up their own website. A simple blog with maps under the domain name airbedandbreadkfast.com
In those days a design conference was coming to town and as the hotel space was limited and a simple website converted them 3 guests. They offered 3 air mattresses on the floor and home cooked breakfast in the morning, charging $80 from each guest.
A simple idea struck the minds of the founders and they realised the potential of the business.
Late, Nathan Blecharczyk, a Harvard grad and technical architect joined the team as 3rd Co-Founder.
FIRST FUNDING RAISED
Summer of 2008, is when it all started. The founders were in dire need of raising money to expand their growth. For raising money they bought a Ton of cereal and designed special edition cereal boxes releasing the same that fall under the name Obama O’s and Cap’n McCain’s selling the same at $40 a piece.
They managed to get a sale of 500 boxes under their belt helping them raise $30,000 for AirBed & breakfast.
Despite an amazing effort and results from their cereal campaigns, the website was not generating business and the founders faced the lowest point of their life at this point of time But very soon received $20,000 from Y-Combinator in funding.
Y-Combinator is an influential startup accelerator and seed capital firm. Co-founder of Y-Combinator Paul Graham had doubts during the initial stage of the pitch and though the idea was crazy & doubted whether the people will pursue it or not but later on he realised the potential of the business model
Y-Combinator funded the company in Jan 2009, and the website was launched under the domain airbnb in March 2009.
THE SECRET OF AIRBNB SUCCESS
Airbnb even after funding from Y- Combinator was earning 200 dollars a week and was not gaining traction.
Co Founders Gebbia and Chesky flew out to New York Booking with 24 hosts to figure out the problem. They realised that the images used on the listing of the pages were not at all presentable. There was no conversions as the users were not believing they will receive quality services seeing at the images .
A standard corporate solution to this problem was to send emails to hosts and train them for uploading acceptable pictures. Screw that the founders said, they rented $5000 camera and went door to door to capture professional pictures of the listings, covering as many listings as possible in New York.
The strategy worked and the conversion rate tripled not only in New York, Paris, London, Vancouver, and Miami.
HISTORY HAS BEEN CREATED
Rest is history. Airbnb proving it’s worth to the world. The latest stats suggests Airbnb is present in every single country of the world except Iran, Sudan, Syria, and North Korea. That’s 97.95% of the world.
In its first year of life, Airbnb hosted roughly 400 guests. Now, roughly 400 guests check into Airbnb hosts every 2 minutes. Woaaahhhhhhhhhhh….. 26,280000% GROWTH.