Airbnb’s Founders: From Struggle to Success
Every young entrepreneur dreams of success when they start their first business. It was no different for AirBed & Breakfast’s founders: Brian Chesky, Nathan Blecharczyk, and Joe Gebbia. Chesky and Gebbia drew up the original idea in October 2007 and brought in Blecharczyk a few months later. After acquiring their first customers in the summer of 2008, things were looking up for the trio. Unfortunately, this is when their situation took a turn for the worse.
Y Combinator is a startup accelerator created in March 2005. Paul Graham, one of its founders, took an early interest in Airbnb and guided them through Y Combinator. At this same time, the company’s profits started flatlining. Due to the living costs of the three founders, all profits were spent. The founders went on later to state that their entire team had ended up maxing out their credit cards in the process of trying to save the startup.
Luckily, this is when the founders caught a lucky break. Gebbia realized that the images uploaded onto their website of the listings were of quite poor quality. After learning about it, Graham suggested traveling to New York City, taking better pictures, and talking to customers. At first, the team was thrown off by this idea. As far as they knew, every solution had to be scalable. This idea simply was not. Graham put their worries to rest and told them to go anyway.
Fortunately, this idea was simply genius. Airbnb’s (It was around this time that it was decided to change the name from AirBed & Breakfast to Airbnb) revenue went from $200/week to $400/week. This simple change of upgrading their photos quickly doubled their profits. Gebbia believes this was the turning point of the company. The founders learned an important lesson here. Meeting with your customers to solve issues is almost always the best way to come up with long-lasting, well-received, solutions.
This story honestly shocked me when I first started researching it. I mean, how could one simple change, change the trajectory of the entire company (not to mention the trajectory of the lives of the founders)? Additionally, this story demonstrates the usefulness of startup accelerators. All three of the founders were against the trip recommended by Graham that ultimately saved their company. *A few other unicorns that owe their success to accelerators include Twitch, Coinbase, Dropbox, Reddit, Weebly, Instacart, Quora, etc…
During an interview, Gebbia stated, “As part of the onboarding process at Airbnb, the company encourages new employees to ship new features on their first day at the company. It earns them their sea legs and shows that great ideas can come from anywhere”. This idea was new to me. Usually, new ideas come from highly experienced professionals in the company. However, Airbnb’s founders threw this idea into the water. It turns out even simple ideas such as hearting favorable listings, instead of starring, can see a considerable increase in the use of features.
A final consideration, never skip the small things. As shown in Airbnb’s success story, small changes may tend to have unforeseeable changes. Young entrepreneurs may tend to lean toward big changes in the hope that they transform their company. However, small changes may turn out to be the big change that they were looking for the entire time.
