The History of Airbnb
Short-term rentals have been around for quite some time, but it was Airbnb that strengthened the short-term rental space with the notion of home sharing. The history of Airbnb is the success story of an ambitious startup, showing how a couple of housemates with an idea were able to revolutionise online accommodation. While Airbnb has been privately owned and independently operated throughout its history, similar to the history of Booking.com, Airbnb was founded from a simple idea made possible thanks to the internet.
The original idea for Airbnb was born out of necessity, when co-founders and housemates Brian Chesky and Joe Gebbia were struggling to pay their rent and came up with an inventive way to make some extra money. The two designers had noticed that a local industrial design conference resulted in San Francisco’s surrounding hotels to be completely booked up, so they put down three air mattresses and offered a bed and some breakfast for any designers who needed a place to stay during the conference. Rather than using Craigslist, which felt “too impersonal” to advertise their space, Chesky and Gebbia built their own site called airbedandbreakfast.com.
After hosting three designers for $80 a night during the conference, Chesky and Gebbia realised that they had stumbled across an idea worth developing. They quickly enlisted the help of Nathan Blecharczyk, a computer science graduate and Gebbia’s former housemate, to help them build a more complete website and platform to offer home-sharing between users online. As the website was completed in the summer of 2008, the Democratic National Convention in Denver had caused a shortage of available hotel rooms. The three founders targeted the area and finally had a successful launch with hundreds of listings, yet they still weren’t profiting from the operation and needed money.
With the 2008 US election grabbing people’s attention, Gebbia and Chesky decided to put their design and marketing skills to work and created custom-made Obama-O’s and Cap’n Mccain’s cereal boxes. They sold these “limited edition” cereal boxes for $40 each, and ended up raising $30,000 to put towards the company’s operations. While the custom-designed cereal boxes helped keep the company going, it wasn’t long until venture capitalists began to take note and invest in the company.
At the start of 2009, Paul Graham invested $20,000 and had the company join his prestigious startup accelerator, Y Combinator. This allowed Airbnb to spend a few months refining their product, while also attracting other venture capitalists’ funding. In March of 2009, the company simplified its name from Air Bed & Breakfast to their current name of Airbnb, and started growing exponentially partly in thanks to a $600,000 investment by Sequoia Capital. Other investments soon started rolling in, and in the span of a couple of years Airbnb had become a profitable and globally operating company.
Part of the immense success throughout the history of Airbnb has been the company’s positive flexibility in the face of challenges. When in the summer of 2011 a host’s home was trashed and ransacked by her Airbnb guests, the company quickly admitted their failings and set up a coverage policy to help protect hosts in case guests damage property or steal possessions during their stay. While Airbnb’s “Host Guarantee” initially covered $500,000 worth of property damage and theft, it was doubled in 2012 to one million dollars. Airbnb has shown a similar kind of positive initiative in responding and largely collaborating with cities to ensure that regulation regarding short-term rentals is respected by their hosts. This being said, the company has also embroiled itself in a variety of legal battles with cities and governments that it believes are wrongfully regulating or restricting short-term rentals.
In 2014, Airbnb decided to redesign its site and logo, with “belonging” as the core ideal behind the redesign. They moved from colder corporate blues to a warm and more welcoming red peach colour, and along with it came a full redesign of the company’s logo. Chesky and Gebbia admitted that the initial logo was born quickly and out of necessity, with their newer logo being an amalgamation of people, places, love, and the “A” of Airbnb. The Bélo (the name of Airbnb’s logo) marks a key point in the history of Airbnb and the company’s growth.
Since introducing the Bélo, Airbnb has started to offer more than just accommodation to its customers. Airbnb Experiences is a platform for people to run classes, city tours, and various unique city experiences for anyone interested in booking them. Chesky recently revealed Airbnb’s plans to start creating travel content like movies and TV series, bringing the accommodation giant into the industry of entertainment. Airbnb has also been making moves in the travel sector, with their hiring of the founding CEO of Virgin America airlines Fred Reid. While Chesky said that the company isn’t interested in creating their own airline, in the past he has clearly stated his desire to revolutionise the travel industry, with Reid’s inclusion bringing Chesky’s ambition closer to reality.
Just as interesting are Airbnb’s plans with their recent purchase of ten stories of the Rockefeller Centre, as the company is preparing what seems to be a hotel-like service with designated Airbnb rooms. While Marriott International and other hotel companies are starting to look into the home-sharing business, Airbnb is already varying, expanding, and improving their services. While the history of Airbnb is already notable, it’s clear that the company intends on building upon its legacy. No longer just a home-sharing platform anymore, it’s clear that Airbnb has disrupted the hotel and accommodation sectors as the company prepares for what will likely be a monumental IPO launch by the end of 2019.
