Brian Chesky and Joe Gebbia, the billionaire founders of Airbnb, met when they were just design students at Rhode Island School of Design (RISD). During this time, they became good friends and discovered that together, they make a great team. By the end of their college, they initially went their own ways.
Until years later. While working for an industrial design firm in Los Angeles, Brian has missed the idealistic entrepreneurial spirit of his time at RISD. He then visited Joe, who at the time, worked in San Francisco as a graphic designer. Brian then fell in love with the city’s energy, creativity, and entrepreneurship, which made him decide to move to the Valley.
They eventually moved into a three-bedroom apartment in San Francisco together, with the idea in mind of starting a company together. They shared an apartment that they could not afford, so they had to find a solution to pay the rent.
One weekend, a big design conference was coming and the event would attract thousands of designers to the city and the hotels would be filled with dizzying awards. So, they had the idea of making a guest room from their apartment.
They invited Nathan Blecharczyk, one of Joe’s old roommates and brilliant developer, to join them and to create a website for their idea.
Then, Airbed & Breakfast was born.
In the beginning, it was just an experiment. They thought the idea of renting a room in their own house from a complete stranger was too crazy. Sooner or later, they started thinking about the idea’s potential. What comes after is history.
More than a decade later, Airbnb goes public and on its first trading day, the company goes up to 100 billion dollars in valuation. Knowing the founder’s story, they definitely deserved it. They were real hard-headed entrepreneurs who did everything for Airbnb to survive.
Here are the 4 timeless principles you can learn from Airbnb if you are starting a business or one day thinking of starting one.
1. Meet your people (customers & users)
At the time, most of the early Airbnb customers were in New York City. During their three months at the Y Combinator, Joe and Brian traveled to New York City almost every weekend. They contacted their first users and in doing so, they were able to overcome major setbacks in their business model and provide Nathan with important feedback from their users.
They found that some people wanted to offer a room with a regular bed (instead of an air mattress) and others wanted to rent their entire house to people without being present. Paying off their debts was a good step, but they still couldn’t make AirBed & Breakfast a successful business.
That’s when Michael Seibel convinced them to join Y Combinator, a Silicon Valley startup incubator. Participating in Y Combinator turned Joe, Brian, and Nathan into real players. Paul Graham, one of the founders of Y Combinator, taught them the importance of knowing their customers and using their feedback.
In the beginning, it was not allowed not to be present, because “Airbed” and “Breakfast” were part of their mission and their name. But seeing that they were missing out on a great opportunity, they skipped breakfast and added the option to rent an entire house. They changed their name from AirBed & Breakfast to Airbnb.
And within three months, they became successful and were finally able to build a profitable business.
This wouldn’t be possible if they hadn’t met their people and talk to them.
2. Get used to rejections
Brian Chesky wrote a story listing the remarkable 7 rejections they received in the early days of Airbnb. You can read more here.
Joe and Brian’s attempts to engage an angel investor turned out to be lessons in rejection. Most investors, Michael Seibel, also introduced them, turned them down without meeting.
All the meetings they organized turned out to be a disaster. Investors thought the idea of renting a room to a complete stranger was crazy and very risky. They also had serious doubts about Brian and Joe’s career in art school.
But the founders did not back down, and many investors regularly visited Y combinator. One of those investors was Greg McAdoo of Sequoia. A famous venture capitalist who had financed companies like Google, Apple, and Oracle. He was impressed with Brian, Joe, and Nathan’s philosophy of community building and the way they used social mechanisms and technology to solve trust problems.
Just after a few weeks, the founders of Airbnb got a Sequoia term sheet with an investment of $ 585,000. And that’s the start of another chapter in Airbnb’s book. After all, it’s a numbers game, the more you try, the higher your chance of succeeding.
So, get used to failures and rejections if you want to become successful.
3. Design is everything
Airbnb designs for trust. What this means is that due to the nature of its business, they have to find a way through design to build trust and credibility between users. People nowadays are still scared to open up their homes to strangers, let alone 10 years ago.
However, this is where Airbnb succeeded. They made it easy for hosts to trust strangers and strangers to trusted hosts. They did this primarily using a rating and feedback system.
A major key factor in Airbnb’s success is its focus on the design and user experience of the platform. This is due to Gebbia and Chesky’s background in design and this is where Airbnb differs early on from then existing websites such as Couchsurfing.com and Craigslist.com.
Also, when designing the platform, they implemented Steve Jobs’ three-click rule, where you have to always be three clicks away from an end goal.
From the start, Brian Chesky and Joe Gebbia insisted on the design and experience of the website. The ads had to look good. Building on Steve Jobs’ famous three-click rule, the founders also wanted their users to never be more than three clicks away from a reservation.
Design is how everything works, thus, the design is everything.
4. Build a cult-like movement
Airbnb is both a movement and a business. The Airbnb movement is made up of millions of people around the world who have booked accommodation.
Allowing people to rent cheap accommodation instead of an expensive hotel room is one of the main reasons Airbnb has been so successful.
The other reasons are less obvious. Many travelers are unhappy with standardization within large hotel chains. They seek unique, authentic, and personal experiences. This is where Airbnb is different.
Airbnb offers experiences that hotels can’t and don’t.
Another reason for Airbnb’s success in building a powerful community in its idealistic, goal-oriented mission statement to “belong anywhere.”
This mission goes beyond the personal bond between a host and a guest. It’s about the opportunity to stay at someone else’s home and explore neighborhoods and places that you wouldn’t normally visit.
Sleeping in an Airbnb is a personal experience, even if the host is not there. To ensure that Airbnb hosts provide guests with a great experience, Airbnb provides their hosts with tips, rules, and tips. On top of that, they provide an online community where new hosts learn from the experiences of the hosts.
Build a cult-like movement and be clear about your mission statement and who are you fighting for.
Back in 2008, Joe Gebbia, Brian Chesky, and Nathan Blecharczyk started Airbnb without much experience. Today, more than 10 years later, they are still running the business with more than 100 billion in valuation. Their difficult journey was filled with obstacles, roadblocks, and challenges. However, they learned to overcome them altogether.
They had the talent, strong leadership skills, and the willing, curious mind to do it. They were interested in what they were doing and built strong relationships with the people who would help them. They overcame adversity.
Brian, Joe, and Nathan were able to turn a crazy simple idea into a successful billion-dollar business that changes how people travel the world. We hope this summary will help you as an entrepreneur to start or grow your business and eventually make an impact on humanity. If you have any questions, comments, or suggestions, please let us know. We will be happy to discuss.
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