How Airbnb Become Big Startup

How Airbnb Become Big Startup

How did Airbnb become a big startup?

The idea comes from my head after hearing about the small hotel in Bali that using this app. A lovely hotel with an affordable cost with a nice view. First, I think it’s made of five-star hotel management.

I like to visit Bali to create another side hustle.

Surprisingly I read that Joe Gebbia and Brian Chesky initially established the project to relieve the economic difficulties.

Chesky was disappointed with his job, especially when Simon Cowell’s Show sharply criticized his future toilet design.

This complaint is because he feels the job is far from Steve Jobs as a motivator for young Americans as a technopreneur.

Meanwhile, his best friend, Gebbia, lives in San Francisco. His first profession was selling pillows under the CritBuns brand in his apartment.

Out of 800 pillows, he only managed to sell four to a boutique in downtown Providence.

The two founders of Air Bnb at that time were experiencing financial difficulties. Then Gebbia sent a message for Chesky to start the initial idea of ​​​​Airbnb.

Kick Start

This idea grew stronger when Chesky moved to Rusch Street, San Francisco because he didn’t have the money to pay the rent.

Well, one way is to rent another apartment room in San Francisco to participants at the World Design Congress for four days via the internet.

Apartment with internet facilities, bed, and daily breakfast. The Airbnb site was built with simple tools from WordPress in three days.

The site is made of pink and blue colors for the word and concept sections that describe Airbnb providing affordable prices with guides to targets.

Initially, they earned enough money to pay for lodging rentals and realized that this business had many potentials.

This solution came about because they believe that many hotel rates are expensive and Airbnb provides low prices.

Never give up

However, no one expected this business to be big, including Nathan Blecharczk, an engineer from Harvard who co-founder Airbnb.

But Airbnb keeps going.

Trending Le, a student from Vietnam who is currently taking a doctoral program in the US, provides a new stimulus.

Trending believes that the concept of sharing an apartment has a bright future.

Le also introduced one of the entrepreneurs Michael Seibel who has a broad network with Chesky.

Chuscky promoted the Airnbnb idea to Michel Seibel.

Seibel became the primary mentor to gain investors.

Every Friday, Gebbia, and Chesky bring new web designs to Seibel.

They analyze its progress, look for new problems and provide improvements to the system.

They came to the Startup School to study the startup business, which was created by startup incubator Y organized by Stanford University.

Some of the speakers were Amazon CEO Jeff Bezos and Marc Andreessen.

Seibel introduced them to the seven investors.

Chesky told them why he founded Airbnb and asked for one hundred and fifty thousand dollars for seed funding.

He received five outright rejections.

Almost all investors are concerned about Airbnb’s market segmentation.

They assess the lack of closeness to the founder’s profile, with well-known figures in Silicon Valley.

They are not iconic like Mark Zuckerberg or Steve Jobs.

Design students who start up are considered worse off than computer science students who drop out of Stanford.

The situation is getting more difficult.

All of Chesky’s savings were gone. Gebbia is in debt. The founders had almost given up.

Luckily two hundred new guests sign up every week in August.

Airbnb collects around twelve dollars in commission for every hundred dollars a night booking.

Some of the guests included those from the Democrats’ convention in Denver.

Eighty thousand members of the Democratic Party attended the event. It just so happened that The Mile High City didn’t have enough room for the guests at the event.

But then, after that the number of new bookings each week dwindled to below ten rooms.

Again Chesky was frustrated.

These were tough times for the Airbnb project at the time.

Finding the Right Mentor

Paul Graham, a seasoned investor, suggested Airbnb have a presentation chart that shows rising profits.

The Airbnb founder, who at the time had a steady income barely, let alone a profit, was the subject of ridicule.

Graham is also still skeptical of the Airbnb business.

Gebbia and Chesky flew to New York to talk to homeowners who wanted to sign up for Airbnb to convince Graham.

The problem is that they don’t attractively present their online properties.

Most of the photos are grainy and usually taken with an old phone.

Graham found that many property owners have poor marketing styles.

He must help them how to sell goods on the internet effectively.

Graham identified the app as ‘eBay, but for a room or rooms’ and urged them to think of their brand like an auction giant.

Then the founders changed the name from Airbedandbreakfast.com to Airbnb.com to make it shorter.

Reaching Big Fund

Gradually new investors arrived.

Greg McAdoo believes this idea is accurate as long as it can provide satisfaction for consumers.

Then Sequoia, one of the mid-tier Silicon Valley companies that Greg manages, invested $585,000 for about a 20 percent stake in Airbnb.

The formation has also become more transparent for Chesky as CEO, Gebbia as Chief Product Officer, and Nathan Blecharczyk as Chief Technology Officer.

Stay thrifty while it’s all running.

Greg recognizes the greatness of these founders at frugality.

Greg told them to keep investing by beginning to look for new employees because, at first, they refused to hire employees for the consumer complaints department.

The founders work seven days a week in a vibrant, brotherly spirit.

They occasionally take a break to go to the gym or hang out on the roof.

Once a week, they go to a nearby park on Folsom Street to rest and play football.

On Fridays, they usually go to the bar for happy hour.

Creative Marketing

In late 2009 Airbnb created a mechanism that automatically emails anyone who posts a property on Craigslist to rent out their place on Airbnb.

Even if that person doesn’t want to receive unwanted messages, if the apartment is registered in, say, Santa Barbara, the email will read:

“Hi, I’m emailing you because you have the best places on Craigslist in Santa Barbara and I’d like to recommend that you feature them on one of the largest Santa Barbara real estate sites on the Web, Airbnb this site already has 3,000,000 monthly visitors,”

All emails match the targeted city with a Gmail account named female.

This ad invites criticism because it contains spam.

Looking for Niche Market

Nathan Blecharczyk works around this with a clever Facebook ad system by searching for a specific niche or segment.

For the first time, companies ad for hobbies from their member profiles.

If a user is into the hobby of Yoga, they will see an ad from Airbnb on Facebook that reads, “Rent your room to a yoga practitioner!” If someone likes wine, they will see “Rent your room to Wine lovers.”

The Airbnb site got seven hundred thousand bookings in eight thousand cities and started a new app for iPhone.

They know they have to make customer service a priority.

McAdoo suggested they take a lesson from shoe retailer Zappos.

Zappos earns customer loyalty by accepting rejected returns without any questions.

One investor interested in Airbnb is Reid Hoffman, LinkedIn co-founder, chairman, and partner at Greylock Capital.

Hoffman was initially skeptical of the Airbnb project.

Then Chesky met him at the Greylock office on Sand Hill Road to sell Airbnb’s vision of being the world’s largest hotel chain without the burden of buildings or workers.

As a result, Airbnb’s business is growing, reaching various cities globally, including Indonesia.

Over time, Airbnb becomes a big startup to arrive with competitors offering similar services. But until now, Airbnb remains a pioneer, which was initially doubted.

Another article business can you read there.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Arif Wicaksono

Arif Wicaksono

I’m a writer. I usually write about business, economy, and politics. I work as a journalist in Indonesia.