Airbnb Startup Story and Early Growth Tactics
The Story of Airbnb:
Airbnb is one of the multinational startups that need no introduction. However, the early days of Airbnb were tough. It all started back in 2007 when two roommates, Brian Chesky and Joe Gebbia, were struggling to pay their rent in San Francisco. To make ends meet, they decided to rent out space in their apartment to attendees of a design conference happening in the city. They inflated an air mattress and provided basic amenities to their guests, offering an affordable alternative to expensive hotels.
Realizing they were onto something, Chesky and Gebbia teamed up with their former roommate, Nathan Blecharczyk, and officially founded Airbnb in August 2008. The name “Airbnb” stands for “Air Bed and Breakfast,” reflecting their original idea of renting out air mattresses + offering breakfast to their guests.
In order to validate their concept and gain traction, the founders launched a website that allowed people to rent out their spare rooms or entire homes to travelers. They started small, targeting major events that caused hotels to sell out, such as conferences and festivals. The founders would personally go to these events, meet potential hosts, and take professional photographs of their accommodations to make them more appealing to potential guests.
Initially, the growth of Airbnb was slow, and the founders faced numerous challenges. They encountered skepticism from potential investors and struggled to gain widespread acceptance in the market. However, they persisted, continuously refining their platform and improving the user experience.
At this early stage, they were getting a lot on NOs from investors, when it comes to investing in Airbnb, thus to fund their operations, they created and sold 40$ cereals representing the presidential candidates Obama and Mc Cain.
Early Growth of Airbnb:
One pivotal moment came in 2009 when Airbnb participated in the Y Combinator startup accelerator program. This provided them with funding, mentorship, and exposure to a wider network of investors and entrepreneurs. The experience helped them refine their business model and build strategic partnerships.
During this early stage they were told to be where there customers are (at the time mostly New York). Airbnb founders trying to find a way to get in contact with customers directly, started going from host to host offering them professionally taken photos for the apartment/house. At the same time they collected feedback, even at one instance one host had a notebook full of feedback, which ended up becoming the product roadmap.
To foster trust and safety within the Airbnb community, the founders introduced a review system, allowing hosts and guests to rate each other. They also implemented a secure payment system, ensuring that guests’ payments were held in escrow until 24 hours after their check-in, providing a level of assurance to both hosts and guests.
As Airbnb started gaining momentum, it attracted attention from investors. In 2011, venture capital firms Andreessen Horowitz and Sequoia Capital invested $112 million in the company, valuing it at $1 billion. This marked a significant milestone, and Airbnb began expanding its services to international markets, further accelerating its growth.
Over time, Airbnb evolved from offering air mattresses to a diverse range of accommodations, including apartments, houses, and unique properties like castles, treehouses, and boats. The platform became a global marketplace connecting millions of hosts and travelers, offering an alternative to traditional hotel stays.
Today, Airbnb has become a household name, revolutionizing the travel industry.
