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The Story Of How Airbnb Turned Homeowners Into Hoteliers, Inspired By A Marketing Stunt For Cereal
Discover the story of how Airbnb became the successful business it is today.
This platform helps travelers around the world connect with people who can rent them out spare rooms or apartments for a night, a week or even longer.
While it sounds risky, Airbnb has done its part to curtail any such fears by implementing safety procedures and strategies to ensure their users have an enjoyable experience using the platform.
As of 2016, Airbnb had estimated revenues close to $1.6 billion, and according to predictions this number will be closer to $8.5 billion by 2020!
It seems unbelievable that a company less than 10 years old could become such a powerhouse in just that short amount of time.
Learn how all this came about – from why they spent six months finding just one employee, right up to how cereal helped them get on the right track!
Get the full story here and find out what drove this unprecedented success in hospitality industry!
How A Risky Idea Led To The Creation Of Airbnb
Airbnb’s incredible success story began with two broke designers in the city of San Francisco.
Brian Chesky and Joe Gebbia were graduates of the Rhode Island School of Design, but they still struggled to pay their monthly rent, which was a cool $1,150.
Desperate to make some money, they resorted to creative thinking to see if they could find a solution.
They soon realized that a conference taking place in San Francisco would result in a shortage of hotel rooms available, and decided to capitalize on this by offering air mattresses in their own apartment for people attending the event.
This new venture was named AirBed & Breakfast, and the two advertised it on design blogs.
In just a few days, three customers had made bookings.
And from thereon out, the duo thought about how they could expand their business by becoming middlemen for other people’s apartments.
After events like South by Southwest festival in Austin and the Democratic National Convention in 2008, as well as attracting positive press attention from outlets like The New York Times resulted in dozens of bookings from across the country – and this is where Airbnb’s success began to take off!
How Desperation And Creativity Led To The Rise Of Airbnb
The Airbnb story really took off when the trio of founders came up with a funny marketing stunt to make some money – selling Obama O’s and Cap’n McCain cereals.
Although they didn’t make a lot of money from it, they managed to attract the attention of tech billionaire Paul Graham who greatly appreciated their tenacity.
At the same time, they were becoming more flexible in their approach by allowing people to rent entire apartments instead of just air mattresses and breakfast for short stays.
This was how AirBed & Breakfast became Airbnb.
In addition, Greg McAdoo from Sequoia also invested in Airbnb with $585,000 believing that the vacation rental business was worth $40 billion.
With this investment and renewed confidence in the idea from McAdoo, Airbnb’s value catapulted to $2.4 million!
It was at this moment that Airbnb truly started taking off.
The Power Of Creating A Human Exchange To Build Trust: The Story Of Airbnb
As Airbnb grew, the company stayed true to its mission: to foster a unique human exchange and put a personal touch into everything they do.
This was exemplified by their requirement for each apartment to have a kind welcome packet or host on site to greet guests.
Moreover, Airbnb’s core values, which included passion for humanity, commitment to hardworking helpfulness, and playful innovation, stayed intact throughout growth.
To maintain such values in their culture, the airline took on fundamental importance on hiring people who embodied these ethics—which would eventually become successful with the hiring of Nick Grandy after 6 months of searching.
Hosts were just as embracing of Airbnb’s mission as well; many were eager to take part in it by contributing to its growth and sharing their favorite hangouts with travelers.
This sense of trust between hosts and travelers played an important role in Airbnb’s continued success.
All of this was encapsulated under one phrase: “Belong Anywhere.” Ultimately, it is through the dedication to cooperate these core values that allowed Airbnb to become so successful over time.
How Airbnb Revolutionized Online Bookings Through Sophisticated User Interfaces And Customized Payment Options
When Airbnb first started out, one of the biggest challenges they faced was designing a well-oiled payment and booking interface.
After all, it needed to be simple enough that customers could book accommodation in just three clicks.
The challenge was further complicated when it came to sorting out the payment procedure – not only did Airbnb need to receive a service fee for customers and hosts, but it also had to figure out a way to hold the rest of the money until the customer is satisfied with their accommodation.
Luckily, one of Airbnb’s co-founders Joe Gebbia along with Chief Technology Officer Nathan Blecharczyk were able to devise an incredible solution by customizing PayPal into a tool that works 24/7 across global markets and currencies – exactly what Airbnb needed for its payment system.
Nowadays, with over 3 million active offers in 191 countries and 140 million guests checked in since its launch, Airbnb can rely on its well-developed user interface for smooth operations – thanks largely due to the work done early on by Chesky & Gebbia and Blecharczyk.
Airbnb Takes Safety Very Seriously, Introducing A Variety Of Measures To Ensure Customer Safety And Security
Safety had been a major issue for Airbnb ever since the company’s inception.
In 2011, an incident involving an Airbnb host, EJ, whose apartment was trashed by renters proved this point.
She wrote about how her spirit had been stolen after the incident but still believed that 97% of Airbnb users were honest.
Additionally, when Airbnb finally responded to her email the following day, they offered emotional and financial support.
In response to this incident and similar ones that happened around the same time, CEO Brian Chesky apologized and raised the Host Guarantee insurance offered by Airbnb from $5,000 to $50,000 and launched a 24-hour customer service hotline.
To tackle safety issues once posed a major issue for the company even further, Airbnb devised a sophisticated system of safety precautions.
These included user review systems introduced by the founders as well as background checks on US users in order to verify their identities.
They also implemented a triage system which assesses threat levels based on reported concerns so that they can be effectively addressed in order of priority.
Finally, they employed 250 people who comprise their Trust and Safety team to intervene in potential conflicts before things get out of hand.
How Michael Luca’s Studies Exposed Racism On Airbnb And How The Company Responded
Racial discrimination has been a hard truth for Airbnb to come to grips with.
In 2014, Michael Luca’s study showed that nonblack hosts could charge up to 12% more than black hosts for the same accommodation, suggesting overt racial bias by hosts on the platform.
Airbnb was quick to deny the results, but just two years later came out with another study confirming discriminatory practices against guests based solely on their African-American names.
The story of Quirtina Crittenden highlighted and spread the issue even further when it revealed that she had been turned down multiple times by hosts simply because of her race.
#AirbnbWhileBlack quickly gained traction as individuals shared similar experiences – sadly showing that the systematic racism that so heavily permeates society still extends online.
The company was forced to act fast in order to create an environment where everyone feels welcome and included – starting with Chesky’s public apology and admission of fault from “the three white guys” who founded Airbnb.
Following this, they issued an Open Door policy, took photographs out of decision-making processes and put greater focus on user reviews as well as training for hosts in unconscious bias.
Airbnb’S Battle With New York: A Case Study In Regulatory Compliance And Protecting User Privacy
As Airbnb has grown, it has come up against a number of legal issues.
In many places, it’s illegal to rent out apartments on a short-term basis and certain listings have been found to violate local rental laws or building regulations.
Fortunately, the company was able to sign agreements with some municipalities to bring these rentals up to code.
Furthermore, they proposed new frameworks for short-term rentals including the right to tax them in cities big and small from Chicago to Paris.
But not everyone was pleased with Airbnb’s growth – some cities are opposed to its very existence due to the disruptions they believe it causes.
The toughest resistance coming from New York – their largest US market worth around $450 million annually.
Here, elected officials, affordable housing activists, hotel representatives and locals alike have all voiced their criticism citing peace and safety concerns involving weekend guests for example.
Consequently, in 2010 New York changed its Multiple Dwelling law making it illegal for landlords without permanent residents present in buildings with over three units from renting out apartments for more than 30 days.
To combat this, Eric Schneiderman requested records of all Airbnb bookings which resulted in a report showing that 94 percent of hosts had one or two apartments listed while the remaining 6 percent being commercial hosts indicating that Airbnb never supported corporations and instead is devoted to helping people pay mortgages while also adding potential consumers in non-touristy areas.
In response to these situations Airbnb created the Community Compact pledge stating that their activities should not negatively impact existing housing affordability rates and enforce its One Host, One Home policy in New York City.
Airbnb’s Rapid Expansion And Product Innovation Is Expanding Its Potential Market Share
Airbnb has come a long way since the early days of suspicion and uncertainty.
Now, it’s one of the biggest players in the hospitality industry, with an ever-growing customer base that continues to expand with each passing year.
In fact, Cowen’s survey found that only half of those polled knew about Airbnb and only 10 percent had used it.
However, despite its growing size, there’s still room for growth as 80 percent of people who knew about Airbnb were interested in trying it and 66 percent were ready to use the service within the next year.
The company has also seen huge success abroad, such as Chinese travelers increasing their usage by 700 percent in 2015!
As if that weren’t enough, Brian Chesky is working hard to develop new products for Airbnb to make sure that they remain relevant.
From Experiences curated by local experts to multiday trips around the world, there are countless offerings to explore!
With a rapidly expanding customer base and new products coming online everyday, Airbnb’s future looks bright indeed!
Wrap Up
The final summary of the Airbnb Story is that, with hard work and ingenuity, anything is possible.
What began as a creative solution by college graduates who couldn’t afford their rent quickly blossomed into one of the most popular accommodation platforms in history.
This shows just how much can be done if you put your mind to it.
It’s an inspiring story that serves as a reminder to all of us that, with a little bit of ambition and determination, anything can be achieved.
