How 2 grads launched a super property rent site startup AirBnB; valued at $1.3 bn in 4 years
NEW DELHI: Since time immemorial, whenever two out-of-work college grads sit on a couch faced with the reality that they have no money to pay the following month's rent, it has usually ended in bad poetry, binge drinking or sheepish calls to parents.
Brian Chesky and Joe Gebbia tackled the problem differently. The solution they came up with one weekend in October 2007 in their San Franciscoapartment evolved into a company that was valued in July 2011 - less than four years from that cold and difficult weekend - at nearly $1.3 billion. Gebbia and Chesky, along with Nathan Blecharczyk, are co-founders of AirBnB, an Internet service that allows property owners to rent out homes or spare rooms. The service, once considered a non-starter - why would people let strangers into their homes? - is now one of the world's hottest startups. It has more than 200,000 listings in 192 countries.
From tiny spaces with little more than a couch, to private islands, tree houses, houseboats, igloos and palaces in Rajasthan, AirBnB has opened up extraordinary variety and a hospitality experience rooted in local cultures. Users who experience AirBnB and the kindness of strangers integral to it are loath to go back to the tyranny of standardised hotel rooms. There are more than 4,500 listings in India. But behind the success of this startup, as Gebbia narrated to ET while we sat in the gardens of an AirBnB-listed Chhattarpur farmhouse, is a story replete with lessons for aspiring entrepreneurs.
Gebbia and Chesky had been friends from the Rhode Island School of Design. In 2006, Gebbia persuaded Chesky to move to San Francisco to "start something". In October 2007, even as the duo had nearly run through their savings, their landlord increased the rent by 25%. "Our situation was bad. We had no money to pay the next month's rent," Gebbia says. They did not even have a business idea.
Y-Combinator Gave Big Help
The Industrial Design Society of America holds a specialised conference around the world once in 20 years. They picked San Francisco in 2007. The week Gebbia read the landlord's missive with a sense of impending doom, San Francisco was abuzz with an acute shortage of hotel rooms for the IDSA conference.They rented out space in their living room that weekend. Gebbia coded and put up a small website advertising their living room. For $80, you got room, airport pickup and breakfast. They pulled out three airbeds from storage. Hence, the name AirBnB."That weekend, we had the time of our lives with our guests. We went to the conference, we took them to our friends' parties, to local cafes," Gebbia says. As he says it, it was these three guests (including a 32-year-old Indian design student, Amol Surve) who wrote to them and urged them to turn this into something. "They wanted a repeat experience. They said, 'We are going to London, do you know anybody there who is offering space similarly?'". When the duo decided to turn the idea into a larger service, they needed a serious tech hand. "Brian asked me if I knew anyone who could handle the tech side. And I said, 'Yes, the guy who was my flatmate before you!'" Nathan Blecharczyk was in the same computer science class at Harvard University that Facebook founder Mark Zuckerberg dropped out of. As it happened, he was in San Francisco and had quit his job two weeks before.
The website they built together came to national attention in August 2008, when 100,000 people landed up in Denver, Colorado, for the Democratic National Convention where Senator Barack Obama accepted the party nomination as its presidential candidate. Denver only had 30,000 hotel rooms. When democrats started using AirBnB to host other democrats, it became a story. "First it was a story in Denver, then CNN called, then theNew York Times, and then The Guardian from London. We were suddenly talked about," Gebbia says. But the euphoria was shortlived. After a spurt of activity, growth plateaued. The website stagnated at weekly revenue of $200. "At this point, we were surviving on our credit cards," Gebbia says.
http://economictimes.indiatimes.com/news/emerging-businesses/startups/how-2-grads-launched-a-super-property-rent-site-startup-airbnb-valued-at-1-3-bn-in-4-years/articleshow/18297803.cms
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