The Journey of AirBnB
- Accommodation & Food Services
The two friends that came up with the innovative idea are Joe Gebbia and Brian Chesky, who met at Rhode School of Design. When two roommates in San Francisco were unable to pay their rent, they turned their loft into a Bed'n'Breakfast by adding three air beds and the promise of breakfast the next morning. For the same, they created the website airbedandbreakfast.com. The marketing strategy they used, in which they served as tour guides for attendees of a design conference, is really excellent and brought in new clients. After their first success, they teamed up with Nathan Blecharczyk, an old roommate, to turn the venture into a legitimate company. Instead of sticking to their original plan, they developed a service that matched people who had been looking for roommates for nearly four months only to discover that a company already existed that catered to their needs. They went back to the original concept of the air bed and breakfast after that.
They felt that the second inning was not impressive enough. Despite redesigning the entire website and streamlining the booking process, 15 angle investors turned them down. The company's survival instincts took over since it was losing money. In 2008, they began decorating cereal boxes with political graphics under the names Cap'n McCains and Obama O's Cereal. The selling price per box was capped at $40 and included a limited-edition number and company information. They made close to $30,000 from it. Even now, there is still a lot of discussion over this concept. They were approached by venture capitalist Paul Graham to join Y Combinator, a startup incubator that offered funding in exchange for business shares. Even after that, many investors continued to pass them by. They kept working on their website, writing evaluations and collecting images of the properties, because giving up hope was no longer an option. They changed the name to Airbnb, which is short and to the point, in March 2009. Soon after, Sequoia Capital made a massive seed investment in the amount of roughly $600,000. The company's trajectory changed at this point.
Then came the age of enormous growth. Nearly 89 countries had an Airbnb presence in 2011, and 1 million nights were reserved. It received numerous accolades, and numerous VC firms invested $112 million in the startup, giving it a Silicon Valley Unicorn startup valuation of $1 billion.
No success is without challenges, and Airbnb began to experience them. The rudeness of the visitors and their trashy departure were a source of host complaints. Regarding the same, in 2012 Airbnb released "Host Guarantee," a coverage policy. The lack of Airbnb homes in several cities was a concern for travelers. As the troubles grew, the company chose to alter its logo, which received harsh criticism. New York and other jurisdictions began outlawing Airbnb rentals, imposing limitations like fining the hosts and making it unlawful to rent out a home for longer than 30 days.
Despite the difficulties, Airbnb kept growing.
With over 34 offices worldwide, Airbnb generated $3.6 billion in revenue annually as of 2018. As of March 2020, a total of $4.8 billion had been raised over 10 investment rounds. Due to the worldwide COVID-19 pandemic epidemic, Airbnb has seen a massive loss of $637 million and a 67 percent decline in quarterly sales. 1,900 of its 7500 employees have been let off as a result of the pandemic. Chief Executing Officer Brian Chesky is announcing a recovery with their early June bookings in the States following the significant decline in February. With more countries opening up for travel, people have begun to seek refuge in rural estates, making now the ideal time for industry to make a comeback.