Million Dollar Apps: Story Behind Airbnb
The story of Airbnb is one of the 21st century's most inspirational stories.
With no investors and thousands of dollars in credit card debt, despite all odds, the creators needed to turn to selling cereals to keep the business alive. It took almost two years for Airbnb to have a certain momentum.
The journey started in San Francisco in late 2007. Brian Chesky and Joe Gebbia, the founders of Airbnb, had just relocated from New York. They had difficulty paying their rent without work and were searching for a way to make some extra cash. They found that many of the city's hotel rooms had been reserved, as many participants attended the nearby Industrial Design Conference.
They saw an opportunity here. They purchased a pair of airbeds and quickly set up a platform named "Air Bed and Breakfast." The plan was to give the morning sleep and breakfast to tourists. They were paying $80 a night each. The concept succeeded and the first Airbnb guests were: a 30-year-old Indian man, a Boston-born 35-year-old woman, and a Utah-born 45-year-old father sleeping on their floor.
Soon after, Nathan Blecharczyk, alumni of Harvard and professional architect, joined the team as their third co-founder. We were confronted with a big problem: the platform had just two subscribers, one of them being Chesky. They initially launched at SXSW and received only two reservations.
Airbnb Funding History
Airbnb raised its first funding, $20,000 from Y Combinator. After this, the company gained some recognition. In March 2009, Airbnb had 2500 listings and approximately 10,000 registered users.
In November 2010, they received a funding of $7.2 Million. By February 2011, it reached its 1 millionth booking. In July 2011, Airbnb received a whopping $112 Million. In January 2012, they reached 5 million bookings.
The bookings doubled from 5 million to 10 million in June 2012. In August 2014, they received $475 Million in funding. The billion-dollar funding ($1.5 Billion) in June 2015. The rest, as they claim, is history.
Acquisition and Going Public
Airbnb has developed its services since 2016 through several high-end openings and acquisitions parallel to its core business. Here is the current list of strategic releases and acquisitions Airbnb has made since 2016:
- (2016) Airbnb Experiences, launch: "one-of-a-kind activities hosted by locals."
- (2017) Luxury Retreats, acquisition: a global "luxury vacation rental company."
- (2017) Niido, launch: "home-sharing in new apartment buildings that will be optimized for home sharing and flexible living."
- (2018) Airbnb Plus, launch: a "tier of homes on Airbnb that have been personally verified for quality and comfort."
- (2019) HotelTonight, acquisition: An app and website that helps people book last-minute hotel reservations.
Airbnb revealed its intention to go public in the year 2020 in September 2019. The company did not indicate an exact timeline apart from "during 2020". Airbnb has not clarified that it has completed its S-1 IPO documents confidentially, which will provide essential financial details for review from prospective investors.
How does Airbnb differentiate itself?
Airbnb is not the first company to introduce vacation rental services. Several companies offered this service but none of them were able to be as successful as Airbnb in terms of growth of growth and market share. So what sets Airbnb apart from its predecessors? Let's take a look at examples.
Couchsurfing is a service that began before Airbnb. It offered a platform to connect local homeowners with travelers to help them find a place to stay. This service was convenient for people looking for a temporary place to reside for a certain occasion. It didn't offer primary residing options that Airbnb does.
Another example includes VacationRentals, a service to book houses, cabins, etc. for holidays and vacations. Since their business model and even the website name was catered towards vacation rentals, it didn't capture the market like Airbnb managed to do. Vacations are temporary and have no fixed season or duration.
On the other hand, Airbnb provided primary residence solutions that these services failed to do so. Other examples include HomeAway and VRBO, which again are vacation focused. Another sector that Airbnb succeeded in was capturing the millennial market that others failed to do so.
The latest figures indicate Airbnb currently has more than 5 million listings in more than 200 countries and 81,000 cities. More than 40 million visitors are served by Airbnb operators. The company is valued at $38 billion currently.
Recently, due to the economic impact of the Coronavirus outbreak, Airbnb decided to layoff 25% of its workforce. 1900 employees out of the total 7500 employees were laid off by the company in May 2020.
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About the Author
Rajib Roy
Rajib Roy, a seasoned industry professional with 18 years of experience in developing groundbreaking tech projects. With six published books available on Amazon, his expertise is recognized worldwide. Rajib Roy is the visionary CEO and Founder of Royex Technologies, leading the way in innovative solutions.