AirBnB is an international private company headquartered in San Francisco, founded in 2008, that provides hospitality service and an online marketplace which can be accessed by their websites and mobile apps. Members can arrange or look for lodging service, primarily tourism and home stays experiences.
Now the question is How AirBnB made billions with this startup?
According to a research, into huge companies that had speculated, they may launch an IPO in 2019, includes AirBnB. I went through the full story of AirBnB and was amazed that how simple was the business model actually. It all stemmed from the founders being open minded and seeing the problem as an opportunity. The greatest fact about entrepreneurial mindset is they see the problem as an opportunity and the exact same they did.
Often times, the best business ideas are in front of us in the form of problems but we don’t see them as an opportunity. I always think that we should take a leap of action first then figure out the technical parts later.
Let’s dive into the story behind success of AirBnB.
1. Seize an Opportunity
Brian Chesky and Joe Gebbia (founders of AirBnB) were sharing a loft apartment in 2007 in San Francisco. There was a major design conference in the town. So, Gebbia and Chesky realized that attendees would struggle to find rooms to stay, almost every hotel was booked. And Gebbia and Chesky were struggling to pay their rent, then an idea came to their mind that they should offer people to sleep in their room and pay the rent. They offered strangers to sleep on two Air-Beds and eat home-cooked breakfast.
In this way, they shared their rooms for rent and started to create a business with this idea.
2. Start Thinking Big
The team decided to change their accommodation model to allow people to list their own places online through a website. So, they created a website named ‘AirBednBreakfast.com’ and gained revenue through a fees of 6% – 12% on each listing. The small team originally sold breakfast cereals to raise the cashflow.
They gained a huge revenue with this business model because they were also selling breakfast cereals to the consumers. It was due to their big thinking.
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3. Adjust, Expand & Profit
In 2008, the name was shortened from ‘AirBednBreakfast’ to ‘AirBnB’ and people were able to book whole properties, boats and even private islands. There have been hitches but AirBnB have recognized them and even introduced a 24-Hour helpline.
They are now in 81,000 cities, have raised $7 Billion since march 2017 in venture capital. The best part is it is now worth at $38 Billion and after launching it’s IPO in 2019, it will be worth more than UBER at $120 Billion
Did you see, a small startup, started from a rented loft apartment, is worth at $38 Billion. Why not we see a problem as an opportunity? If they can do so we can too!
we just need to think smart. Just try to see a problem as an opportunity and you can also build a business like AirBnB.
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