The First Few: Airbnb

Hey, Justin here, and welcome to Just Go Grind, a newsletter sharing the lessons, tactics, and stories of world-class founders! Premium subscribers get full access to this newsletter, exclusive events, event discounts, and more.

I’m editing this edition from San Francisco on a brisk Saturday morning, here for an interview I did for the Just Go Grind Podcast with Dave Fontenot, the co-founder of HF0, the residency for repeat founders.

HF0 was featured in the New York Times a couple of years back and since then has only continued to impress me because of the quality of founders that go through their program.

Take a look at their latest demo day video to see what I mean.

I hung out at HF0 for a couple of hours on Friday morning, talking with a few of the founders who went through the program and doing the interview with Dave.

Later that night, at the HF0 End of Batch Party, I met a few more founders and now I can’t stop thinking about starting a residency. I think the model they have is amazing, but you need the right people to run it - they’ve found those people.

Subscribe to the Just Go Grind Podcast on YouTube, Apple Podcasts, and Spotify to not miss out on my interview with Dave and many other amazing guests coming up soon.

On that note, thanks to Rho and TRIBE for sponsoring the show and to everyone who attended the podcast relaunch mixer last week in Santa Monica - had a ton of fun with all of you!

Finally, I’m excited to announce my partnership with Intros!

I’ve always wanted to partner with companies in different verticals that serve founders and Intros serves an important role helping helping founders hire vetted growth agencies.

More on them below.

Let’s dive in.

Remember that hire who looked great on paper but couldn’t actually deliver?

Yeah, we’ve been there too.

As operators and consultants to some of the fastest-growing startups, we’ve worked with incredible freelancers and agencies that helped scale real growth.

But we’ve also kissed a lot of frogs along the way.

After seeing so many founders waste time and money on the wrong people, we realized our rolodex could save a lot of people from the same pain.

So we built Intros—a service that personally matches startups with growth experts who’ve already proven themselves in real-world projects. If we haven’t personally worked with them, we won’t recommend them.

Oh, and it’s free.

If you’re in hiring mode, let’s talk. If you’re not sure what you need, we can help with that too.

Let’s figure out your next move. Get your free Intro.

Back in 2007, the idea of strangers sleeping in strangers’ houses was almost unimaginable.

Today, however, it’s the premise of one of the world’s top 200 companies by market capitalization.

Airbnb was founded by Brian Chesky, Nathan Blecharczyk and Joe Gebbia after brainstorming ideas to afford rent, that had increased a little too much in San Francisco at the time.

Turned out there was a design conference coming to town that next weekend. So they came up with an idea.

Surely, some conference attendee would be in need of last minute accommodation arrangements. And they desperately needed some extra money. What about turning their house into a bed and breakfast for the weekend?

Well, all they had available was an air mattress in the closet, so they kept it honest with the name: Air Bed&Breakfast.

They had three people come stay with during that weekend. And not only did they make $1000, but they also made long-lasting friendships. So much so that one of them even invited Brian, Nathan and Joe to his wedding two years later.

The story of Airbnb is one of trust. Trust in the product, but mainly trust of people in other people.

That’s no easy thing to do—gaining trust. So how did Airbnb first do it?

TIMELINE 

• 2007: Founded in San Francisco by Brian Chesky, Nathan Blecharczyk, and Joe Gebbia.

• 2010: $8.4 million in estimated revenue.

• 2011: $52.8 million in estimated revenue.

• 2014: $400 million in revenue.

• 2015: $900 million in revenue.

• 2016: Airbnb surpassed their first 50 million bookings and billion dollars in revenue.

• 2017: $2.6 billion in revenue.

• 2019: $4.8 billion in revenue.

• 2020: Airbnb was severely affected by the pandemic, with a revenue drop to $3.3 billion dollars.

• 2021: Reached 300 million bookings and $5.9 billion in revenue.

• 2022: $8.3 billion in revenue.

• 2024: Last year Airbnb got up to 491 million bookings and $11.1 billion in total revenue.

HOW AIRBNB ACQUIRED THE FIRST FEW USERS

• 100 People At A Time. Trying to standardize a lot of people into liking one product feels almost patronizing to Brian. And not to mention, very hard to do. So instead of targeting millions of potential customers at once, their approach was focused on making the best possible experience for each and every customer. This way, Brian says, ‘they become your marketing department’ by telling others about how great your product is.

• A Directory. At the beginning, Air Bed&Breakfast was only meant for major events. It was just easier to predict a high demand for accommodation if there was a specific reason for foreigners to come into town. On that note, they built a website thought to work as a directory. A ‘glorified Craigslist’, Nathan called it. Locals could list their homes and leave a phone number so that people coming from out of town could contact them and stay with them. They launched the site strategically before the South by Southwest Festival in early 2008. This was their very first experience serving as a bridge between hosts and guests.

• ‘Three Clicks To Book It’. This was their motto while building their next website, the one that would later become the Airbnb we know and love. First click: you go on the webpage and type in your destination. Second click: you pick the option you like. Third click: you book it. Simpler than booking a hotel room. They launched it just on time for what promised to be the event of the year, the Democratic National Convention in Denver, 2008. About a hundred people stayed in an Airbnb that weekend.

• No One Wants To Miss The Story. During that time, everyone in the media was talking about how Denver would very likely face an accommodation problem, given how many people were expected to attend the DNC. They went ahead and contacted some local bloggers to hopefully get some visibility on the 800 properties they had available for the event. The next day they got a call from the NBC in Denver to set up an interview. Then CBS and the ABC too wanted to run the story. Next thing they know, Airbnb is on CNN and people all across the country get to know about this new concept for traveling. It was like a snowball effect, a very fortunate one.

• Breakfast For All. After their initial success at the NDC, the numbers were going down very quickly. They needed to do something to stay relevant and not lose momentum. So Joe, Nathan and Brian came up with an idea, quite a crazy one. The name was Air Bed&Breakfast, but they figured they had done plenty for the bed aspect and not so much for the breakfast. So as the election was coming up, they contacted the aforementioned media outlets but not in a traditional kind of way. They made something so peculiar that could not be turned down. They sent boxes of cereal. Politically themed cereal, that is. Who could say no to that?

• Connecting With Early-Users. Co-Founder of Y Combinator Paul Graham gave Airbnb’s founders one great piece of advice once they joined the program. They were struggling to scale their user base, so Paul told them to go straight to where their market was. At the time, that meant flying to New York, where most of their hosts were. At first they dismissed the idea. They didn't have any money to spare, how were they supposed to afford the trip? But they did it anyway, and thank God they did, because that was what later made Airbnb skyrocket. Over the course of four weekends they got to meet every single one of their early New York City hosts. And by visiting their homes and listening to them they figured out a lot of the main issues with the website, issues that were keeping them from growth. A bad review system, an inefficient calendar, and terrible quality listing photos. These were all very easy fixes that managed to move up very stale revenue numbers.

KEY TAKEAWAYS

• The Cockroach Analogy. Remember the cereal story? That’s what got them into Y Combinator, and what ultimately changed the trajectory of Airbnb’s story, because it showed Paul Graham they were resourceful and ambitious. They had manufactured their own promotion strategy with very little money. They had leveraged the contacts they’d made in the media to make it notorious. And they had sold enough boxes to raise over 30,000 dollars. They were being ‘scrappy and unkillable’, like a cockroach.

• They Designed The Infrastructure For An Existing Thing. However strange it may have seemed for 2008, the concept of Airbnb wasn’t a new one by any means. Joe Gebbia says ‘people have sharing homes since there have been homes’. They just built the system around it to do it as safely and efficiently as possible.

Learn more about Airbnb:

• The Inside Story Behind the Unlikely Rise of Airbnb

• Airbnb’s Surprising Path To Y Combinator

In the past two years, we’ve published dozens of deep dives on world-class founders, sharing how they built their companies. These typically take 20-30 hours to research and write. The most recent ones are below:

Best,
Justin

Founder of Just Go Grind

P.S. Hiring? Check out the team at Athyna