Each year, at every university in the world, students meet for the first time. It’s very common that people with like-minded ideas and thinking gravitate towards each other. Often, they discuss dreams and visions for their futures – some seem likely to occur – others seem to be a bit of a stretch. Such was the case when Joe and Brian met at the Rhode Island School of Design (RISD). It was Joe who told Brian that he saw the two of them being entrepreneurs together.
When they graduated in 2004, Brian moved to Los Angeles while Joe moved to San Francisco. Brian became an industrial designer and strategist. Joe designed book covers at Chronicle Books. By 2007, Joe had rented an apartment which was not only in a great part of the city, it was large enough for him to convince Brian to join him in San Francisco. They both quit their jobs, determined to become successful entrepreneurs and fulfill Joe’s vision. It was about that same time that Joe’s rent increased sharply. Zero income coupled with a marked increase in expenses can lead to some very creative thinking.
The guys worked through the night, determined to find a solution to their financial quandary. By morning, they’d combined several items into one seemingly crazy idea. Item 1, they had extra room in their apartment, albeit various spaces on the living room floor. Item 2, there was an Industrial Designers Society of America (ISDA) conference in town. Item 3, hotels in San Francisco were sold out. The crazy idea? Buy air mattresses, place them in the open areas of the apartment and rent the space to convention attendees. To make the deal more attractive, they would include breakfast as part of the package. They created a very basic website, and needing to get the word out, they emailed all the designer bloggers they knew, informing them of the idea. All of the major blogs gave them a feature mention and three people booked a stay, each paying $80 per night.
All three renters were over 30 years old and included a web designer from Boston and a graduate student from India working on an artificial intelligence project. Suddenly, the crazy idea wasn’t so crazy. The idea became real. The guys added a third partner, Nate, a technical engineer. They decided to bring the concept to conventions across the country – the first one being South by Southwest (SXSW) in Austin. They rented two spots, but learned that offering online pre-payment would make the entire transaction more palatable.
On to the Democratic convention in August of 2008 where Obama supporters would rent space to Obama supporters. Their business saw a huge spike. That spike lasted only as long as the convention. The guys were back to broke and needed funding. Again, desperate conditions spurred creative thinking and a new strategy evolved. Joe and Brian decided to become cereal entrepreneurs. Literally.
Thinking of their core business led them to think about breakfast, which in turn, led them to create the idea of selling limited edition boxes of cereal. With the presidential election a hot topic, they guys introduced two new cereals – ObamaO’s and Captain McCain’s. They made 500 boxes of each brand, numbered them as collector’s items and offered them for $40 a box. With the help of national media coverage, another crazy idea worked. They netted $30,000 which would be poured into their business.
The combined dedication and relentless work led to the company being accepted into venture capitalist Paul Graham’s seed capital firm, Y Combinator, a difficult accomplishment by itself. Graham at first said that the idea was terrible and attempted to convince the guys to open a bank instead. Joe and Brian stood firm, the concept was further vetted and received additional funding It expanded to full rooms, then full apartments and then houses, boats and even tree houses. Today, the company is valued at over $30 billion with 2.3 million room inventory across the globe. This year, they celebrated their 100 millionth guest. That company, Airbnb (originally AirBed & Breakfast) has been built as a fearless brand. Its creation and success result from the efforts of three fearless brands Joe Gebbia, Brian Chesky and Nate Blecharczyk.
Fearless Brands are creative, relentless and dedicated
At RISD, when Joe first told Brian that he saw them being entrepreneurs together, Brian laughed. Not only was he not in a position to take the notion seriously at that time, neither man could have foreseen where such a partnership would lead. Once they made the commitment to walk that path together however, things were certainly different. They were committed to succeeding – through creativity, relentless effort and an unyielding dedication.
Another key to their success was being open to learning and then evolving. Their first three tenants showed them that the concept was valid and helped them to improve their website. In Austin, at SXSW they experienced first-hand what it was to be a guest and discovered the need for a non-cash payment system. The Democratic convention taught them that the business could thrive – given the right circumstances. Joining Y Combinator exposed them to an incredible amount of experience, advice and support.
The company continues to grow and evolve. Airbnb has more room inventory than the three largest hotels in the world – combined. They are worth more than the world’s largest hotel chain – Hilton and dwarfs by 8 times their closest competitor, Expedia’s HomeAway. The company is not without its challenges and its detractors. There are questions as to their conformity with the Civil Rights Act of 1968. There have been issues with property damage and host security. There is concern as to how, if and by whom Airbnb should be regulated. No company is without issues. The key is how they are dealt with and Airbnb seems to move in the right direction on that front.
There’s much to learn about building a brand – building your brand – from Airbnb and its founders.
Sometimes it’s the crazy ideas that succeed – It’s said that need is the mother of invention. In this case, and many others, the need was money. Joe and Brian were faced with needing to survive in their existing lifestyle. Rather than panic, accept defeat or go back to corporate jobs – they began to ask themselves – “What could work?” They couldn’t have ruled out much – how else do you come up with the thought to buy airbeds that people would rent to sleep on your floor? Creativity launched them as cereal entrepreneurs, gluing boxes together in their living room and filling them with the cheapest store-bought cereal they could find. Don’t rule out the crazy ideas. They may not work, they may not make sense for you and your brand – but then again, they just might.
Be diligent, be determined – There’s not a single overnight success who really achieved success overnight. Airbnb is no exception. Growing from an idea to a $30 billion company in eight years may seem to some to be an easy path. It wasn’t. Joe, Brian, Nate and the entire company has worked tirelessly over countless hours and nights to build Airbnb. You too have to be diligent and determined. It’s one thing to have an idea – crazy or not – but the idea is wasted without the effort.
Have fun – If you see and/or hear Joe and Brian speak, you’ll quickly realize that they have a great sense of humor. Do they take their business seriously? Absolutely. It’s their ability to be free in their thinking and laugh at ideas – and at themselves – which has helped them succeed. If you can’t find the fun, you’ll find misery soon enough. Be certain that you find the passion for what you do. Always look for the bright side.
The story of two young professionals unable to make rent becomes the business success known as Airbnb. You and I are unlikely to find success on that level – but then again – crazier things have happened. Build your fearless brand. Embrace crazy ideas, work hard and have fun.