The Airbnb Story | Leigh Gallagher

Summary of: The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions . . . and Created Plenty of Controversy
By: Leigh Gallagher

Introduction

Embark on a captivating journey through the story of Airbnb, one of the greatest disrupters of the hospitality industry. Our summary of ‘The Airbnb Story’ by Leigh Gallagher delves into the compelling tale of how three ordinary guys founded a company that would transform the way people travel and stay around the world. Understand the creative thinking and tenacity that led them to overcome obstacles, the company’s core values, the role of trust in the Airbnb community, and the challenges the platform has faced regarding racial discrimination and legal issues.

The Airbnb Journey

Two college graduates, struggling to pay rent, came up with a creative idea to rent out air mattresses in their apartment at an upcoming conference of the Industrial Designers Society of America. This gave birth to AirBed & Breakfast, which involved renting out space in people’s apartments. Although hesitant at first, people soon embraced the idea, and it rapidly grew, leading to successful bookings and attracting press attention. The trio behind the idea continued to pursue it, adding more features to make it user-friendly and eventually called it Airbnb.

From Cereal to Airbnb

Three young entrepreneurs find success in a unlikely place with an innovative bed and breakfast idea.

After their initial success from their work for the DNC, the team behind AirBed & Breakfast found themselves struggling with no website traffic. The team came up with the idea to rebox cereal as a novelty item such as Obama O’s and Cap’n McCain. This led to a $30,000 earning and the attention of tech billionaire, Paul Graham, who provided a three-month mentoring period for the team.

Graham encouraged the team to spend time in New York City, where they found more success. They dropped the air mattress and breakfast requirements and rebranded themselves as Airbnb. By organizing meetings and showing potential hosts how they could make money by renting their apartments, Airbnb started generating $1,000 a week in revenue.

The company’s success caught the attention of Sequoia’s Greg McAdoo, who invested $585,000. Airbnb’s success propelled it to a valuation of $2.4 million. The journey of this young trio from cereal rebranding to disrupting the vacation rental market highlights the importance of creativity and perseverance in entrepreneurship.

Airbnb’s Human Connection

Airbnb’s success was driven by its unique human connection and core values of humanity, hard work, helpfulness, and playfulness. As CEO, Chesky made it his mission to maintain this culture by hiring people who embodied these values. The first employee took six months to hire, as Chesky believed they would determine the company’s DNA. Hosts were also an essential part of Airbnb’s success, contributing to its growth by embracing the company’s mission and sharing their favorite spots with guests. Airbnb’s motto, Belong Anywhere, reflects this human connection and defines its mission.

Airbnb’s Impressive Growth

With 3 million active offers in 191 countries and 140 million guests checked in since its launch, Airbnb’s growth is remarkable. The company continues to expand its user base, with 1.4 million new users joining every week. To ensure a seamless user interface, the founders employed Steve Jobs’s “three clicks away” rule, with booking taking only three clicks. However, payment procedures posed a challenge, with customer service and reviews being critical. A solution was created, with customers paying upfront, Airbnb charging a 6-12% service fee to customers and 3% to hosts, and the rest held until the customer is satisfied with their stay. This was achieved by customizing PayPal into an innovative tool tailored to operate globally, 24/7, across different currencies. Airbnb’s growth has been phenomenal, and its ability to address complex issues shows how it can create effective solutions to suit their business model.

Airbnb’s Safety Precautions

Airbnb understands that accidents can happen, even though the majority of their users are honest. Despite this, the company takes safety very seriously and has put measures in place to prevent accidents and deal with them when they occur. One such measure is the user review system, introduced by the company’s founders, that helps build trust. They also run background checks on all US users and allow users to choose whether to host or stay with other verified ID users. They have a triage system to prioritize safety concerns and a Trust and Safety team of 250 people. The team includes data scientists who use behavioral models to determine the likelihood of crime, crisis managers, and victim-advocacy professionals who work to identify suspicious behavior and eliminate potential risks. While one accident was one too many, Chesky and the company have made significant changes in response, raising the Host Guarantee insurance from $5,000 to $50,000 and launching a 24-hour customer service hotline. Airbnb strives to ensure that their users always feel safe and can focus on enjoying their travels.

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