Airbnb seems like a no brainer today. Of course it makes sense! Now providing accommodations to more than two million travellers a night, you would think Airbnb was a home run from day one.
But, that is far from the reality. When Joe Gebbia was trying to sell the world on his idea in 2008, people thought he was crazy. The idea that people would willingly welcome strangers into their homes to stay overnight seemed unimaginable. Joe's family was concerned. He had quit his steady job to pursue hosting guests on air beds in his apartment. This was not exactly the the kind of career that his parents had envisioned for him. Fast forward ten years, I think Joe’s parents are quite proud.
"It was completely demoralizing. There was nothing else going on in my life besides this, and to put it in front of very credible investors, the guys that had picked the Googles, PayPals and YouTubes of the world and for them to look you square in the eyes and say, 'this is weird, I am not investing in this.'"
5 Key Lessons:
Setbacks are blessings in disguise. One day Joe received a letter in the mail from his landlord. His landlord was politely letting him know that his rent would be increasing by 25% next month! Joe wasn't sure his bank account would make it and this dire situation kicked his creative thinking into gear. He thought up the idea of renting out the extra space in his apartment to make some extra cash.
Great ideas start out as polarizing. The best business concepts are not always obvious, otherwise someone would have already done it! If your business idea has die hard fans as well as people who think it is crazy, you are on to something.
Talking to your customers is the best way to improve your business. Joe went to New York to visit all 30 of the first Airbnb hosts and sit down with them for hours to understand their point of view. This allowed him to see the inefficiencies of their business and fix them. After this, Airbnb's revenue doubled in 1 week.
Think way outside the box. In desperate need of cash flow, Joe came up with a very unique idea, to sell limited edition breakfast cereal for the presidential campaign. He created 500 boxes of "Obama O's" and "Cap'n McCains" which gained so much publicity that they ended up selling for $40 a box. This generated $20,000 and allowed them to fund Airbnb.
Stick with it no matter what. It took two full years and three failed launches before Airbnb received any real traction and validation. For more than 730 days, Joe worked on his idea passionately before finally tasting some success.
Most Surprising Thing I Learned:
To keep Airbnb alive when there was no money coming in, Joe went through credit card after credit card, maxing them out to keep the lights on. There was zero growth and people thought Joe and his idea were crazy. But ever since the first time he hosted three strangers in his own apartment he knew he was onto something. These people who started off as strangers ended up developing into life long friends during their stay. In fact, Joe actually attended the wedding of one of them recently! He trusted the gut feeling and bet the farm to bring his idea into the world.
It is quite hard to believe that Airbnb, a company so prominent and loved today had such an arduous journey to success. Joe's story with Airbnb is packed with amazing lessons and inspiration. From not being able to afford his own rent he has become the creator of one of the largest players in the rental world. One of the main lessons I learned was to always look for opportunity in adversity. Whether you are facing a dwindling bank account or hearing that your idea is crazy, look for the bright side and how you can flip the odds in your favour. Another golden nugget I picked up from this episode was Joe’s the habit of thinking outside the box. Airbnb exists today because he had the idea to create limited edition cereal boxes. You cannot make this up; this is pure creativity and solution based thinking at work!
If you have been told that your idea is crazy, stick with it, because like Joe, you may be onto something.