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The Untold Airbnb Origin Story: From Air Mattresses to Billionaires · Social Proof Podcast

• 0:00
  [SPEAKER_05]: Today I'm going to show you where Airbnb is going.
• 0:03
  [SPEAKER_05]: But before I do, I want to take you back to the year two thousand seven.
• 0:11
  [SPEAKER_02]: Our dimension is, it's two thousand a seven year in San Francisco.
• 0:15
  [SPEAKER_02]: Two broke friends, Brian Chesky and Joe Gebia are staring at their written notice.
• 0:21
  [SPEAKER_02]: One thousand one hundred fifty dollars, dude, no jobs, no investors, just a busted apartment and a dream.
• 0:26
  [SPEAKER_02]: And then, they hear about a design conference in town.
• 0:30
  [SPEAKER_02]: Hotels, they're all booked up.
• 0:32
  [SPEAKER_02]: That's when the idea hits.
• 0:34
  [SPEAKER_02]: So, they're thinking of themselves.
• 0:36
  [SPEAKER_02]: What if we bring out our living room with some air mattresses and serve breakfast?
• 0:41
  [SPEAKER_02]: That was it.
• 0:44
  [SPEAKER_02]: That was air, bed, and breakfast.
• 0:46
  [SPEAKER_02]: You don't even know what Airbnb's stuff is, but it's air, bed, and breakfast.
• 0:50
  [SPEAKER_02]: So, not a business plan, not a startup, just survival.
• 0:55
  [SPEAKER_02]: Trying to get their rent paid.
• 0:57
  [SPEAKER_02]: Now, let's go on.
• 0:57
  [SPEAKER_02]: Brian Cheskey, born in New York, was always a dream grade.
• 1:01
  [SPEAKER_02]: Draw sneakers, furniture, and buildings as a kid.
• 1:04
  [SPEAKER_02]: He believed that design could change the world.
• 1:06
  [SPEAKER_02]: He went to the Rhode Island School of Design, where he met Joe Gebjett.
• 1:10
  [SPEAKER_02]: Now Joe was the opposite, right?
• 1:11
  [SPEAKER_02]: A scrappy hustler in college.
• 1:13
  [SPEAKER_02]: He tried selling animal-shaped furniture.
• 1:16
  [SPEAKER_02]: That didn't work.
• 1:17
  [SPEAKER_02]: So he sold cereal to pay rent.
• 1:19
  [SPEAKER_02]: Joe didn't wait around.
• 1:20
  [SPEAKER_02]: He just made things happen.
• 1:22
  [SPEAKER_02]: So I'm Brian with the San Francisco with two suitcases and no job.
• 1:26
  [SPEAKER_02]: Joe offered him a spot in his apartment.
• 1:29
  [SPEAKER_02]: They were broke, but creative.
• 1:32
  [SPEAKER_02]: They had tried a few startup ideas, but nothing stuck.
• 1:35
  [SPEAKER_02]: And then came their matrices.
• 1:38
  [SPEAKER_02]: So during that design conference, they bought three hair beds, listed the space online, and made it sound cozy.
• 1:45
  [SPEAKER_02]: This was what they said in the ad.
• 1:46
  [SPEAKER_02]: Sleep on our floor will make you breakfast in the morning.
• 1:50
  [SPEAKER_02]: Three people actually showed up from that ad.
• 1:53
  [SPEAKER_03]: Hi, sir.
• 1:54
  [SPEAKER_03]: Lighted me some water in the bathroom.
• 1:56
  [SPEAKER_03]: So yeah, what are you doing mom?
• 1:58
  [SPEAKER_03]: The conference is gonna work.
• 2:00
  [SPEAKER_03]: It's gonna work.
• 2:01
  [SPEAKER_03]: I wasn't very familiar with the whole local food scene and they took me to a taco place.
• 2:08
  [SPEAKER_03]: It was almost like a hole in the wall at that point and so I was wondering where have they brought me.
• 2:15
  [SPEAKER_03]: However, when I look back now, that was a really very authentic and local experience.
• 2:21
  [SPEAKER_05]: How are you?
• 2:23
  [SPEAKER_05]: How are you?
• 2:25
  [SPEAKER_05]: How are you?
• 2:27
  [SPEAKER_03]: I was able to experience the other side of San Francisco.
• 2:33
  [SPEAKER_03]: Once you see that, so up close, you know, that changes your life, it changes your perspective.
• 2:41
  [SPEAKER_03]: And that was really transformative experience for me.
• 2:45
  [SPEAKER_05]: Pretty cool.
• 2:49
  [SPEAKER_05]: It's pretty crazy we have video because that was the only video I took that year.
• 2:53
  [SPEAKER_05]: So it kind of worked out.
• 2:54
  [SPEAKER_05]: Now, something really special happened that weekend.
• 2:57
  [SPEAKER_05]: Our guests came as strangers for the leftist friends.
• 3:02
  [SPEAKER_05]: And as we're waving them goodbye, we thought, you know, maybe there's a bigger idea here.
• 3:08
  [SPEAKER_05]: What if we designed a way for you could book a home as easily as you could book a hotel?
• 3:15
  [SPEAKER_05]: We built a website and no one used it.
• 3:22
  [SPEAKER_05]: But eventually, airing be took off.
• 3:26
  [SPEAKER_05]: It became one of the most successful companies of the decade.
• 3:34
  [SPEAKER_02]: So they called in their old roommate, Nathan Belcharsky.
• 3:38
  [SPEAKER_02]: He was a coder who once wrote code to share pirated files in college.
• 3:44
  [SPEAKER_02]: He was a brilliant builder.
• 3:45
  [SPEAKER_02]: He became the third co-founder of what we now know as Airbnb.
• 3:50
  [SPEAKER_02]: Now, there was three broke guys, one ugly website and an idea that nobody believed it.
• 3:57
  [SPEAKER_02]: I mean, they launched during the worst possible time in history.
• 4:01
  [SPEAKER_02]: The two thousand and eight recession, nobody was thinking about letting strangers in through their home in two thousand and eight.
• 4:07
  [SPEAKER_02]: Think about that.
• 4:08
  [SPEAKER_02]: So they pitched investors.
• 4:10
  [SPEAKER_02]: Some of them laughed.
• 4:11
  [SPEAKER_02]: Some of them ignored them.
• 4:13
  [SPEAKER_02]: One told them, you're renting out air mattresses?
• 4:15
  [SPEAKER_02]: That's not a business.
• 4:16
  [SPEAKER_02]: That's a lawsuit.
• 4:18
  [SPEAKER_02]: That was the advice from one of the investors.
• 4:20
  [SPEAKER_02]: But here's where it gets wild.
• 4:22
  [SPEAKER_02]: And I really, really want you all to think about the makeup of what takes an entrepreneur.
• 4:28
  [SPEAKER_02]: Its election season is Obama vs. McCain.
• 4:31
  [SPEAKER_02]: Joe, the creative one, designed a cereal box.
• 4:34
  [SPEAKER_02]: So he designed two of them.
• 4:36
  [SPEAKER_02]: Obama owes, hoping every bowl, and capped in the canes.
• 4:40
  [SPEAKER_02]: I'm never in every bite.
• 4:42
  [SPEAKER_02]: These were the cereal boxes that they created.
• 4:45
  [SPEAKER_02]: They bought real cereal in bulk, hand glued custom boxes over them, and sold them for forty dollars each.
• 4:53
  [SPEAKER_02]: And saying, right?
• 4:54
  [SPEAKER_02]: I mean, it's got to be a collector's item.
• 4:57
  [SPEAKER_02]: I buy some old bomb holes.
• 4:59
  [SPEAKER_02]: It's a crazy, crazy idea, but guess what?
• 5:02
  [SPEAKER_02]: It worked.
• 5:03
  [SPEAKER_02]: They made thirty thousand dollars from political Syria.
• 5:09
  [SPEAKER_02]: You've got to have a certain level of insanity and creativity and go get it to sell cereal boxes.
• 5:15
  [SPEAKER_02]: It makes thirty grand.
• 5:17
  [SPEAKER_02]: So it's the cereal that kept Airbnb alive and even better.
• 5:20
  [SPEAKER_02]: It got the attention of Paul Graham, who was the founder of Y Combinator, which is a richer, backed, accelerator for tech companies.
• 5:28
  [SPEAKER_02]: They invest in companies.
• 5:29
  [SPEAKER_02]: So Paul didn't love the idea of people running out their homes, but he said anyone who can sell cereal like that has what it takes to run a company.
• 5:37
  [SPEAKER_02]: So Airbnb got into the white commentator.
• 5:40
  [SPEAKER_02]: But even outside of one of the top accelerators in the world, Airbnb was still struggling.
• 5:46
  [SPEAKER_02]: So Paul asked them,
• 5:47
  [SPEAKER_02]: Where are most of your listings?
• 5:49
  [SPEAKER_02]: In their answer, New York's.
• 5:51
  [SPEAKER_02]: And Paul says that why aren't you living in New York?
• 5:55
  [SPEAKER_02]: You need to move to New York.
• 5:56
  [SPEAKER_02]: If that's where most of your listings are.
• 5:57
  [SPEAKER_02]: So they actually got on a plane, flew to New York, and started doing what founders really do, which is the dirty work.
• 6:04
  [SPEAKER_02]: They went door to door and met the host of all their listings in New York on air pit and breakfast.
• 6:12
  [SPEAKER_02]: And it took professional photos of every single listing.
• 6:17
  [SPEAKER_02]: because they realized the photos were the problem.
• 6:20
  [SPEAKER_02]: So they had Larry iPhone shots from the people that were listing their own property.
• 6:25
  [SPEAKER_02]: So Larry iPhone shots weren't booking but high quality photos.
• 6:29
  [SPEAKER_02]: That's what made people click and boom.
• 6:33
  [SPEAKER_02]: almost overnight booking doubled.
• 6:35
  [SPEAKER_02]: And that became a principal of Airbnb.
• 6:38
  [SPEAKER_02]: Do things that don't scale.
• 6:41
  [SPEAKER_02]: You gotta do it all hard work.
• 6:42
  [SPEAKER_02]: They weren't just coding.
• 6:43
  [SPEAKER_02]: They were grinding.
• 6:45
  [SPEAKER_02]: Now they had the momentum.
• 6:46
  [SPEAKER_02]: But the biggest problem at this point was, there's still no trust.
• 6:52
  [SPEAKER_02]: Whatting people to come into your home?
• 6:55
  [SPEAKER_02]: Ridiculous still at this time.
• 6:57
  [SPEAKER_02]: But how do you get someone to let a stranger sleep in your home?
• 7:01
  [SPEAKER_02]: to actually build a review system.
• 7:08
  [SPEAKER_02]: We're taking create, host guarantees, so they added insurance, identity checks, and customer support, and slowly, but surely, people started trusting the platform.
• 7:19
  [SPEAKER_02]: Why?
• 7:20
  [SPEAKER_02]: Because we have reviews.
• 7:21
  [SPEAKER_02]: If I stayed there, I liked it, and you read my review, you'll stay there, and at least trust,
• 7:27
  [SPEAKER_02]: Maybe not the host put the last person to stay there.
• 7:29
  [SPEAKER_02]: And by twenty eleven Airbnb hit one million bookings.
• 7:34
  [SPEAKER_02]: By twenty twelve they were operating in a hundred and ninety two countries.
• 7:38
  [SPEAKER_02]: And then.
• 7:40
  [SPEAKER_02]: City started fighting back.
• 7:41
  [SPEAKER_02]: Here's the trouble.
• 7:43
  [SPEAKER_02]: New York, San Francisco, Berlin, Barcelona.
• 7:46
  [SPEAKER_02]: They all said Airbnb was illegal.
• 7:48
  [SPEAKER_02]: They were disrupting housing markets and they were dodging taxes and creating chaos from their perspective.
• 7:55
  [SPEAKER_01]: Starting today, short-term rental hosts in New York.
• 7:57
  [SPEAKER_01]: That's Airbnb or booking.com.
• 7:59
  [SPEAKER_01]: They're going to have to register with the city and they have to comply with the new law that states, you cannot rent out your entire apartment for less than thirty days, and hosts can only offer short-term rentals.
• 8:10
  [SPEAKER_01]: If they remain with their guests in the apartment, host space finds about to five thousand dollars per violation,
• 8:16
  [SPEAKER_01]: There are about forty thousand air be a bees in New York but rip and abuse that's where host rented dozens of units is kind of shadow hotel rooms that led to a lot of neighbor and building complaints city council members also say air be a bees have raised rents in New York since they've taken all that inventory off the normal rental market.
• 8:35
  [SPEAKER_02]: At this point, Airbnb lowered up, they lobbied, they negotiated, they launched Airbnb Citizen, which is a political campaign to protect the host, and it really became a movement.
• 8:46
  [SPEAKER_02]: So then came twenty twenty, which who knows what happened in twenty twenty, America faced the pandemic.
• 8:55
  [SPEAKER_00]: China has identified the cause of the mysterious new virus.
• 8:59
  [SPEAKER_01]: Coronavirus.
• 9:00
  [SPEAKER_01]: We will be suspending all travel from Europe.
• 9:03
  [SPEAKER_01]: From Italy this evening, it just gets worse.
• 9:06
  [SPEAKER_01]: The death toll now worse than China.
• 9:08
  [SPEAKER_02]: Countries around the world have now reported more than one million coronavirus cases.
• 9:12
  [SPEAKER_02]: Business is a bunch of ups-downs, hills and valleys.
• 9:16
  [SPEAKER_02]: Travel collects in the twenty-two Airbnb lost eighty percent of its business in eight loops.
• 9:24
  [SPEAKER_02]: The company had to lay off, one thousand nine hundred employees.
• 9:30
  [SPEAKER_02]: And the IPO that they were planning was canceled.
• 9:33
  [SPEAKER_02]: They were about to do an initial public offering.
• 9:36
  [SPEAKER_02]: This was big.
• 9:37
  [SPEAKER_02]: It looked like Airbnb might not make it at all, but it pivoted quickly.
• 9:43
  [SPEAKER_02]: So what they did was they shift the focus to remote getaways long term stays and work from anywhere homes.
• 9:50
  [SPEAKER_02]: And by the end of twenty twenty, that's when Airbnb went public.
• 9:54
  [SPEAKER_02]: They had a chance to do their IPO.
• 9:56
  [SPEAKER_04]: There's a lot of interest in Airbnb.
• 9:58
  [SPEAKER_04]: We know this because it's pricing at sixty eight dollars.
• 10:02
  [SPEAKER_04]: That's above the range.
• 10:03
  [SPEAKER_04]: So clearly some oversubscription.
• 10:05
  [SPEAKER_04]: There are a lot of attention and desire to get this IPO.
• 10:08
  [SPEAKER_02]: Their IPO valuation was over a hundred billion.
• 10:13
  [SPEAKER_02]: dollars from air mattresses on a floor to one of the most disruptive travel companies in the history of the world.
• 10:38
  [SPEAKER_05]: Everyone I am so excited to share our twenty twenty five summer release.
• 10:45
  [SPEAKER_02]: And guess I would all start it because they couldn't beat her in.
• 10:49
  [SPEAKER_02]: Airbnb didn't have any money and I believe they have the same story of many of us.
• 10:54
  [SPEAKER_02]: They didn't have any money.
• 10:56
  [SPEAKER_02]: They didn't have any permission.
• 10:57
  [SPEAKER_02]: They had hustle.
• 10:59
  [SPEAKER_02]: They had grit.
• 11:01
  [SPEAKER_02]: and most importantly, a belief that strangers could become friends.
• 11:05
  [SPEAKER_02]: So the next time someone tells you that your idea sounds crazy, if they laugh at you, if they say it'll never work, if they're in your comments, hey, especially the closest ones to you, that's perfect.
• 11:19
  [SPEAKER_02]: That just means you may have a billion dollar ideal in your hands.
• 11:23
  [SPEAKER_02]: Yo man, thank you all so much for checking us out.
• 11:25
  [SPEAKER_02]: We are going to get into the origins of so many companies.
• 11:29
  [SPEAKER_02]: I will see you next episode.