🏡 How Airbnb Redefined Hospitality

Airbnb is a huge success.

Today, it’s the second most downloaded travel app, after only Booking.com.

In 2023, 448M nights and experiences were booked through Airbnb.

But things weren’t always easy. Airbnb’s path to $92B started with credit card debt to fund a failing business. But the founders had the determination to survive comparable to a cockroach. 

How did Airbnb convince people to invite strangers into their homes? And what did they do when nobody believed in them but themselves?

Here’s what we got for ya:

• 🛏️ From Air Mattresses to Global Success

• 🎨 Trust by Design

• ✨ Airbnb Experiences 

Read time: 4 min 40 sec

🛏️ From Air Mattresses to Global Success

Co-founder Joe Gebbia hit rock bottom. He was unemployed, almost broke, living in San Francisco with rent that just went up.

In desperation, he opened up his apartment to travelers for a design conference. Joe and his roommate, Brian Chesky were both designers, so they could show the guests around San Francisco and go to the conference together. 

The problem was that they didn’t have a real bed. All they had were 3 air mattresses, but that would have to be enough.

With help from their old roommate and computer programmer Nathan Blecharczyk, they created AirBedandBreakfast.com on a free WordPress template. 

The guests stayed on air mattresses, and Joe even made breakfast.

Reflecting on the experience, Joe and Brian realized they turned strangers into friends. If they had enjoyed it, why couldn’t others?

It seemed obvious: everyday people make extra money, and travelers get a more authentic, cheaper stay.

When they learned that the 2008 Democratic National Convention booked a stadium in Denver for 80k people, but the city only had 17k hotel rooms, they decided to test their website out with other people.

Within a week, they had 800 homes listed on the website. With media attention, they quickly secured 100 bookings.

They were so excited. But after the convention, interest waned.

But the founders still had faith in their idea, and rent to pay. Switching their focus from beds to breakfast, they made limited edition Obama O’s and Cap’n McCains cereal by pouring store-bought cereal into hand-folded boxes.

Within a week, they had sold $30K worth of cereal boxes. This caught the attention of CNN again.

With more confidence, they applied to Y-Combinator, a competitive program that helps startups take off with coaching and a $500K investment. 

The interviewer didn’t think AirBed and Breakfast was worth his investment, but he was so impressed by their cereal escapade, that he decided to invest in the guys themselves. 

With the help of Y-Combinator, they became one of the fastest-growing startups in history.

With advice from their Y-Combinator mentor, the founders flew to the most popular AirBed and Breakfast city, New York, to personally take pictures of the listed homes. Using quality pictures doubled the website’s revenue from $200/week to $400/week. 

They transitioned away from the era of free breakfasts and mandatory air mattresses, rebranding themselves as Airbnb. 

However, one major obstacle remained: how could they get people to trust strangers?

More on this:

• The full story behind Obama O's and Cap'n McCain's

• Read our article on the best places to start an Airbnb

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🎨 Trust by Design

In a TED TALK, Joe does an experiment. He tells everyone to unlock their phone and hand it to the person to their left. 

He explains the panic they feel is how hosts feel when they share their home for the first time.

But then he asks how everyone feels holding someone else’s phone. It’s a sense of responsibility. This is how most guests feel staying in someone else’s home.

He asks everyone to imagine they had introduced themselves first. Maybe they knew the name of their dog. And saw 100s of reviews saying they’re great at holding unlocked phones. Then people would feel more comfortable.

This is exactly what the founders did with Airbnb. They designed for trust.

Guests have to submit an introduction to the host before getting accepted. This helps the host feel more comfortable. 

Airbnb designed the box to give guests an approximation of how much they should write and gave questions to guide the information shared.

Then both guests and hosts rate each other after the stay. To avoid influence, you can’t see the other person’s review until you’ve submitted your own.

These reviews become public to help future guests decide where to stay and future hosts know who to accept into their homes.

Good reviews give hosts and guests a high reputation and build trust between people who have never met.

More on this:

• Learn more about how Airbnb designed for trust

✨ Airbnb Experiences

After seeing so much success in creating “a home away from home” for travelers, Airbnb expanded its offerings. 

In 2016, Airbnb launched Experiences, unique activities hosted by locals. 

You can book crazy things like Opening the Olympic Games at Musée d’Orsay or something more low-key like meditating with a monk or a late-night spooky walking tour.

This addition aligns perfectly with Airbnb’s mission: to connect travelers with authentic local experiences and foster interpersonal relationships.

The company is less than 20 years old and is worth more than $90B. But to achieve long-term success, the founders strive to continue diversifying.

Airbnb wants to be a part of the whole travel experience, including buying tickets and booking restaurant reservations.