Book review: How Airbnb became a brand
The story of how this “Air Bed and Breakfast” start-up became the billion-dollar Airbnb is an oft-told Silicon Valley fairy tale
This is the story of two penniless design school graduates who became billionaires. Brian Chesky and Joe Gebbia were buddies from Rhode Island School of Design in the US, consumed with the idea of launching a big venture. To make money for rent in San Francisco, the duo began renting out their living-room airbed. Soon after, they pulled in technology expert Nathan Blecharczyk, who built the website that would help people rent out living-room airbeds to travellers who couldn’t find affordable hotel rooms. The story of how this “Air Bed and Breakfast” start-up became the billion-dollar Airbnb is an oft-told Silicon Valley fairy tale. And like all fairy tales, it bears retelling, something Leigh Gallagher, assistant editor at Fortune magazine, does engagingly in this well-researched book.
Would-be entrepreneurs can take heart from all the struggle (eating dry leftover cereal for every meal) and the scorn from investors (the idea of renting out space to strangers was considered weird and unbelievably risky) chronicled in this book. Airbnb went through many iterations, from being a company that insisted hosts supply only airbeds and be there to offer breakfast, to its present-day avatar. It failed many times, launching and relaunching in different cities, trying to capitalize on the extra demand for hotel rooms during conventions. Then there were the lucky breaks, most of which came from dogged persistence, like becoming part of the Y Combinator accelerator, a mentoring programme for start-ups. This gave the young start-up credibility, funding from private equity firm Sequoia, and mentorship.
Gallagher tells this story fluently. The first few chapters are eventful and racy, and then the book settles down to a comfortable mix of events and analysis.
Chief executive Chesky is the public face of Airbnb, so it’s understandable that much of the book focuses on him. The other two founders, Gebbia and Blecharczyk, get a chapter each, but team Airbnb never comes to life. If the book has a flaw, it’s this.
Gossipy titbits, like Chesky’s relationship with Indian-American girlfriend Elissa Patel, are conspicuously missing. Gallagher focuses only on the business of Airbnb. “Airbnb tapped into something greater than low prices and an abundance of available inventory. It offered an experience that was special and different. Even its imperfections fed into a growing desire for a travel experience that felt a little smaller-scale and more ‘artisanal’ than staying at a standard hotel,” she writes. “It also opened up access to different kinds of neighbourhoods than traditional tourist zones, so you could have an experience that felt more local. These elements were particularly powerful for millennials, who have exhibited a growing dissatisfaction with big brands and a greater sense of adventure, and those who grew up so accustomed to digital-only interactions that venturing into the home of someone they’d connected with online wasn’t much of a stretch,” she tells us.
The explosive popularity of Airbnb has inevitably brought it into conflict with its biggest competitor—the hotel industry. Hoteliers complain that Airbnb has an unfair competitive advantage—it is not subject to the regulations and taxes that the holiday industry is. Hotel industry lobbyists have enlisted the help of the law effectively in cities like San Francisco and New York.
The story of this upstart digital industry battling with its traditional model is fascinating for anyone following the disruptive nature of today’s world. And Gallagher tells it well. Even though she is obviously partial to the magic of the Airbnb proposition (as is this writer!). She also tackles the crises in Airbnb, including the much reported ransacking of hosts’ houses and the media outrage over them.
Great reading for anyone who has ever stayed in an Airbnb or is considering staying in one, for all entrepreneurs everywhere, and for anybody interested in seeing up close what “disruption” is really all about.