Startup founders often doubt the success of their business at the initial stages. But “doubt kills more dreams than failure will.” (Suzy Kassem, “Rise Up and Salute the Sun”) Today, we are here to inspire you with a successful startup that used their resources well, and overcame self doubt as Startup founders.
Looking to make some extra cash on the side, roommates Brian Chesky and Joe Gebbia saw a shortage of hotel rooms and accommodations in San Francisco, around the time when the upcoming Industrial Designers’ Conference was upcoming in 2007. Seeing this as an opportunity and as a way to pay their rent in a few weeks, the pair rented their apartment to designers looking to stay in the area during the conference. This led to them building a simple website, airbedandbreakfast.com, where they offered airbeds and homemade breakfast for $80 a night.
Soon after the launch of the website, three people showed up on their doorstep- this solidified their vague idea. They invited their former roommate, Nathan Blecharczyk, where they collectively developed a business model.
However, they quickly doubted their initial idea of providing bed and breakfast services and instead played around with the idea of changing their business plan to a roommate matching service. Realizing that this already existed as roommates.com, they had to direct their attention back to Airbed and Breakfast.
The bed and breakfast service founders made various attempts to launch their venture in 2008. They did this primarily in conferences and conventions, where they were able to receive media attention, but user traction did not follow. They realized soon that they were in dire need of funding.
Airbnb knew they needed funding to become successful. Find out how your Startup can get funding like Airbnb.
The group of founders realized quickly that the “bed” part of their service was less favoured. With the elections underway, they decided to create presidential-themed breakfast cereals; some of these included Obama-O’s and The Breakfast of Change. They handcrafted these boxes and sold each limited piece for $40.
This turned things around. This brought about national media coverage, and selling these cereal boxes almost pulled the company out of debt. Towards the end of 2008, Y Combinator founder Paul Graham was not convinced that the Airbnb startup business model would not work, but was impressed by the spirit and passion that was seen through their work, and so, they were included in the Y Combinator program.
With the nearing of the recession, it was highly likely that no investors would show up on demo day. In order to combat this, each company in the program, including Airbnb, had the goal to be ramen-profitable by the end of the program. With a $20,000 seed funding and a better sense of direction, the startup founders traveled to New York to find their target demographic, their community. By the end of the Y Combinator program, Airbnb developed strong relationships with their customers, which led to more exposure within their target audience, as well as investors. The company was able to secure $600,000 funding from Sequoia Capital. Clearly, from this point, Airbnb was good to go.
As a startup founder, we want to solve a problem that exists within our community. That is exactly what Airbnb did. WIth the availability of their resources and the opportunity that was seized, the startup ensured they turned themselves into yet another successful unicorn company. Here are a few things that other startups can learn from Airbnb as a successful startup.
As a Startup founder, there is lots to learn from successful Startups like Airbnb. Don’t doubt and give up on your idea that could bring you millions- put these points to practice in your own Startup, and see it flourish and scaleup to no limit!
Amit Khanna is the founder of 7startup.vc and has 19 years of experience with Startups and the Enterprise, holds an MBA, focusing on Growth and Investments. Amit supports entrepreneurs with every aspect of their business including concept and product development, investor presentations, fundraising, and scaling up.
Tags: Startup funding, venture capital, airbnb, scaleups, pitch deck review, OKR Planning, startup funding, startup consulting, business advisory
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