If it were up to Brian Chesky’s parents, he would never have been an entrepreneur. “When I was growing up, and I realised I was interested in art, my parents got nervous,” the co-founder of Airbnb told audiences in Singapore. “They made me promise I’d get a job with health insurance!” Chesky’s earliest inspiration came from a teacher at art school; “Everything around you has been designed by someone. You can redesign the world you live in.” This idea that he could change the world stayed with Chesky, even when he moved to Los Angeles and secured a job (with insurance) as an industrial designer. “I felt I could do so much more,” he says of the role. “I was in a car, driving towards the horizon, and the road behind me looked exactly the road ahead. I had to get out.”
And so he moved in with his friend Joe Gebbia, the future co-founder of Airbnb. While Chesky didn’t know it at the time, the move was to be a fruitful one. “There are key moments in life, where you can go down one road or another, and the course of your life is forever altered. In October 2007, I had one of those moments. I was totally broke, sleeping on an old foam mattress, and it turned out that the same weekend, this international design conference was coming to San Francisco, and all the hotels in the city were sold out. We had an idea; we thought ‘what if we turn this house into a bed and breakfast for this conference?’”
Chesky and Gebbia pulled three air beds out of the closet and inflated them; “We realised what we had created wasn’t a bed and breakfast, it was an air bed and breakfast. And that’s where Airbnb came from.” Neither of them realised then that Airbnb was the idea that would make their careers. “We were convinced that this was just how we were going to make rent, while we thought of the big idea.” Eventually it dawned on them that the concept of a website where you can book someone’s home, the way you’d book a hotel, anywhere around the world, was worth exploring.
Silicon Valley is rife with tales of overnight success. This is not one of them, recalls Chesky. “In Silicon Valley, you’re rewarded with instant feedback. If something doesn’t take off straight away, people assume it’s not going to work. I told a mentor of mine about my idea, and he said ‘I hope that’s not the only thing you’re working on’. At the same time, I told my late grandfather about it, and he said ‘well that’s how I used to travel when I was a kid.’ I knew there was something there.”
Then, in 2008, the financial crisis occurred, and Airbnb’s founders were forced to fund the company themselves. “Investors didn’t even want to take a chance on good companies, let alone this crazy business created by two designers.”
Enter Barack Obama. “He was running for president, and everyone was crazy about him; he tapped into the collective unconscious. We had this idea to provide housing for the Democratic National Convention; we got all this business, all this press… then the next weekend it flattened again.” But that year’s presidential election continued to play a role in the story of Airbnb, as Chesky and Gebbia decided to promote their business by inventing first an Obama-themed cereal; Obama O’s, then a Republican version called Cap’n McCains.
They mailed 100 boxes out to the press, and within 24 hours Obama O’s had been picked up by The Today Show, Good Morning America and CNN. Chesky and Gebbia sold $30,000 in breakfast cereal at $40 per box. “That got us back to zero,” says Chesky, who believes that every entrepreneur has their own rock bottom story. His involves living on the less popular Cap’n McCains for a couple of months.
The turning point came in January 2009, when Chesky and Gebbia gained the support of Y Combinator founder Paul Graham, who didn’t love the idea of a shared accommodation service, but is reported to have said; “If you can convince people to spend $40 on cereal, maybe you can convince them to sleep in someone else’s home.”
Chesky credits Graham with the best advice he has ever received on building a business: “It’s better to have a hundred people love you, than to find a million people who just sort of like you. Build your business one person at a time. If they love you, they will market your product for you.”
This has become the backbone of Airbnb’s culture. “Every entrepreneur is worried about appeasing investors – customers only care about how great the experience is. When you’re small, you have the time to craft the perfect experience for every user. All great movements have started from just a few people… It took Google two years to find a hundred people that loved Gmail.”
And now that Airbnb has grown? “One of our core values is to champion the cause,” says Chesky. “For the first time in history, people will soon be able to live with other people in every country in the world. That’s never been done before.”
Chesky also believes that Airbnb’s “shared economy” model will become increasingly popular with other businesses going forward. “The future of employment may not come from factories, or large organisations, it may well be an ordinary person with a phone, who wants to provide a service to another person. We’re living in a world of entrepreneurs and micro-entrepreneurs.”
It turns out, 2008 was the perfect time to start a business based on a sharing economy. Before, people never would have bought into it, as they were too comfortable with the way things were. Now, people are willing to try new things. This new openness is the key to an economic revolution, says Chesky, with a focus on collaboration and shared services:
“The genie’s out of the bottle now. I don’t think things will ever go back to the way they were.”