Airbnb’s Joe Gebbia: "Do Things That Don’t Scale" | Summary and Q&A

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August 28, 2015
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Greylock
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Airbnb’s Joe Gebbia: "Do Things That Don’t Scale"

TL;DR

Airbnb founders face rejection and failure before finding success by adapting their business model and prioritizing customer experience.

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Key Insights

  • ❓ The founders of Airbnb had to overcome rejection and failure before finding success.
  • 🆘 Unconventional and creative marketing strategies helped Airbnb gain attention and secure initial funding.
  • 😥 Understanding and addressing customer pain points and needs was crucial for the success and growth of Airbnb.
  • 🥺 Prioritizing hospitality, belonging, and economic empowerment led to the scalability and impact of Airbnb's platform.
  • ❓ The journey of Airbnb showcases the importance of perseverance and adaptability in entrepreneurship.
  • 🥺 Building personal connections and immersing oneself in the customers' world can lead to valuable insights and innovative solutions.
  • 🤔 Taking risks and thinking outside of traditional scalability norms can yield unexpected opportunities.

Questions & Answers

Q: How did the founders initially fund their company?

Initially, the founders funded their company by maxing out credit cards, using unconventional financing methods to overcome rejection and lack of investment.

Q: How did the founders gain initial traction for Airbnb?

Initially, they launched during a popular event, South by Southwest, but only received two reservations. They later found success by selling politically themed breakfast cereal, which garnered attention and funding.

Q: What advice did Paul Graham give the founders?

Paul Graham advised the founders to "do things that don't scale" and to focus on meeting their customers directly. This led to their decision to visit their hosts in person and understand their pain points, resulting in valuable insights for improving their platform.

Q: What were the key principles that Airbnb focused on as they grew?

Hospitality, belonging, and economic empowerment became key principles for Airbnb. They aimed to provide exceptional care for their guests, make them feel like insiders in new cities, and empower hosts economically.

Summary

This video tells the story of Airbnb's humble beginnings and the challenges they faced in starting the company. It highlights the importance of perseverance, innovation, and personal touch in building a successful business.

Questions & Answers

Q: How did Airbnb initially fund their company?

The founders used their credit cards as a way to fund their company. They had multiple credit cards and maxed out each one in order to keep the business afloat.

Q: What was Airbnb's initial idea for hosting guests?

The founders came up with the idea of providing air beds on the floor of their living room to host guests who needed a place to stay. They thought of this idea when they realized there was a design conference coming to San Francisco and no available accommodations in the city.

Q: Was their initial attempt at hosting successful?

No, their initial attempt at hosting guests was a failure. Despite listing their living space on Airbnb, they only received two reservations, only one of which was from a guest other than themselves.

Q: What was the response of investors in Silicon Valley when Airbnb pitched their idea?

Many investors in Silicon Valley rejected Airbnb's idea, considering it crazy and unlikely to scale. Only a small number of investors replied to their emails and none of them ended up investing in the company.

Q: How did the founders come up with the idea of offering themed breakfasts?

In an attempt to keep their spirits up and brainstorm new ideas, the founders came up with the concept of providing a breakfast to go along with the air beds, dubbing it "Air Bed and Breakfast." As it was the time of political conventions and campaigns, they decided to make the breakfasts politically themed, with names like "Obama O's" and "Cap'n McCains Maverick."

Q: How did the breakfast cereal idea contribute to their success?

The breakfast cereal idea, although unusual, helped Airbnb gain traction and ultimately led to their acceptance into Y Combinator. The success of the cereal sales showcased their ability to think outside the box and generate income in creative ways.

Q: How did the founders convince Paul Graham to accept them into Y Combinator?

The founders were accepted into Y Combinator because of Paul Graham's belief that their success with the breakfast cereal demonstrated their resourcefulness and ability to solve problems. He saw their potential to learn and adapt, even if their initial idea seemed strange.

Q: What did the founders learn from their first office hours with Paul Graham?

During their first office hours with Paul Graham, the founders realized that they didn't have a market for their service yet. However, they discovered that the photography of listings in New York City was not of high quality. This realization led them to focus on solving this problem by taking good photographs, even if it wasn't a scalable solution.

Q: Why did Paul Graham advise them to do things that don't scale?

Paul Graham's advice to "do things that don't scale" encouraged the founders to immerse themselves in the environment of their customers and solve their immediate needs. By doing this, they gained valuable insights into their customers' pain points and were able to create a better user experience.

Q: How did participating in Y Combinator and implementing the strategy of doing things that don't scale contribute to Airbnb's success?

By going door-to-door in New York City and directly interacting with their customers, the founders gained a deeper understanding of their needs and pain points. This allowed them to create a better product and improve the quality of their platform. As a result, more hosts started using Airbnb, the number of reservations increased, and the quality of choice on the platform improved.

Takeaways

The story of Airbnb's success highlights the importance of perseverance, innovation, and personal touch in building a business. By not taking no for an answer, the founders were able to overcome rejection and transform their business idea into a global platform. Their journey also emphasizes the value of immersing oneself in the customer's environment and creating solutions that directly address their needs. Ultimately, Airbnb's success can be attributed to its commitment to hospitality, belonging, and economic empowerment.

Summary & Key Takeaways

  • The founders of Airbnb initially faced rejection and struggled to gain traction with their idea.

  • They pivoted their approach by offering airbed accommodations and launching during a popular event, but still faced initial failure.

  • Through unconventional marketing strategies, such as selling politically themed breakfast cereal, they managed to gain attention and secure funding.

  • They learned the importance of understanding their customers' needs and experiences, leading to the development of a successful platform that fosters hospitality, belonging, and economic empowerment.

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