Airbnb Co-Founder Shares the Email That Launched His Unicorn

Airbnb Co-Founder Shares the Email That Launched His Unicorn
airbnb

Martin Bureau / AFP via Getty

The concept behind multibillion-dollar shared-housing startup Airbnb emerged from an episode that could have ended up with a kidnapping.

In 2005, Joe Gebbia, then studying at the Rhode Island School of Design and now the service’s chief product officer, let a stranger stay the night on an air mattress in his apartment. In the middle of the night, Gebbia started having worries. What if the stranger kidnapped him and stuffed him into the tiny trunk of the man’s red Mazda Miata?

His fears turned out to be unfounded, and when Gebbia moved to San Francisco a couple years later, he brought along the air mattress and the idea that people could open their homes to strangers. The business began in 2007 when Gebbia, nearly broke and unemployed, noticed that all the San Francisco hotels were booked up ahead of a design conference. He emailed roommate Brian Chesky about renting out three spots on his air mattresses.

“Brian — thought of a way to make a few bucks — turning our place into a designers’ bed and breakfast,” Gebbia wrote.

They built a website, and three designers got to stay on air mattresses on their hardwood floor for $20 a night.

“But they loved it and so did we,” Gebbia said. So they decided to see if they could make a real business out of it.

“We waited for the rocket ship to blast off,” Gebbia said, speaking at the TED conference in Vancouver. “It did not.”

The key was developing a system of trust and reputation.

To demonstrate what trust looks and feels like, he asked the 1,200 TED attendees to pull out their cellphones, unlock them and hand the phone over to the person to their left.

“How does it feel holding someone’s unlocked phone?” Gebbia asked. “That tiny sense of panic you are feeling right now is what hosts feel the first time they open their home.”

But he also asked the crowd what it felt like to have someone else’s unlocked phone.

“Most of us feel really responsible,” he said. “That’s how most guests feel when they stay in a home. It’s because of this that our company can even exist.”

Then, he said, imagine there were reviews that told you who was really good at holding unlocked cellphones.

Joe Gebbia

Bret Hartman / TED Joe Gebbia

Speaking of reviews, Gebbia recounted his favorite, left by a man who had a heart attack while staying at an Airbnb house in Uruguay. The hosts took the man to the hospital, donated their own blood for his operation and stayed with him and helped him recover.

Here’s the review the guest left for the accommodating host: “Excellent house for sedentary travelers prone to myocardial infarctions. The area is beautiful and has direct access to the best hospitals. … They will rush you to the hospital in their own car while you are dying and stay in the waiting room while the doctors give you a bypass. … Highly recommended.”

That’s not to say there aren’t difficulties, he said, recalling the early days when all the customer problem calls were routed directly to his phone.

“It hurts to even think about them,” he said, noting that a few hosts have had their houses trashed and some guests have ended up stranded. Thankfully, he said, of the 123 million hosted nights, fewer than a fraction of a percent have been problematic.

More importantly, Gebbia said that a well-designed reputation system can actually make people comfortable opening their homes to people different from them. While people are most likely to rent to someone like them if there are only a few reviews, Gebbia said Airbnb’s research shows they are even more likely to rent to someone with a different background if they have 10 or more reviews.

“Design can overcome our most deeply rooted stranger-danger bias,” he said.

Gebbia didn’t get into other issues critics raise about Airbnb, such as concerns that the site is leading to decreased apartment availability for residents of major cities as well as lost tax revenue.

Instead he played up the benefits of shared housing, imagining a future where homes are built to be shared and those with an extra room are connected with those needing one, such as efforts being undertaken in Seoul, South Korea, where empty nesters are paired with college students in need of affordable housing.

[Re/Code]

March 30, 2016 / by / in , , , , , , , ,

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