How Airbnb Founders Took Paul Graham's Advice to Heart
Today, Airbnb touts that it has hosted over 8.5 million guests, with rentals in over 34,000 cities and 192 countries--but, the company was not an overnight success. The company’s founders Brian Chesky, Nathan Blecharczyk and Joe Gebbia sat down with Charlie Rose on Monday and discussed Airbnb’s evolution.
About a year after the company’s founding--in the middle of the recession, the three founders were broke, running the company on credit cards and couldn’t attract new investors. In January 2009, the Airbnb founders sat down with their first investor--Paul Graham of Y-Combinator--and got some advice that Chesky said changed their business forever.
“The first thing [Graham] told us was ‘Its better to have 100 people that love you than a million people that just sort of like you. Find 100 people that love you,’” said Chesky in the interview with Rose. “I think that’s the challenge that most people have when they try to start businesses…but almost all great movements in history, all great products start with a core base of people. And the good news is that you can do things that don’t scale. So you can start with a few people and do things that large companies cant do.”
After this sit down with Graham, the three founders reached out to their customer base, got 100 people to fall in love with the start-up and the rest, as they say, is history.
Other highlights from the talk included insights into their product strategy.
“When you build a product you build the minimum product that you need and then you get feedback,” said Chesky.
After some homes that we rented out through Airbnb we re trashed in 2011, the company responded and came out with the Airbnb guarantee, which is essentially a $1 million insurance plan for all the rentals on the site--hosts do not pay for the insurance.
Today, Chesky, Blecharczyk and Gebbia say that the primary source of Airbnb's growth is through word of mouth recommendations.
“So here is what happens. People come back from their vacations and inevitably in that conversation Airbnb comes up. Then because of all these positive experiences--all of which you can basically read on the website in the form of these reviews--the word of mouth happens,” said Blecharczyk.