Airbnb: Bootstrappers' Secret Weapon?
You need money to get your big idea off the ground but building a business is a lot of work--who's got time for another job to pay the bills?
A better option: Airbnb.
That's according to three successful start-up founders who've raised tens of thousands of dollars by renting out their bedrooms or sofas to travelers using the rental platform.
They all say the same thing: Letting strangers sleep overnight in their homes is far less work than getting a part-time job--not to mention it's a great way to befriend interesting people.
Seth Porges says his extra bedroom is what built Cloth, a fashion app for saving, categorizing, and sharing your favorite outfits. He co-founded the company with Wray Serna who has a habit of snapping photos of outfits while packing for a trip. Curious about what she was doing, he learned that when you have 1,000 items in your closet it's helpful to keep track of which combinations you like the most.
While he can't say exactly how much he's made on Airbnb, his spare bedroom in his duplex penthouse in Williamsburg, a neighborhood in the New York City borough of Brooklyn, has been booked about 27 days a month for years and he charges between $90 and $130 a night depending on how many guests use the room.
In addition to the money, Porges says he's "met some of the coolest people in the world" through the platform, which seems to particularly attract people involved in a start-up or the tech community.
"I have people spread throughout the entire world who I consider my friends now who I met because they stayed at my house. And that's just a powerful tool," he says.
He says not only does bootstrapping through Airbnb not take very much time, it demands different skills compared with running a start-up so to him it feels relaxing and therapeutic. "The key is to find things that make you money with as little mental strength and time being wasted," he says.
Tracy DiNunzio, founder and CEO of Tradesy.com--a fashion resale marketplace is another big fan of bootstrapping with Airbnb. Tradesy launched last fall. Now it has 350,000 members and is on track to have $500,000,000 in inventory on the website by the end of the year.
She made nearly $30,000 in the year she rented out the sofa and spare bedroom in her Santa Monica, California, home. Plus, her first guest never left--he proposed within a month and is now her husband.
At the time DiNunzio was working on the first iteration of her site and was broke, having sold everything she could, including her car and much of her clothing.
Like Porges, she found Airbnb to be the easiest, least time-intensive way to make money.
"It's not nearly as time consuming as a part-time job would have been and that was really my other option at the time," she says.
That's all changed and the couple no longer has to share their home with strangers. Tradesy raised $1.5 million in Series A funding in October from 500 Startups, Rincon Venture Partners, and Dany Levy, the founder of DailyCandy.
"You can't sit around and wait and think well I can't do it because I don't have this or I don't have that," DiNunzio says. "If you're resourceful you find a way."
Long before co-founding Vayable, an online marketplace for unique travel experiences, Jamie Wong was working in New York as a researcher in the field department of The Daily Show. She rented out her apartment using HomeAway and VRBO. Since she got nine weeks off a year she used the rental income to travel.
After moving to San Francisco in 2009 with loads of travel experience and the idea for a platform that lets people rent themselves out as tour guides, she had a big break--she met the founders of Airbnb at a meetup they hosted.
"It was actually Joe Gebbia... who really pushed me and encouraged me to just start and not wait," Wong says.
Coming from the media, she was living hand to mouth so her solution was to move out of her apartment, rent it out full-time on Airbnb, and rent an affordable annex in a friend's home for herself. By charging $200 a night for her apartment she was able to make around $10,000 in six months.
Even so, she says Airbnb isn't passive income in the purest sense.
"There's a lot that's involved and especially if you want to be successful at it," she says. "If I want to charge more and really keep a lucrative business on Airbnb and be able to have good reviews and keep constant inquiries coming in I knew I had to be really successful as a host and to [do that] while also trying to get a business off the ground is very challenging."
Her solution? She hires TaskRabbit workers to hand over keys, change sheets, and tidy up. While it costs her $40 per turnover she says it's important to her that guests are greeted by a person. Plus, it gives her more time to work on Vayable.
It's all paying off. Wong and her co-founder, Tim Robertson, went through Y Combinator last year, raised an undisclosed amount of seed funding in September, and say their revenue has grown 50 percent month over month since February, with 1,000 percent growth since last year.