I just finished Leigh Gallagher’s latest book The Airbnb Story – a rather short read (200+ pages) that provides a very good, well-written review of Airbnb short history (thus far). But unlike other business books, I’m not sure this one will hold well over time though, given that the company is still quite young and the story is largely influenced by recent events.
Gallagher dives into the details of ongoing conflicts between Airbnb and the hotel industry, and the early days of the company’s growth plans – all of which will look very different in a couple of years – so there will be a need for an updated version quite soon. In fact, based on the pace of growth of Airbnb to date, it’s probable that a new version will be needed at least once a year.
As I read the book, a few things popped up that made me think. Personally, these types of books always raise generic VC questions: Would I have invested? Can an Israeli team produce such a company at some point? and so on. Those questions are relevant, but not as important as the key takaway for young startups, which is what they can learn from the Airbnb story (if anything).
For me, there were 4 main takeaways from the book overall:
1. Single product vs. multi product.
The idea of a multi-product / multi-market has been a key consideration around building a billion-dollar company. We (at Viola Ventures) constantly tell our companies that they need to expand to truly become highly valuable. In fact, we believe there is no way to reach scale without expansion, and yet, Airbnb scaled to a company worth north of $20 billion with a single product.
The reality is, however, that there are very few categories where one can create a huge business based on a single offering. Most companies have a limited product offering initially and truly need to add additional products to reach real scale. Airbnb could do it because their market (travel) is so huge, so it’s kind of ironic that most VCs stayed away from investing, due to the fact they are a travel company.
2. The early days of 24/7: Total commitment.
In the first chapter, Gallagher describes the early days of Airbed & Breakfast where the 3 young founders worked 24/7 (and not much else beyond it) and how their apartment served both as their home and office. It reminded me of the stories Yair Goldfinger told me about the early days of ICQ – about how they lived together in an apartment and worked 24 hours a day, 7 days a week. Most startups can’t operate like that. It’s something that you can only do when you are 20-25, when that kind of dedication can sometimes compensate for lack of experience. Still, there is something somewhat romantic about that kind of total commitment. It’s also clear that the people who did invest in Airbnb did it because of the founders’ commitment, and not so much because of the multi-billion potential.
Airbnb’s 3 co-founders (left to right) Joe Gebbia (CPO), Nathan Blecharczyk (CSO) & Brian Chesky (CEO). Photo Credit: Airbnb.com
3. The social movement.
I am fascinated by Airbnb and have been for several years now, ever since we first used it (as a family) back in 2013. Not many companies reach the scale and value of $20 billion, and probably 100% of those that do, have a huge impact on the planet. Yet, the Airbnb Kool-Aid (its mission to “change the world”) is unique, and now that the company is successful, it’s easy to believe that dream. But how often does a young company propose an idea that is truly destined to change user behavior globally? I’d like to believe that I have the vision to recognize it in young companies, but I guess only time will tell.
4. In the end, it’s all about market fit. And timing.
So much has been written about product market fit. Even I wrote something about it. Success will always correlate to true market fit and Airbnb has it all, it’s a great example of “the best product conceived at the best time”. Of course, timing is the other super important thing, because you can also have “the best product at the wrong time”, where even a potentially great product is doomed to fail because of bad timing (and it can be “bad” for a variety of reasons). Timing is correlated with luck, and it’s quite clear in the book that the Airbnb founders were both smart and lucky.
I have been using Airbnb every year since 2013 (including this year) and there’s no denying that the experience is quite unique. It will be interesting to watch the progress of the company as its story continues to unfold, and to see what further effect it will have on the travel industry and on global attitudes to “crowd-provided” accommodation. It will also be interesting to see if a new Airbnb-caliber company emerges and takes the world by storm to the same degree. Perhaps there’s one in the making somewhere right now.
Feature Image: Airbnb co-founder & CEO Brian Chesky delivering a Keynote at Airbnb Open 2016. Photo Credit: Airbnb.com