AirBNB - Business Model Development and Future Challenges

Abstract

In 2007, Brian Chesky and Joe Gebbia founded Airbnb. Chesky and Gebbia had met several years earlier as students at the Rhode Island School of Design. After initially working in Los Angeles after graduation, Chesky decided to move to San Francisco, where Gebbia was living. The two shared an apartment but were struggling to pay their rent. While brainstorming ideas to earn more money, they came up with the idea to rent out the three airbeds they had available. There was an upcoming design conference in their neighbourhood, and all of the nearby hotels were sold out. They set up a quick website to advertise their offer for an overnight stay on an airbed in their apartment, along with breakfast in the morning. One would normally expect to find a few younger 20-somethings who might be interested in sleeping on someone’s couch during the conference. However, the three people who stayed with them were a 45-year-old father of five from Utah, a 35-year-old woman from Boston, and a man from India. Given the interest in their apartment airbeds from a wide variety of people, Chesky and Gebbia decided to expand their small idea and Airbnb was formed. Engineer Nathan Blecharczyk was added as the third co-founder.