Airbnb: From Scrounging for Rent to a $1 Billion Valuation

A business born of a need to find a way to pay the rent receives funding that values the company at more than $1 billion.

learn more about Laura Lorber

By Laura Lorber

Opinions expressed by Entrepreneur contributors are their own.

Airbnb: From Scrounging for Rent to a $1 Billion ValuationStill on the fence about launching that startup? Perhaps today's news about Airbnb may inspire you to action.

In 2007, roommates Brian Chesky and Joe Gebbia had trouble paying their rent. Today they announced that the business born of that need received funding that values their company about $1 billion.

The backstory: To raise the cash to pay their landlord, Chesky and Gebbia decided to rent out their San Francisco apartment to conference-goers seeking an alternative to hotels in their area. They pocketed $800. Then they built a business, Airbnb, helping other people do the same. Of course it wasn't a straight line to success. They struggled to break even, attended Y Combinator's startup bootcamp, eventually landed funding which helped them expand and now have more than 100,000 listings in more than 16,000 cities and 186 countries.

Here are three takeaways for would-be entrepreneurs from their experience thus far:

  1. Solve a problem. The service helps would-be B&B'ers connect with travelers seeking affordable and interesting accommodations.

    "We didn't start with some entrepreneurial thesis," Chesky told Entrepreneur.com in 2009. "It just worked beautifully for us and others we talked to, and we went from there."
  2. Generate buzz. In the summer of 2008, the company piggybacked on a big news story: The Democratic National Convention in Denver, where hotels had been sold out for months. Media outlets like the The New York Times and CNN reported on travelers finding rooms through the company.

    It was "the golden opportunity," Chesky said in 2009. "We would be nowhere today if not for that."
  3. Tap into a trend. The recession has more people looking to save a few bucks, as well as more people looking to make a few bucks on the side as "micropreneurs."

    "We started realizing there is a growing trend of people who are doing this and making a living on Airbnb," Chesky told the New York Times. "That's what turned this into a movement and tipped it into the mainstream."

Does Airbnb's concept merit the $1 billion valuation? Leave a comment and let us know what you think.

Related Topics

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game
Business News

These Are the Most and Least Affordable Places to Retire in The U.S.

The Northeast and West Coast are the least affordable, while areas in the Mountain State region tend to be ideal for retirees on a budget.

Business News

I Live on a Cruise Ship for Half of the Year. Look Inside My 336-Square-Foot Cabin with Wraparound Balcony.

I live on a cruise ship with my husband, who works on it, for six months out of the year. Life at "home" can be tight. Here's what it's really like living on a cruise ship.

Business News

The 'Airbnbust' Proves the Wild West Days of Online Vacation Rentals Are Over

Airbnb recently reported that 2022 was its first profitable year ever. But the deluge of new listings foreshadowed an inevitable correction.

Business News

'I Don't Feel Like It's Unreasonable': A-List Actor Refused Service At Hotspot For Not Following Dress Code

Academy Award-winning actor Russell Crowe had quite the afternoon after trying to stop at a Japanese steakhouse in Melbourne, Australia following a game of tennis.

Business Solutions

Master Coding for Less Than $2 a Course with This Jam-Packed Bundle

Make coding understandable with this beginner-friendly coding bundle, now just $19.99.

Business Ideas

55 Small Business Ideas To Start Right Now

To start one of these home-based businesses, you don't need a lot of funding -- just energy, passion and the drive to succeed.