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Before Airbnb<\/a> had over 9 million<\/a> listings worldwide, there was one sole lodging: three inflatable air beds at CEO Brian Chesky\u2019s San Francisco home. He had quit his job and packed up all his belongings in a Honda<\/a> Civic to make a cross-country move, and couldn\u2019t pay his rent. That\u2019s when he noticed all the local hotels were booked because of the Industrial Designers Society of America\u2019s International Design Conference in San Francisco, and a business was born.<\/p>\n \u201cWe called it the air-bed-and-breakfast,\u201d he told<\/a> Fortune<\/em> in 2017 at a World\u2019s Greatest Leaders<\/a> event.<\/p>\n Chesky and Airbnb cofounder Joe Gebbia were hooked on the idea of making money and meeting new friends through their makeshift accommodations, so they opened their home to three guests: \u201cWhat if you could book someone\u2019s home the way you could book a hotel anywhere in the world?\u201d Chesky said about their inspiration. They launched Airbnb with Gebbia\u2019s former roommate Nathan Blecharczyk in 2008.<\/p>\n Chesky\u2019s social-worker parents in upstate New York (he was born in Albany) told him to pursue a high-paying career, but much to their chagrin he went to art school instead, at the famous Rhode Island School of Design.<\/p>\n \u201cI\u2019m going to become an artist,\u201d Chesky recalls telling his mom, to which she responded: \u201cYou somehow managed to pick the only job in the world that pays less than a social worker. You\u2019ll get paid nothing.\u201d<\/p>\n Today, Chesky doesn\u2019t have to worry as much.<\/p>\n Airbnb has a market capitalization of $112 billion, above its level from before the pandemic, which threatened its very survival as a business. The company lost 80%<\/a> of its business in the first months of the pandemic, and Chesky reorganized<\/a> it in a scramble for survival.<\/p>\n Though Chesky\u2019s creativity is what birthed (and saved) Airbnb, it also meant business veterans did not initially take him seriously.<\/p>\n Chesky\u2019s design background was at first a hindrance to a budding Airbnb. While looking for $150,000 to fund an estimated 10% of the company, Chesky met with over 20 potential investors, all of whom turned him down.<\/p>\n \u201cJoe and I were designers, and as far as they were concerned, designers didn\u2019t start companies,\u201d Chesky said. \u201cWe didn\u2019t look like a tech founder, which is ridiculous because I don\u2019t think you should ever hire somebody because they look like something else. You want a new thing.\u201d<\/p>\n Investors didn\u2019t take an interest in Airbnb until it began designing presidential-candidate-themed cereal boxes<\/a>, which eventually got the attention of Paul Graham, founder of startup accelerator Y Combinator.<\/p>\n \u201cCreative companies are companies that tap into a sense of imagination,\u201d Chesky told Time<\/em><\/a>. \u201cThat they might come up with new breakthrough ideas, that people that were only beholden to near-term measurable outcomes won\u2019t ever have.\u201d<\/p>\n Success at Airbnb has been a double-edged sword. Explosive growth has forced the company to refocus at times.\u00a0<\/p>\n During the pandemic, Chesky told Fortune<\/em> in 2023, he even opened his own home as an Airbnb<\/a> to better understand the host experience and lived in various Airbnbs<\/a> across the country for six months, where he discovered inconsistent and unnecessary practices across hosts, including complicated rent agreements.<\/p>\n Airbnb still faces challenges as waves of short-term rental regulations<\/a> in New York and across Europe, where cities are implementing phase-outs, prohibiting rentals for less than 30 days, or no longer renewing tourist apartment licenses, for example. In the U.S., housing advocates have fought against Airbnb, according to the AP<\/a>, claiming short-term rentals have essentially become hotels.<\/p>\n \u00a0Airbnb has pushed back against regulations, saying that short-term rental bans would limit affordable accommodations for travelers.<\/p>\n Last month, Airbnb implemented a new \u201creasonable house rules and requests\u201d policy<\/a>, where the company has stopped asking guests to \u201ccomplete tasks that require significant effort or time, or would typically be performed by a cleaner,\u201d such as stripping the bed, washing and putting away dishes, or taking trash offsite. The new policy, which will go into effect on rentals booked on or after Nov. 20, has drawn pushback<\/a> as hosts threaten to boycott or hike cleaning fees, and been a pleasant surprise to customers.<\/p>\n A version of this story was published on Fortune.com on Jan. 24, 2024.<\/em><\/p>\n More on Airbnb:<\/strong><\/p>\n\nHow was Chesky\u2019s business ethos shaped by his creative background<\/strong>?<\/h2>\n
How has Airbnb navigated challenges?<\/strong><\/h2>\n
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