Leigh Gallagher is Assistant Managing Editor at Fortune magazine, where she writes and edits feature stories, hosts Fortune Live, and is a co-chair of the Fortune Most Powerful Women Summit. She is a seasoned business news commentator, appearing regularly on US news programmes and is a member of the Council on Foreign Relations.
Inside the tech company disrupting the world
In less than a decade, Airbnb has become the largest provider of accommodation in the world. Now valued at $30 billion, it is one of the hottest ‘unicorn’ startups in Silicon Valley.
In this first definitive book on Airbnb, Fortune journalist Leigh Gallagher tells its remarkable story in all its forms – cultural zeitgeist, tech disruptor, enemy to regulators – and provides the first in-depth character study of its leader Brian Chesky, the company’s curious co-founder and CEO.
This is the story of a small idea that became the next big thing, explaining why Airbnb is more transformative than Uber, and revealing the bold and ambitious plans for where they go next on their incredible journey.
For Gil, Zeb, Anna, Noa, and Ava, the ultimate home sharers
BRIAN CHESKY AND I were sitting across from each other in the velvet, high-backed, regal-feeling chairs of the lobby bar of the Fairmont San Francisco hotel.
It was early November 2015, and we were there so that I could talk to him about the idea of writing a book about his company, the “home-sharing” platform Airbnb, to use the phrase the company has been so successful at popularizing. There was some irony in the fact that we were at a hotel, and not just any hotel: this was the exact venue that hosted the international design conference in 2007 that had maxed out San Francisco’s hotel supply and had given Chesky and his cofounder Joe Gebbia their goofy idea to rent out air mattresses on the floor of their three-bedroom apartment in the South of Market district.
Indeed, it was fewer than thirty feet from where we were sitting where Chesky had walked up to one of the designers he’d most revered to tell him about this new business idea, only to have him immediately dismiss it as ridiculous (“I hope that’s not the only idea you’re working on” were his words). That comment would mark the start of a long stretch of painful rejection and ridicule. But it also marked the start of Airbnb, the company that Chesky now commands, a juggernaut today with a $30 billion private-market valuation, some one hundred forty million “guest arrivals,” to use the company’s term for tracking the travelers who book on its platform, and an inventory that is three million listings strong. (A note on metrics: the phrase “guest arrivals” refers to the number of people who have arrived at an Airbnb listing for a new trip, a term the company uses to be consistent with international tourism standards; this book will hence-forth refer to this number as either “guest arrivals” or “guests.”) At this point, Chesky frequents hotels only really for speaking engagements, and he had come to this one to address the Fortune Global Forum, my place of employ’s annual gathering of CEOs from around the world. Chesky’s speaking slot was in between former U.S. secretary of defense Leon Panetta and Jamie Dimon, CEO of JPMorgan Chase.
Chesky and I had regrouped afterward in the lounge to talk about the project I was proposing. I thought Chesky would be open to my idea, and he was — but not without some reservations. “The problem with a book,” he says, clearly having given it some thought, “is that it’s a fixed imprint of a company at a particular moment in time.” I wasn’t sure where he was going, so I asked him to elaborate. “I’m thirty-four,” he continued. “Our company is young. We’re going to go on to do many more things from here.” His point was that it was still early in the game. Whatever I would publish in 2017 about Airbnb, he said, would very quickly be outdated, yet that’s what readers would remember. The media, he pointed out, were already behind: “Where everyone thinks Airbnb is today,” he said, “is where we were two years ago.”
The thought reflected Chesky’s ambition as much as it reflected his pragmatism. But he said he was open to cooperating for the book, and he trusted me to get it right. The meeting was ten minutes long. It was a good day: the night before, after a protracted fight, Airbnb had successfully beat back a ballot initiative in San Francisco to dramatically curb its operations. Chesky was soon leaving for Paris for the Airbnb Open, the company’s annual celebration of its “hosts” — those people who deliver the product upon which the Airbnb platform is based. As we left the lounge, he talked excitedly about what the company had planned: on one single evening, hundreds of Parisian hosts were scheduled to open their homes to the entire group for a series of coordinated dinners all across the City of Lights. “It’s going to be one of the world’s largest simultaneous dinner parties,” he said excitedly.
And with that, the thirty-four-year-old billionaire left the room.
The first time I heard about Airbnb was in 2008. At the time, I was in charge of the section of Fortune magazine that covered the quirkier side of business, and we’d gotten word about a couple of scrappy entrepreneurs who were gaining some attention during the 2008 presidential election season for hawking collectors’-edition boxes of fictitious breakfast cereals called Obama O’s and Cap’n McCain’s. They were recent Rhode Island School of Design grads trying to build word of mouth for their newly formed start-up, AirBed & Breakfast, which let people rent out sleeping quarters in their homes to other people who needed a place to stay. I thought the business idea itself was nothing new, but the cereal gimmick was plucky and had gotten some national attention, so we ginned up a short piece on it to run in Fortune. I didn’t give it more than a passing thought.
Over the next year or two, though, the company started to gain buzz, edging onto the radar of our tech-reporting team. Someone brought it up internally as a company to watch. Wait a minute, I thought. Those guys? I was not involved with Fortune’s tech coverage, which meant that I didn’t always know what I was talking about when it came to the companies coming out of Silicon Valley. But I also felt that distance gave me a healthy arms’-length perspective on the self-important euphoria that seemed to waft out of the region. As the keeper of Fortune’s “40 under 40” list, I was also used to breathless pitches from companies claiming they would change the world in one year’s time, only to be significantly humbled the next. I sometimes took a certain amount of pleasure in pointing out when I thought certain ideas were overblown and overhyped. This new company, I thought, was one of them.
I made a mental list of all the other companies that already existed that offered the ability to rent someone’s home or space in it: HomeAway.com, VRBO.com, Couchsurfing.com, BedandBreakfast.com. I wondered how this new company could be so different. What is it about these tech start-ups, I remember grousing to a colleague, that think they can take an old, unoriginal idea; gloss it up with a slick, minimalist, design-friendly website; and re-release it back onto the marketplace as something new?
But this company was going to be different from all those others, and in a short time that would become clear. Soon, Airbnb had become a “thing.” You could rent someone’s home for a night, but people had also started to upload quirkier spaces: a treehouse, a houseboat, a castle, a tepee. Millennials in particular were drawn to this new way to travel that was both affordable and adventurous; you could stay in people’s homes in neighborhoods off the conventional tourism grid, connecting with like-minded souls, for much less than the cost of a hotel. Listings and bookings started to catch fire. As early as 2011, Airbnb raised a mega $112 million from backers, was valued by investors at more than a billion dollars, and had booked one million overnight stays on its platform. Over the next few years, it would leave those figures in the dust: one million bookings turned into five, ten, fifty, and then one hundred forty million “guest arrivals” by the end of 2016 — some seventy million of which had occurred in just the past twelve months. Its valuation jumped to $10 billion, to $25 billion, and to $30 billion, where it sits as of this writing. Yet the company still has low awareness and low penetration in the housing market. Analysts predict it will get many times larger than it is today.
It’s hard to look at any phenomenon with that kind of growth without trying to understand just why it took off. Part of it was economic: coming as it did right out of the Great Recession, it offered a way for everyday people to make money off of their homes and a much more affordable way to travel. Its first adopters were millennials, the swelling demographic that were coming into their own as apartment-dwellers, but, curiously, the average age of a host in the United States is forty-three. As incomes started to slow in recent years and housing prices in cities began to climb, anyone could monetize their home via Airbnb, even if they didn’t own it. The average U.S. host made around $6,000 a year in 2015, but many make a lot more than that (like “home sharing,” the terms “host” and “guest” favor Airbnb but have been widely adopted as standard, so I use them here without irony). Travelers loved it, too, for both the prices and the unique experiences it afforded them. Studies have shown that while many people still haven’t used Airbnb, when they do try it, they often become regular users.
But Airbnb tapped into something greater than low prices and an abundance of available inventory. It offered an experience that was special and different. Even its imperfections fed into a growing desire for a travel experience that felt a little smaller-scale and more “artisanal” than staying at a standard hotel. It also opened up access to different kinds of neighborhoods than traditional tourist zones, so you could have an experience that felt more local, an advantage Airbnb heavily pushes. These elements were particularly powerful for millennials, who have exhibited a growing dissatisfaction with big brands and a greater sense of adventure, and who grew up so accustomed to digital-only interactions that venturing into the home of someone they’d connected with online wasn’t much of a stretch. Many of the rest of us found these characteristics appealing, too.
But this newfound opportunity to stay in other people’s homes also fed a greater need — one for an experience that offered more of a human connection. Staying in an Airbnb or hosting someone in your home is a highly intimate exchange; even if the person who lives there isn’t there, he or she has prepared an experience for you and gone out of the way for you. Stepping hesitantly into someone’s private space, in a corner of a city you wouldn’t typically have access to, really can deliver a feeling, however slight, of having connected with another person. If the resident is there, those conditions can often be stronger. (One of the company’s early slogans, which it still uses today, was “travel like a human.”)
Of course, things can go wrong, and they have. But every time they don’t — which is most of the time — yields a little vote of confidence in our fellow humanity. And this has come at a time when our society has become more disconnected than ever, with record numbers of people living alone, spending more time isolated in our cars, spread out in suburban homes, lost in our work, or simply wandering around with our heads down and earbuds sealed in.
Airbnb has a saying for this: it calls it “belonging anywhere,” the company’s mission, which it champions relentlessly. It says its platform enables a “transformative” experience called the “belong anywhere transformation journey.” The company’s over-the-top idealism is easy to dismiss, but the experience that it offers does address something that has been lost as we have grown more distant from one another. Staying in a unique, authentic space that’s been prepared for you by a real person — even if it’s a property-management company, which Airbnb has more of these days, especially in traditional vacation destinations — touches upon something we may not have been aware was missing.
Of course, not everyone feels this way, and Airbnb’s growth hasn’t come without its complications. In many cities and municipalities around the world, the fundamental activity enabled by Airbnb — individuals’ renting out some or all of their homes to other individuals for a short period of time — is illegal. The laws vary from city to city and from country to country, but as Airbnb grew, so did the opposition from critics who started using those laws to try to curtail this massive disrupter at their door. The fight has brought together an odd coalition of liberal politicians, the real estate lobby, labor unions, and the hotel industry, where any mention of Airbnb has now become a third rail. Condo associations and residents in many cities, meanwhile, have protested the parade of transient visitors Airbnb has suddenly created in their buildings and the changes they have brought to their neighborhoods. Among other things, these opponents say that Airbnb is teeming with professional real estate operators who have hoarded housing units to turn them into full-time use on Airbnb. They claim this has kept housing off the market and worsened an affordable-housing crisis in many markets. In a handful of cities, including New York and San Francisco, they are legislating to curb the company’s growth. And the bigger Airbnb gets, the louder and tougher the fight.
Over the years, Airbnb has also dealt with all the unintended consequences of putting strangers together, including ransackings, attacks, and lapses in responsibility on the part of its hosts that have led to tragic accidents of the worst possible kind. In recent years the company has had to confront another evil on its site: the presence of racial and other types of discrimination on its platform.
Perhaps this shouldn’t have surprised anyone. When you create an open marketplace that lets the public engage with one another, if it’s reflected in society, it will be reflected on the platform. The company may have built its brand on the kindness of strangers, but despite what Airbnb would like to believe, not all of humankind is kind.
These kinds of headlines have fed a sort of hysteria in the minds of those whose only experience with the company is what they see in the news. “You’d better write about it before it goes under,” warned one person I told about this project. At the peak of the discrimination controversy, I received a stern voice mail from my father: “I hope the reason you’re not answering is because you’re listening to the report on NPR right now about how Airbnb discriminates against blacks.” (Airbnb wasn’t doing the discriminating — people on its platform were — but Airbnb demonstrated an inability to see these major issues coming that many felt was worthy of the criticism.)
But at the same time, Airbnb’s usage has exploded well beyond the millennial demographic. These days, Airbnb is used by baby boomers, seniors, and so many other people — including celebrities like Gwyneth Paltrow and Beyoncé — that some of its earliest users, those who considered themselves pioneers at the cutting edge of a social experiment, now feel it has gone too “mainstream.”
And, like it or not, Airbnb has captured our imaginations. It has become part of the zeitgeist. It has been a punchline on Saturday Night Live. It has been written into the plotline of HBO’s Silicon Valley. It’s been the answer to a question on Jeopardy! A romantic comedy with mistaken Airbnb host-identity high jinks as its plot device can’t be far away. It’s been used by marketers to create clever brand extensions: for a few weeks before the latest Teenage Mutant Ninja Turtles movie came out, in 2016, a listing showed up on Airbnb for the Turtles’ actual “lair,” an apartment in Tribeca the movie’s producers, Nickelodeon and Paramount Pictures, had converted into a themed hideout. And it can be a showcase for individual creativity: during an epic snowstorm that covered the Northeast in early 2016, a plucky Brooklyn hipster built and listed a “Boutique Winter Igloo for 2” on the site. (“Dripping with ingenuity and alt-lifestyle aura lays this Snowpocalypse’s most desirable getaway,” he wrote. Airbnb removed the listing because it wasn’t up to code, but gave him a fifty-dollar coupon for his creativity.)
The basic idea behind what Airbnb is doing is not new at all. Chesky likes to point out that the only person who didn’t tell him Airbnb was a horrible idea in the beginning was his grandfather, who, when he heard what his grandson was up to, just nodded and said, “Oh, of course. That’s how we used to travel.”
And it’s true: whether as tenants, boarders, au pairs, or otherwise, many people will tell you they stayed in some kind of “home-sharing” situation long before there was an Airbnb or even an Internet. Many well-known people in history were their time’s equivalent of Airbnb users. From early October through November 22, 1963, Lee Harvey Oswald paid eight dollars a week for a spare room at a residence in the Oak Cliff section of Dallas (the house is now a museum and is available for tours). Isadore “Issy” Sharp, founder and chairman of the Four Seasons Hotel chain, has said he got his first taste of hospitality when his parents took in tenants while he was growing up in the Jewish ghetto of Toronto. Warren Buffett, too, says that for many years his family often had travelers coming through their house as guests — including George McGovern when he was campaigning for president. There is actually a Wikipedia page for “homeshare,” but Airbnb isn’t even cited as a reference.
My significant other, raised by a single mother in New York City, grew up accustomed to having a series of boarders in the family’s second bedroom. Decades later, he’d make a practice of it himself, filling his three-story house in Brooklyn with two or more semester-long student tenants at a time. I soon came to know Lucien, the IT expert from the Netherlands who occupied the downstairs bedroom, and Ariane, the French film student in the upstairs spare, as well as their shared food in the fridge and weird European toiletries in the bathrooms. All that extra space could be put to work, my partner would say — and he genuinely liked having global student types around for interesting conversation and a broader perspective.
And then of course, there is the more modern era of short-term vacation rentals, which has been with us for decades, whether through big players like HomeAway or VRBO or niche sites like BedandBreakfast.com, or, before that, advertisements on Craigslist or classified ads. “One of the signature elements of the sharing economy is that the ideas themselves are not new,” says Arun Sundararajan, professor at New York University and author of the book The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism.
What is new, though, and what Airbnb specifically has done, is to toss aside the barriers and build an easy, friendly, accessible platform inviting anyone to do it. Unlike on previous websites, Airbnb listings were designed to showcase home renters’ personalities; the company invested in individual professional photography services to make sure the spaces would look lush and inviting; and searching, messaging, and payment were all self-contained, seamless, and friction-free. (Many people suggest that Airbnb is not a technology company, since it traffics in homes and spaces, but it has one of the most sophisticated back-end engineering infrastructures in Silicon Valley.) The company built a series of tools to reinforce trust, like bilateral reviews that could be completed only by paying customers who’d completed a stay, and a verified ID system. And one of the biggest but least discussed reasons it was so different is that Airbnb was urban. Before it, most home-rental companies focused on second homes or listings in traditional vacation or resort destinations. For all the attention paid to treehouses and houseboats on its site, most Airbnb listings are studios and one- and two-bedroom apartments, which is what makes it so appealing to so many travelers — and so threatening to hotel companies. Airbnb invited everyday people — even if your only claim to real estate was a rented studio apartment — to profit from their space, and that had a transformative impact on both those renting and those traveling. It was urban, it was easy, and it was “millennial”; and in online marketplace businesses, scale begets scale, so once it reached a certain size, its dominance was hard to unseat.
If Airbnb has disrupted hotels, travel, space, and trust, it’s also disrupted conventional management theory. One of the unique aspects of the company’s rise is the sheer lack of corporate experience that its founders had when they started out — and the sped-up time frame in which Chesky, Gebbia, and Nathan Blecharczyk (whom Chesky and Gebbia pulled in after that first weekend as their third and technical cofounder) had to learn to become leaders. Very quickly this became a grown-up company with grown-up valuations and expectations — and grown-up problems. Yet, unlike previous companies that grew to this size only to have the founding team split up or “professional” management come in, Airbnb’s three leaders are still together, very much at the helm of the rocket ship they built.
The evolution has been the most striking for Chesky, now thirty-five, the company’s CEO. A complete outsider — he lacked not only any knowledge about business but even the tech skills to build anything beyond a basic website — he had to quickly evolve from not knowing what angel investors and slide decks were to steering a $30 billion company with more than 2,500 employees.
But while Chesky gets the lion’s share of the credit, Airbnb would never have existed without the combination of all three founders. Gebbia, also thirty-five, is a design disrupter with bold ideas who displayed a knack for entrepreneurialism dating back to his early childhood. Blecharczyk, thirty-three, is a preternaturally gifted engineer who made a million dollars building and selling software online while still in high school and who single-handedly built the backbone and infrastructure responsible for much of Airbnb’s success. The three of them are different in almost every imaginable way, and as Chesky has scaled as the company’s leader, Gebbia and Blecharczyk have in recent years forged their own paths and settled into leadership roles suited to their own strengths.
As this book went to press, the company was readying a major announcement that Chesky promised would be the most significant move in Airbnb’s young life and would mark the beginning of a dramatic repositioning: an ambitious push beyond accommodations and into “the rest of the trip” with a series of new products, tools, and experiences. Instead of just booking a stay in a home, Airbnb now aims to be a platform for unique, hyperlocal activities like training with ultramarathoners in Kenya, or trimming bonsai trees with like-minded enthusiasts in the city where you live. It wants to provide restaurant reservations, ground transportation, and soon, something involving flights. It is a bold move and a huge new line of business for such a young company — especially one whose core business is still almost doubling every year.
Indeed, Airbnb is growing and changing so fast that after this book is sent to the printer and is published, and then after that, more big change will come. Only toward the end of the process of reporting this book did I begin to understand what Chesky meant when I sat down with him that day at the Fairmont. When I later learned more about the push into these new businesses, I joked to Chesky that Airbnb’s plain-vanilla business of offering accommodations started to seem “old.” He looked at me very seriously, gestured toward the slide deck he had just showed me, and said, “I hope that soon this will be the ‘old’ Airbnb.”
For these three founders, creating and growing Airbnb hasn’t been easy, and it hasn’t come without huge bumps in the road. And there will be plenty more of those: the legal battles are far from over, and there will be more bad stories and more examples of horrible human behavior. The founders face some big tests in the future as they expand into a new business — and as they ready the company for an eventual IPO. So far, the company has been able to walk that very delicate balance in scaling growth while preserving its “mission,” largely because it has had its choice of investors and has chosen only those who share its longer-term horizon. But as it heads toward a debut in the public markets, the company will be forced to reconcile how it can still maintain its original sense of purpose while managing pressure from large institutional investors whom it will not be able to hand-select.
Whatever happens, Airbnb has already had a huge and lasting impact. It has set records in how quickly it scaled, and has disrupted the notion of what it takes to lead a $30 billion company. It has redefined how we look at the space around us and how we view strangers. It has changed how we travel, opening up a new market for “alternative accommodations” that is drawing interest from dozens of upstarts as well as the biggest hotel companies. And now, Airbnb is aiming to change how we experience new places and how we live our lives at home. It has done all this against all odds, after so many people said no, and as well-funded traditional forces of industry have thrown all their might against it. And all because three guys with little experience had a strange, cheeky idea. The tale of how Chesky, Gebbia, and Blecharczyk came this far is one for the ages. It also should serve as an inspirational account to anyone with a bold idea who’s told it will never work.
This is their story.
There’s something I need to tell you.
We’re going to start a company one day, and
they’re going to write a book about it.
— JOE GEBBIA
THE BASIC STORY of how Airbnb came to be is already lore in Silicon Valley and beyond: in October 2007, two unemployed art school grads living in a three-bedroom apartment in San Francisco, needing to make rent, decided on a lark to rent out some air mattresses during a big design conference that came to town and overcrowded the city’s hotels. In certain circles this tale has already attained the same mythic stature as some of the legendary founding stories that came before it: when Bill Bowerman poured liquid urethane into his wife’s waffle iron, birthing the Nike waffle-sole sneaker; or when Bill Hewlett and Dave Packard built an audio oscillator in Packard’s now-famous garage.
In truth, the Airbnb story begins a few years before then, three thousand miles away in Providence, Rhode Island, in a studio on the campus of the Rhode Island School of Design in the summer of 2004. Brian Chesky and Joe Gebbia, two students — Gebbia was in the fourth year of a five-year dual degree in industrial and graphic design, and Chesky had just graduated — were part of a RISD-sponsored research project with the Conair Corporation, the company best known for its hair dryers and other personal-care products. Companies would often partner with RISD for access to its industrial-design students. Under this particular program, Conair had hired the school, which assigned a group of students to essentially work solely on designing products for the company over the course of six weeks. Most of the work would take place on the RISD campus, but the company would own the rights to the products, and the students would get real work experience and a stipend. At the end of the session, they would present their ideas to Conair executives.
The students worked in teams of two, and Chesky and Gebbia decided to team up. They already knew each other well, having first met through a shared interest in sports. Chesky ran the RISD ice hockey team, and Gebbia had started the basketball team. To say sports was an afterthought among the RISD student body was an understatement, but, determined to bolster their teams’ images, the two co-conspired on an ambitious marketing plan: they raised funding, created a schedule, designed new uniforms, and cooked up other creative flourishes — including the liberal use of cheeky bathroom humor1 — to give the teams a sense of irreverence. They succeeded; the RISD games became popular events among the student body and even drew neighboring Brown University students and the city’s colorful then-mayor, Buddy Cianci, who agreed to be an “honorary coach” of the hockey team. “I think it was one of the hardest marketing challenges you could ever face,” Gebbia later told Fast Company. “How do you get art school students to a sporting event on a Friday night?”2
But for all their antics, the Conair internship marked the first time Chesky and Gebbia had worked together on a design project. The team of students would travel to Conair’s offices in Stamford, Connecticut, once a week by bus for briefings with the company’s marketing team, then retreat to the RISD shops to work on their designs. Gebbia and Chesky worked hard on their ideas, often staying up all night in the studio. They let their creativity run wild, but it wasn’t until it came time to present their ideas that they realized just how wild. While the rest of the teams came back with different designs for hair dryers, Chesky and Gebbia came back with a different vision for the company, pitching out-of-the-box products like a shirt made of soap that washed off. “The look on their faces said everything,” says Gebbia of the Conair executives. The marketing manager running the project told Chesky he had drunk too much coffee. “But I didn’t have any coffee,” Chesky says. For both of them, it was an epiphany, not about hair dryers, but about what they could come up with when they put their heads together. “We kept building on each other’s ideas,” says Chesky. “Joe and I, when we get together, ideas typically get bigger, not smaller.” Gebbia felt the same way: “I got a taste of, ‘OK, when [Brian and I] get in the same room together and we work on an idea, we can do things differently than everybody else.’”
Gebbia already had a sense of this. The previous month had brought Chesky’s graduation ceremony. It had been a memorable event: Chesky had been chosen by the student body to be the commencement speaker, and he delivered a performance, approaching the stage to the tune of Michael Jackson’s “Billie Jean,” tearing off his robe to reveal a white jacket, and grooving, Jackson-style, in front of the crowd before taking the podium. A few days after that, Gebbia had invited his good friend and kindred spirit out for a slice of pizza. Their time together on campus was soon coming to an end, and Gebbia had a premonition he had to get off his chest. “There’s something I need to tell you,” he said. “We’re going to start a company one day, and they’re going to write a book about it.”
Chesky appreciated the sentiment. (“He looked at me and he kind of laughed it off,” Gebbia says.) But despite what they later would call their “Casablanca moment,” Chesky knew he needed to move on with his life and find a respectable job. After all, wasn’t that the whole point? Growing up in upstate New York, Chesky was the son of two social workers who’d worked hard to be able to give their children the freedom to pursue whatever passions and hobbies they chose. His mother, Deb, now a fund-raiser for Rensselaer Polytechnic Institute, and his father, Bob Chesky, who retired in 2015 after working for the state of New York for forty years, were supportive of their son’s interest in art; his high school art teacher had told them she thought he was going to be famous as an artist one day. And his parents were thrilled when he’d been admitted to RISD. But they were wary of the job prospects their son would have with a degree in art. (“We were afraid he was going to be a starving artist,” Deb Chesky says.) Not wanting to disappoint them, Chesky had switched majors halfway through his time at RISD, from illustration to industrial design, precisely because it would open up a much larger job market. So Chesky and Gebbia said goodbye, and while they were reunited briefly for the Conair program, Chesky eventually moved to Los Angeles to start his new life as an industrial designer.
Before shipping him off, Chesky’s parents bought him a suit and a car, a Honda Civic that they arranged would be dropped off at the airport when he landed. (Deb Chesky coordinated the logistics of all this, at one point finalizing the delivery on the phone with the car dealer from the dressing room at Macy’s while her son tried on suits. She explained to the dealer that she was buying the car for her son, who was moving to Hollywood. “He said, ‘He’s not going to be an actor, is he?’ And I was, like, ‘No,’” she says. “ ‘It’s just as bad — he’s going to be a designer.’”)
Once in Los Angeles, Chesky moved in with some friends from RISD and started working at the industrial-design firm 3DID. For the first few months he liked the work, designing real products for companies like ESPN and Mattel. But soon it started to become evident that the job wasn’t what he’d hoped it would be. He dreamed of becoming the next Jony Ive or Yves Béhar, famous designers who’d reimagined companies like Apple and the consumer-technology firm Jawbone, but he found his daily work to be uninspiring, mostly rote execution. “It was not silly stuff, but it was so obviously not in the promise of RISD,” he says. The renowned institution had filled him with a spirit of change-the-world idealism: almost any problem in the world could be solved by creative design, he was told; if you could conceive of something, you could design it; and it was possible to design the very world you wanted to live in. As a designer, you could change the world. “But when I got to LA, it was kind of a giant reality check,” he later said. “‘OK, here’s the real world. It’s not what you thought it was.’”
He hadn’t taken to Los Angeles, either. “I spent an hour and a half each way [to work] in a car, an empty car,” he recalls. He felt disillusioned — and that he’d made the wrong choice. “I felt my life was, like, I was in a car, and I could see the road disappearing into the horizon in front of me, and I could see the same view in the rearview mirror,” he later told Sarah Lacy, the technology journalist and founder of PandoDaily, in a fireside chat in 2013. “It was, like, ‘Oh, this is all I’ll end up doing. I guess it wasn’t like they said it would be at RISD.’”3
Meanwhile, Gebbia had finished up at RISD and eventually moved to San Francisco, where he was working as a graphic designer for Chronicle Books and living in a three-bedroom apartment on Rausch Street in the city’s South of Market district. He’d also tried his hand at entrepreneurialism, attempting to launch a line of seat cushions he’d designed at RISD. Conceived for art school students as a comfortable seat when sitting through famously lengthy critiques, or “crits,” they were cheekily called CritBuns and designed in the shape of rear ends. They had won a prestigious award at RISD, with the prize being that the school would pay for the development of the product and give it as a gift to every member of the graduating class. Gebbia had hustled to find a manufacturer and a mold maker in order to produce eight hundred CritBuns within four weeks so they’d be ready by graduation day; the next day, he turned the enterprise into a company. (Gebbia had showed a knack for merging entrepreneurialism and art at an early age: in the third grade growing up in Atlanta, he sold drawings of Teenage Mutant Ninja Turtles to his classmates for two dollars each until their parents told the teachers he had to stop.)
The two talked frequently, Gebbia updating Chesky on CritBuns and the two also brainstorming ideas for any products they might be able to cook up together for 3DID. Always, Gebbia would end their conversations with a plea for Chesky to consider moving to San Francisco so they could start a company together. Chesky was mostly reluctant, always for the same reason: no health insurance, no move. One day, a package arrived in the mail at work from Gebbia, and Chesky opened it to find a pair of commercially produced CritBuns. Gebbia had succeeded at launching them out onto the marketplace, landing a big order at the Museum of Modern Art Design Store, a designer’s holy grail. He had really done it, Chesky remembers saying to himself. (“It was a subtle nudge,” Gebbia says. “It was a reminder: Don’t forget. We could potentially be creating things too.”)
It was enough to get Chesky to start looking around for jobs in San Francisco. In early 2007, he heard about a job opening at Method, then a fast-growing home-products company with a focus on sustainability and award-winning packaging. Chesky thought this could be his answer: it would get him to San Francisco, and it was a design-oriented company whose values were much more in line with his own. He went far in the interview process: he went through multiple rounds of interviews, completed a design challenge, and presented in front of a panel of five executives, getting more and more excited about the opportunity at every step. But in the end, he didn’t get the job; it went to another candidate. He was crestfallen.
But the interviews had gotten him up to San Francisco a few times, and he instantly loved the city. Its energy and the creative, entrepreneurial types he encountered through Gebbia’s circles reminded him of the spirit he’d felt back at RISD. (Gebbia had become the primary leaseholder on the Rausch Street apartment and had fashioned it to be a sort of designers’ collective, carefully interviewing and “curating” like-minded roommates.) He and Gebbia started thinking more seriously about what kind of company they could start. By now Chesky had quit his job — much to the chagrin of his parents — and began creating a different plan for himself. He’d been asked to teach industrial design at California State University at Long Beach and had started getting involved in the Los Angeles design community. He thought he could remain based there and commute to San Francisco for a few days each week to work with Gebbia.
That September, both of Gebbia’s roommates suddenly moved out after his landlord raised the rent, and Gebbia went into a much harder sell mode trying to get Chesky to move to San Francisco and take one of the rooms. Gebbia had already filled one of the rooms, and Chesky would be a perfect fit for the other. But Chesky was reluctant. He couldn’t afford it, and the two of them would need to cover rent for all three bedrooms for a month, because the third roommate couldn’t move in until November. Chesky started pitching Gebbia on — of all things — letting him rent his sofa three days a week so he could commute and essentially live in both places. Gebbia thought that was utterly ridiculous. With the deadline looming and no roommates in sight, Gebbia finally decided he would have to give up the apartment. But the morning he was due to call the landlord, Chesky called him and said he was in; he would take one of the bedrooms.
Chesky said a quick goodbye to his life in Los Angeles — he broke up with his girlfriend, delivered the news to his housemates, left his apartment and most of his possessions, and set off for San Francisco in his Honda late on a Tuesday night. Driving up the coast in the dark, he could barely see the road in front of him, yet all he kept thinking was that it was nothing like the empty road he’d kept seeing in his head for so long when he felt trapped in his job.4 This was not that road. This road, to San Francisco, looked only like possibility.
As the mythologized version of the story goes, when Chesky arrived at the Rausch Street apartment, Gebbia informed him he was on the brink of losing the place, that the rent had gone up to $1,150, and that it was due within the week. Chesky had $1,000 in his bank account. In truth, they’d known for weeks about the higher rent — plus the fact that they’d have to cover the extra empty room in addition to their own — and they had been brainstorming various schemes to come up with the funds even while Chesky was still in Los Angeles. One idea centered around the International Council of Societies of Industrial Design/Industrial Designers Society of America (ICSID/ IDSA) World Congress, the biannual confab for the design community, scheduled for San Francisco in late October. It would draw a few thousand designers to their city, and they knew hotel capacity would be tight and rates would be high.
They thought, why not create a bed-and-breakfast for the conference out of the empty space in their apartment? RISD, after all, had taught them that creativity can solve problems, and Gebbia happened to have three air mattresses in his closet from a camping trip he’d taken. The place was a spacious three-bedroom, so there would be the living room, kitchen, and a full bedroom all for the taking. They could sell a cheap place to stay, and even offer breakfast — and they could advertise their place on the design blogs they knew all the attendees would be reading.
They refined this idea for weeks, and the more they talked about it, the more they realized it was so weird that it just might work — and with a looming deadline to pay the rent, they had little to lose. They started drawing wireframes, or skeleton outlines, and mockups for the website that would advertise their concept. Once Chesky moved in, they hired a freelancer who knew HTML to put together a rudimentary website using their designs, calling the service AirBed & Breakfast. The final product featured a robust website announcing the service (“Two designers create a new way to connect at this year’s IDSA conference”), an explanation of how it worked, and included a listing for three airbeds in their apartment for eighty dollars apiece (amenities listed included a roof deck, a “design library,” “motivational posters,” and 3-D typography). “It’s like Craigslist & Couchsurfing.com, but classier,” proclaimed one “endorsement.”
They e-mailed design blogs and the conference organizers and asked them to help promote their website, which they did; the conference organizers thought it was a funny, oddball idea, and the design blogs were more than happy to help support two of their own. Chesky and Gebbia thought that, with any luck, they’d get a couple of hippie backpacker types and would make enough money to pay rent. Within a few days they had booked three guests: Kat, a thirtysomething designer based in Boston; Michael, a father of five in his forties from Utah; and Amol Surve, a native of Mumbai who’d just graduated from Arizona State University’s master’s program in industrial design.
Their guests weren’t hippies at all; they were professional designers on a budget who needed just what Chesky and Gebbia were offering. True, it required a big leap of faith on their part: Surve, the first guest to book, thought the idea was strange, but, he says, “I was desperate to go to the conference,” and when he came across the website, he says he knew it was created by like-minded people. “You could tell that the concept was designed by designers for designers.” After Googling what an airbed was — new to the United States, he had never heard of one before — he submitted a request on a form on the website asking to stay at the “original” AirBed & Breakfast. When he didn’t hear back, he tracked down Gebbia’s information and called him on his cell phone. (“He was completely surprised,” Surve says. “They had no idea that someone would stay with them.”) Surve made plans to stay for five nights at eighty dollars per night. “It was a hack on both our sides,” he says. “I was trying to hack and go to the conference, and they were trying to hack and make rent. It was, like, a perfect match.”
After landing at the airport and following the BART directions his hosts had provided, Surve arrived at the door of the apartment and was welcomed by Gebbia. “This guy opens the door, he’s wearing an aviator hat and some big trendy glasses, and I was, like, ‘Yep, that’s a designer right there,’” Surve recalls. Gebbia asked him to remove his shoes, gave Surve a tour around the place, and showed him to his room, which contained an air mattress, a pillow, and a welcome package that included a BART pass, city maps, and spare change to pass out to homeless people. (“They were so detail-oriented,” Surve says. “They said, ‘Is there something else we could have added to this package?’ I said, ‘No, this is already too much.’”)
After dropping off his things, Surve sat down on the living-room couch and opened his laptop to familiarize himself with the conference program. Gebbia and Chesky were hard at work at the table, putting together a PowerPoint for their new concept. Surve leaned over and took a peek and spotted a slide about his being their first guest. “It was ironic,” he says. “I was both in the living room and in the slide deck at the same time.” They began peppering him with questions for feedback and invited him to join them in a pitch session they were participating in that night — a PechaKucha, a kind of poetry slam–meets–PowerPoint presentation in which designers pitch ideas to other designers. Gebbia and Chesky had their presentation; now, they could present their end user, too.
The other guests soon arrived at the apartment, Kat and Amol sharing a room and Michael claiming the kitchen. By the time they all set out for the conference together the next day, Chesky and Gebbia were in major hustle mode to promote their new idea. They dodged the registration fee by telling the organizers they were bloggers. They tooled around the conference together, Chesky with a camera slung around his neck so as to best resemble a blogger, and excitedly talked up their new service. “He would pitch anyone and everyone,” says Surve, whom they used as a prop. “Ask him how great it is!” Chesky would say, pushing Surve forward. Surve confirmed how much fun he was having and how it wasn’t just a place to stay. (“My product stuck up for us!” Chesky said recently, reflecting on this. “He was the most unbelievable advocate.”) People were mostly amused. No one took them seriously. During a happy hour in the lounge of the Fairmont Hotel, Chesky managed to edge into a crowd surrounding a well-known designer he’d looked up to for years. He introduced himself and told him about their new concept. The designer was not impressed. “Brian,” he said, “I hope that’s not the only thing you’re working on.” It was the first of many reality checks. (“I remember that so well — like, it’s seared in my brain,” Chesky said.)
Outside the conference, Chesky and Gebbia showed Surve around their city: they took him to their favorite taco place, to the San Francisco Ferry Building, and to Stanford’s design school. They served their guests breakfasts of untoasted Pop-Tarts and orange juice. In a short few days, the five of them became comfortable enough around each other in the apartment that at one point Chesky remembers talking to Michael as he was lying on his air mattress on the kitchen floor in his underwear.5 All told, they made $1,000 from the weekend.
But even with that, they didn’t have the feeling their idea would be huge. It was just too weird. It was something they had come up with to help pay the rent, to keep them afloat, and, if anything, to buy them a little more time to think of their really big idea.
Ecolect.netroommates.com