Extract

The Airbnb Story by Leigh Gallagher

Read an extract from the opening of The Airbnb Story by Leigh Gallagher and find out how three guys stumbled upon an industry-disrupting idea almost by accident.

 

 

The Hustle

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 humor — 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 colourful 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?”

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.’”

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 designoriented 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. This was not that road. This road, to San Francisco, looked only like possibility.


They thought, why not create a bed-and-breakfast for the conference out of the empty space in their apartment?

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 & Couch surfing.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 leapof 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.”

Find out more about the author

The Airbnb Story

Leigh Gallagher

'An engrossing story of audacious entrepreneurism' -- Charles Duhigg

'Captures the remarkable journey of Airbnb exceedingly well' -- Reid Hoffman

'fast paced, fun dive into one of the seminal firms of our time' -- Rana Foroohar

In 2008, two broke art school graduates and their coder-whiz friend set up a platform that – in less than a decade – became the largest provider of accommodations in the world. Now valued at $30 billion, Airbnb is in the very top tier of Silicon Valley’s ‘unicorn’ startups.
Yet the company has not been without controversy – disrupting a $500 billion hotel industry makes you a few enemies. This is also a story of regulators who want to shut it down, hotel industry leaders who want it to disappear and neighbourhoods that struggle with private homes open for public rental. But beyond the headlines and the horror stories, Airbnb has changed the terms of travel for a whole generation – where a sense of belonging has built trust between hosts and guests seeking a more original travel experience that hotels have struggled to replicate.
This is the first, definitive book to tell the remarkable story behind Airbnb in all its forms – cultural zeitgeist, hotel disruptor, enemy to regulators – and the first in-depth character study of its leader Brian Chesky, the company’s curious co-founder and CEO. It reveals what got Airbnb where it is today, why they are nothing like Uber, and where they are going next.

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