It was 12 o’clock, and the space of 31 Area within the IE Business School’s building was all set. The conference room was almost full, everybody was ready to listen, and it started with an informal tone, presenting Nathan Blecharczyk as the visible face and strategist of the second largest startup in the US: Airbnb.
At 1:10 p.m. the room was already full, and Diego del Alcazar -leading speaker of the meeting- welcomed Nathan, who started explaining how the recognized platform of home rental started. The key insight he provided out of their beginning as a company is that the ingenuity of a good idea comes when a need meets a sharpened vision that identifies opportunities.
Who would have thought that a 25% rent increase in a shared apartment would make three students take their first steps towards developing Airbnb? Their story is undoubtedly inspiring, even more so in times when entrepreneurship is more alive than ever.
For us, being close to one of the leaders of Airbnb and knowing that his company has raised more than 2,840 million euros and until today has taken its market value to 29.36 billion euros is, at least, very encouraging.
In the entrepreneurial environment, the term Bootstrapping refers to those startups that have launched with few resources, and have survived the first few years of the journey without requesting a large amount of funding. Nathan Blecharczyk, Brian Chesky and Joe Gebbiaa got the courage to tie their shoelaces tight and start their path, with their cleverness by their side.
The best example of it: their design of the cereals boxes “Obama O’s” and “Caps Macs”, at the precise moment of the electoral campaign. As true “bootstrappers”, they took advantage of the opportunity and sold the boxes for $40 each.
The funding came after hard work and persistence that today has paid off, since they have more than 3 million advertisements in 65 thousand cities, and they can be found in more than 191 countries with over 150 million guests and travelers on their shoulders.
This growth has guided them to earn their latest round of financing, 947 million euros, doubling the value of their operation in just six months. This strengthens them to continue firmly in their expansion, and keep giving their users what they want and need.
For Nathan, people are in search of meaningful experiences, that is why they remain “keeping their eyes opened to new technologies that contribute to solve problems and create experiences; such as the use of GPS, or even artificial intelligence.” Nevertheless, he also considers this deprives the real and first hand experience of the traveler.
Conquering Chinese territory
It is no secret that the Chinese market is meticulous and hermetic when adopting foreign digital technologies and platforms. However, Airbnb has been slowly empowering the eastern territory.
For Nathan, the key has been their strategy: “We are open, we do not enter market to market, and we are everywhere. This naturally brings locals that are added to the Airbnb system in an organic way.” In addition, they have been working for a long time in the process of adapting their product to the requirements of the Chinese network. Once achieved, “it has been an explosion, and China has been for 2 years the country in which we grow more and faster,” confirms Nathan.
However, this adaptation process is not only for the Eastern territory, as each country keeps constantly updating their laws and regulations in terms of rent, and this must be considered in order to operate within the framework of legality. “We are open to making commitments to those who control the laws and regulations: it is important for us to have a good relationship with the cities with which we operate,” says Nathan, when he was asked how they handle the different regulations of the cities where they operate.
This becomes a constant challenge that forces them to stay flexible. Yet it is clear that they’ve thrived: becoming a leader in the hospitality industry without truly owning any real estate; a clear example of the power that the shared economy can have.
The vision is staying loyal to the premise of protecting the travel experience. Airbnb transcends any tourist rental, becoming an experience where impersonality gives way to the feeling of being at home, and where the journey is lived, enjoyed and shared with the locals. This closeness generates loyalty and is, very much so, the reason why this platform has become the second startup in the US after UBER.
After 50 minutes of sharing his experiences and answering questions of the attendees, Nathan finished the meeting with these words:
“Anything is possible if you have the vision. Be persistent, learn from your failures and you will succeed.”