[News Inside] From Unemployed Behind on Monthly Rent to Billionaire Worth Over 10 Billion Dollars

Airbnb Founders Brian Chesky, Nathan Blecharczyk, and Joe Gebbia

▲Brian Chesky, CEO of Airbnb, displayed on a billboard in the middle of New York
[Image source=AP News]

[Asia Economy Reporter Kwon Jaehee] "I was mentally prepared, but I never expected the market capitalization to exceed 100 billion dollars from the opening price. It’s unbelievable how much the situation has changed from the early days of being broke at startup, and the idea of going public in the midst of the COVID-19 pandemic is just as unbelievable."

These were the words of Brian Chesky, co-founder and CEO of the accommodation-sharing app Airbnb, in an interview with Bloomberg TV after its listing on the New York Stock Exchange on the 10th (local time). He was at a loss for words for a while, repeatedly expressing his astonishment.

On that day, Airbnb became a hot topic as its stock price surged 112.81% from the IPO price of $68 on the New York Stock Exchange. Accordingly, Airbnb’s market capitalization closed at $144.71 per share, reaching a market cap of $100.7 billion (approximately 109 trillion won). The Wall Street Journal (WSJ) reported that this surpassed the combined market caps of global hotel chains Marriott ($42.7 billion), Hilton ($29.7 billion), and Hyatt ($7.5 billion), as well as the market caps of the world’s largest online travel agency Expedia and the established hotel reservation company Booking.com.

With this IPO, the equity value held by co-founder and CEO Chesky reached $11.2 billion. The equity values of co-founders Nathan Blecharczyk and Joe Gebbia were also valued at $10.4 billion each.

The idea of "shared accommodation" by renting out spare rooms started with Chesky and Gebbia, childhood friends and co-founders. They became close while studying industrial design at the Rhode Island School of Design, one of the world’s top art schools. After graduation, Chesky sought a job in Los Angeles, while Gebbia continued studying business at Brown University. Later, Gebbia settled in San Francisco and invited Chesky to start anew there, which Chesky gladly accepted.

[Image source=Reuters Yonhap News]

They were young men in their twenties full of ambition and dreams, but life was not easy. Job hunting was difficult, and eventually, they reached a point where they couldn’t even pay rent. It was October 2007. The annual conference of the Industrial Designers Society of America was scheduled to be held in San Francisco, but hotels were fully booked, leaving many designers without accommodation. They came up with the idea of renting out part of their apartment to travelers and providing breakfast in exchange for money. Chesky and Gebbia bought three air mattresses and rented out their rooms to designers who couldn’t book hotels, providing breakfast as well. They earned about $1,000 in just one week and began to commercialize the idea. The company’s name was derived from the air mattresses and breakfast they provided, originally called AirBed & Breakfast, shortened to "Airbnb."

Gebbia invited their former roommate and developer Nathan Blecharczyk to join them after sharing their idea to create a website. Thus, they founded Airbnb in August 2008.

Just as life had not been easy for them, the early days of Airbnb were also challenging. At the time, services renting out spare rooms to travelers were already widespread in the U.S., so demand was lower than expected. To avoid debt for startup capital, they created numerous credit cards, and it is well-known that 15 employees worked together in Chesky’s apartment.

External investors were also cold. Since the business model of accommodation sharing was not new, venture capitalists found it difficult to identify Airbnb’s unique differentiation.

Airbnb’s differentiation lay not in the service but in its founders. Driven by desperation with no way to retreat, their fierce determination caught the attention of venture capital firm Sequoia Capital, which invested $585,000 in 2009. This was their first investment.

▲(From left) Joe Gebbia, Nathan Blecharczyk, Brian Chesky

From then on, they began to concretize and expand the business, putting it on a full-fledged track. They expanded service areas beyond San Francisco to places like New York, visited hosts’ homes to take photos for online listings, and tourists who experienced Airbnb wanted to introduce it to their own cities, which eventually led to nationwide expansion. Airbnb’s monthly revenue grew more than tenfold to $50,000 within a year.

Luck was also on their side. When the subprime mortgage crisis burst the real estate bubble, many homeowners were unable to repay loans and became interested in renting their homes to tourists, which provided a growth platform for Airbnb.

Despite harsh criticism of their business, the three never forgot one thing: Airbnb’s core value of being "easy and cool." It had to be easy for anyone to use and so appealing that anyone would want to use it.

Airbnb’s ultimate destination is not just accommodation sharing. They are pursuing a transformation into a comprehensive travel business.

Even now, as billionaires, Chesky, Gebbia, and Blecharczyk rent out their own homes near San Francisco to travelers through Airbnb.

This content was produced with the assistance of AI translation services.