The best entrepreneurs are those we dare to challenge the status quo. Airbnb cofounder Joe Gebbia took on the hotel industry by always asking the question, “how can I make this better?”
Here’s a transcript of our conversation:
Brittany: Hi Emma.
Emma: Hi Brittany.
Brittany: So, we’ve talked about a lot of entrepreneurs. That’s kind of our thing on this show. And today I wanna continue doing this. And it’s funny, I always am like, I wanna talk about my favorite entrepreneur and I call all of them my favorite, but they are all my favorites, So I wanna talk about a company called Airbnb. So Emma, what in the world is Airbnb? Can you tell us a little bit about it?
Emma: I would love to because I love using Airbnb. It is such a fun way to find a place to stay when you travel. essentially what this is it’s people working together to solve, a need for housing, a need for short-term housing. So if you’re traveling somewhere and you want to not stay at a hotel, maybe you wanna save a little bit of money or have a different experience, you go to Airbnb. It’s this website you plug in where you wanna go and people rent out their homes or rent out their properties. And you can either stay in a room in someone’s house or maybe you rent out the whole house. Or maybe they have like a tiny house in their backyard. That’s something that,
Brittany: Oh, that’s fun.
Emma: That I wanna do someday. I think that’d be super fun. Or it could even be like a tree house or a cabin or something like that. There are all different kinds of properties on Airbnb. There’s even caves and castles.
Brittany: Really I knew there were castles. I didn’t know there were caves.
Emma: Yeah, yeah. There’s all sorts of stuff you can find on there all over the world. And basically it started because, Airbnb, and we’ll get into this a bit more with with Britney here, but these entrepreneurs were noticing that people needed a place to stay and that people were also willing to rent out their homes and their spaces to make a little bit of extra money. And it’s supply meeting demand it’s created this awesome product that thousands and thousands of people use every single day.
Brittany: Yep. And this, okay, this is kind of a long story, so I’m gonna kind of rush through it because there were so many good parts and when I was thinking about how to tell the story, I actually had to leave out so much of it. So I’m gonna link to an article that says the whole thing. But, so I wanna make sure we give a shout out to two people cuz there are two founders of Airbnb and in the book, Tuttle twins guide to, I think it’s, I’m gonna get the name wrong, Connor’s gonna kill me. like entrepreneurs, they’re mentioned, they’re both mentioned, but I’m only going to mention one of them and I’ll explain why. So Joe Gebbia, as we’re gonna talk about today, but I wanna make sure his co-founder Brian Chesky, gets a shout out cuz he’s also amazing. But the reason I wanna talk about Gebbia is because he’s what we call a serial entrepreneur. So a serial entrepreneur means he’s constantly doing, he’s done so many things and he started when he was in, I think it was like kindergarten, he was very young. So he was a serial disruptor, which is a term I like. So every time there’s a new innovation in the market, it comes the disruption of something else. So when Netflix came out, it disrupted video rental stores, which you kids don’t even know what that is. So that’s that it means to watch VHS tapes and DVDs. So Gebbia has been challenging what’s called the status quo. So the way things were for a long time. And he’s been fueled by one question and that’s, how can I make this better? And Joe Gebbia is always asking this question. So at a young age, he loved Teenage Mutant Ninja Turtles who didn’t. And he also loved to draw. So he took his passion for this and he started drawing pictures of them and then selling them to his classmates. So he would charge a dollar for small drawing, then $2 for large drawings. And he was actually like hustling, like he was making some money as an amateur artist, which is pretty cool. And he was also making his classmates happy. So like you said, Emma, there’s like this demand he was meeting.
Emma: Yes, absolutely. It’s, I mean, that sounds like a win-win to me. I remember there were some awesome artists in my class and I’m no, I’m no artist myself. So I would look over and be like, how are you doing that? So I think I maybe would’ve bought something from him back in the day. But if I am remembering this story correctly, the school actually cracked down on him. And parents called the teacher wondering why their kids were coming home with less lunch money than they got sent to school with. And that was kind of his first instance of disruption and his business being shut down sort of by the authorities. But as Gebbia told Tim Ferris in a podcast episode, he said it was his first brush with regulation. And we know it was not the last.
Brittany: It didn’t stop him though. And this is another story I love. So he’s a senior in high school and the student body, like there was like a student body presidency, like president, vice president, they unveiled this t-shirt that was gonna be like that year’s graduating class T-shirt and Gabby, is it Gabby or Debbie? Am I saying it wrong? I hope I’m not saying it wrong, but Gebbia.
Emma: I don’t know. I’m going to assume that you’ve got it right though.
Brittany: Okay I think it’s Gebbia but he wasn’t impressed. He’s like, this is the ugliest shirt I’ve ever seen. So he had no background in design, he just knew he could do a better job. So he teaches himself Photoshop. He literally, and this is before YouTube, remember like he didn’t even know what he was doing. He creates a better version of the class shirt. So he spent all his money doing this, realized that now he has all these shirts and no buyers, right? Cause everyone was buying from the school. So he went around and sold them. And this is something a lot of people don’t get is you can have a dream, but you have to work for that dream. So that is kind of what sets Gebbia apart. So he run around school selling all his t-shirts to classmates.
Emma: That is so cool. And I love that he was like, Hey, how can I improve this? But then also had the hustle Yeah. To actually go out and sell it and exactly bring it to the consumers. That’s the crucial part of a business. And the t-shirt endeavor, you know, we, it gave him a love for design. So after high school, he attended Rhode Island School of Design. And during the course of his education, he’d himself more than capable of not only completing these difficult design projects but also finding a way to get them funded and into the hands of consumers, which is something that every entrepreneur needs to be able to do. So in art school, there are long periods in which students critique each other’s work. And during these sessions, students sit on dirty hard stools that were known for leaving black marks on the behind of the sitter after they stood up from the chair. So there’s a problem right there that he’s identifying. And this, this problem was so common among art students that everyone had their own horror stories to tell. And during his senior year, j had decided that he was going to fix this problem. So he customized a foam cushion that would fit comfortably on top of the art school stools. And he named it Crit Buns because their use was intended for long periods of critique sessions. And he had created this solution to a widespread problem, but merely solving the problem for himself was not enough because he knew that the other students would love these cushions if they only knew about them and he knew that they would be willing to pay for them.
Brittany: And he actually ran into the same problem. He ran with a t-shirt. So like he has this great idea and then all of a sudden he is like, wait a second. Like how do I actually spread the word about this? Like, how do you go up to someone and be like, Hey, does your behind hurt? Are you thinking it getting like, you know, thoughts on it? Here’s a cushion. So a couple of months before graduation, the school announced this design contest for a product that could be given out to the entire graduating class of 2005. This was perfect, right? Gebbia saw this opportunity, and if he was able to win, he would actually get his idea funded in addition to, you know, spreading the word about his cushions.
Emma: And as luck would have it, he won the contest. But unfortunately he had no idea how to create hundreds of his product. He had only come up with one or just a little handful. And what was even worse, he had no idea that he was going to do it in time for graduation, which was now only four weeks away. So imagine you’re thinking about your finals, you’re thinking about studying for tests and then all of a sudden you have to come up with hundreds of these products for this, contest. So he made a bunch of calls to different vendors, which are people who help with the creation of a product. And he was routinely told that he would need at least six weeks to get the raw materials that he needed to make his product for everybody. But that wasn’t going to work for him. And he knew that he needed to complete the project no matter what it took. So after a lot of phone calls and some creative problem-solving, j was able to produce the crit buns for everyone. And the day before graduation, hundreds of the seat cushions arrived on campus.
Emma: And one of the wonders of this product is how they were sold. It was just 100% word of mouth. The cushions were meant solely for the art students, but other consumers were actually finding other uses for them. And every consumer had a story about their experience and someone would tell the story of how the cushion helped them or where they had used it. And those stories would resonate with other consumers. And it was that experience that taught Gebbia the importance of storytelling when attempting to get a product from a prototype or just an idea to on the shelf ready to sell to a consumer. And when he was selling these cushions in Japan, he was unable to rely on storytelling because he didn’t speak the language. And it wasn’t until he started working with the translator who could do that storytelling for him that he began really selling the product. And that would help him later on with Airbnb and after school he continued to sell these, these cushions while taking up residents moving to San Francisco. And it was there that he met the other co-founder of Airbnb, his roommate Brian Chesky. And the two of those guys wanted to attend a design conference that was happening in the Bay Area, which is a nickname for San Francisco area. And that’s where they both lived and both were bothered because they knew that a lot of people in the area would be, not able to attend just because hotel accommodations were in short supply. There were too many people coming to the area and they were super expensive cuz hotels always jack up the price. Yeah. When there’s an event in town.
Brittany: And like you were always saying like, he’s identifying these problems, right? And that is exactly what you did here. He saw a problem and he’s like, you know what, I can do this better. He asked himself that question again, how can I make this better? So he wanted to alleviate these problems. So it was then that the two of them decided it would be fun to purchase three air mattresses and charge low rates to like conference and heading, people attending these conferences. And they were, he was like, they were gonna say like, Hey come stay at our apartment. We’ve got three air mattresses, we’ll get some blankets. You know, it’s like a big slumber party. And this concept was actually strictly meant for like conferences. So it wasn’t necessarily like we’re gonna challenge the hotels even though they later did. but they didn’t really see at the time how this concept could be expanded and how honestly it would disrupt the entire hotel industry. But as it turned out, people loved this idea. I don’t know how much I would love staying on an air mattress in a stranger’s apartment but they loved this idea. And so, you know, before they knew it, they were like hosting their first three Airbnb guests. And while the idea was received well at the conference, cause there were a lot of like conferences are really full of I innovative people like trying who were more open to trying new things. But, the cool thing is one of the guests was on stage like he was giving a presentation and he actually was like, Hey, I just did this thing. So just like the initial Crip buns, nobody knew about Airbnb. It wasn’t until people started talking about it, and this was right before the 2008 Democratic National Convention. So the national conventions, both Republicans and Democrats have them. That’s where they nominate their candidates. And, you know, love or Hate them, Barack Obama was a historical candidate and that was probably around the time where before many of you were born. But this was a huge deal. Like the Democratic National Convention had never seen this much demand. So as a talented speaker, you know, Obama would pull in these record breaking audiences. Young people loved him. So the national convention actually had to relocate to a larger venue in Denver because there were just so many people, because everybody was in there and grabbing a hotel rooms, like you said there, there wasn’t enough to keep up for demand, just like in the San Francisco analogy. So it was such a high demand, you know, hotels were either jacking up the prices to ridiculous amounts and a lot of these people were young, couldn’t pay for it or there just simply wasn’t room. And so Gebbia and Chesky were like, oh my goodness, we can relaunch Airbnb cuz was supposed to be kind of like a one-off thing. Yeah. And we can start hosting people and we can ask people to open up their homes. So they contacted CNN, which is a news outlet, and they did some other news outlets to let them know what they were going to do, but they were like, yeah, we’re not interested. This is a silly idea by a bunch of like silly like college kids. Like cool story kid. So desperate for media attention, they started focusing on bloggers. And this was right around the time or maybe a little after like blogging started being big where independent journalism became a thing because it wasn’t just the news networks on tv, right? People had a voice because of the internet and they didn’t even realize how brilliant this plan was. But now they know. So when it came to reporting on local news concerning the convention, the local news networks relied on local bloggers, like that’s who they were looking for. And the national news networks would pick up on local, you know, local news networks. So that’s how they ended up getting like a, you know, before like people didn’t know who they were and all of a sudden they’re showing up on the same news networks that are really shutting them down.
Emma: Yep. It’s pretty funny how that can happen sometimes. Before they even knew what was happening, they were being featured on these huge news programs, like you said, Brittany, the same ones that had just been shutting them down. And this time they were getting their message out to millions of people watching tv. So within a few weeks, around 800 Airbnb reservations had been made for the conference and Airbnb was officially on the map. And as they say, the rest is history. But who knew that the young boy that was selling these ninja turtle drawings in class could one day create this business that would completely redefine the way we travel? And while his high school administrators may not have thought very much about the high school prank, Jebia is truly, or Gebbia, I keep saying it wrong, no worries. He’s no worries. He’s an entrepreneurial genius. He’s someone who looks at people’s problems and thinks, how can I make your life better and easier? And that’s one of the things that we talk about all the time. It makes a good entrepreneur and he’s someone who I think deserves his success because he took a problem that a lot of people had and he turned around and he solved it.
Emma: And that is the kind of thing that we just love to see. And yeah, if you wanna read any more about him, we’re gonna put a bunch more information and kind of articles in the show notes. feel free to go check out Airbnb too and see what kind of castles and caves and stuff like that you can find. There’s all kinds of stuff on there. But we will talk to you guys again soon. Brittany, thank you so much.
Brittany: Of course. I’ll talk to you later.