Big companies rarely end up with the same business model as when they’d started. This article is part 1 of the series of Airbnb’s Business Model Canvas Evolution.
- Airbnb’s Business Model Canvas (part 1): Where The Idea Came From
- Airbnb’s Business Model Canvas (part 2): The Prototype of The Online Booking Platform
- Airbnb’s Business Model Canvas (part 3): Early Days
- Airbnb’s Business Model Canvas (part 4): Expansion
- Airbnb’s Business Model Canvas (part 5): Becoming An Entire Hospitality Brand
2007: How Airbnb was born
Roommates Joe Gebbia and Brian Chesky had met at Rhode Island School of Design. As cliché as it sounds, the two designers were struggling to make rent. Fortunately, a San Francisco Design Conference in October 2007 gave them a way to make a few extra bucks, and the idea of Airbnb was born.
The two men decided to take advantage of the hotel room shortage by buying three air mattresses and renting out their living room. The business plan was simple; offer an alternative, comfortable bed and breakfast place for desperate conference participants. The idea did pretty well.
They designed a simple website called airbedandbreakfast.com. The website is simple, consisting of a blog and a map. There wasn’t a booking link or any contact information for potential guests to get in touch with the hosts. The guests had to look for contact information online to book a room.
Gebbia and Chesky managed to get three people who paid $80 each to sleep on the air mattress despite the website flaws. The bookings allowed the pair to meet their rent obligations. The experience made them realize that it could be a viable business endeavor for them. Conferences and other big events happened frequently, and hotels and other mainstream accommodation would always be in short supply.
However, Gebbia and Chesky had no start-up experience whatsoever, so they enlisted an old roommate, Nathan Blecharczyk (a Computer programmer), to help them build a business.
Initially, they worked on a roommate-matching service for four months. They abandoned this idea when they realized that there was a site called Roommates.com that was already operating. They went back to working on their Air Bed and Breakfast idea and launched the website.
Business Model Canvas of Airbnb: Where The Idea Came From
Value Proposition
- Comfortable enough bed near conference venue
Customer Segments
- Desperate conference attendess in San Francisco
Customer Relationships
- Personal contact
Channels
- Website with a blog and a map
Revenue streams
- Air-bed and breakfast service
Key activities
- Building a website
Key resources
- 3 air mattresses
Key partners
Cost structures
- 3 air mattresses
>> Read next article in the series: Airbnb’s Business Model Canvas (part 2): The Prototype of The Online Booking Platform
