Recently the AirBnB CEO,Brian Chesky, posted a few emails they received from investors (When was the last time a CEO did that?).
All the emails had one thing in common.
A reason to deny them funding. Some really logical and rational reason to justify the “NO” was in every email.
Here are those emails, sourced from Brian Chesky’s Medium post.
We all know where the company is today.
They have revolutionized the hospitality industry.
If the image is still vague in your mind, these numbers might give you a clear idea about where they are today.
- 500,000 Listings
- 33,000 Cities
- 192 Countries
- 7 Acquisitions
- $2.31 Billion in funding from 31 investors
- $24 Billion Valuation
And their story is a masterpiece in itself. It has the perfect combination of dedication, rebellion, struggle, and cereal (seriously!).
So without wasting another moment let’s begin with their story.
Summer 2008, the founders needed a way to raise funds for the launch of the website.
Instead of waiting until they have enough money in their savings account or dropping the idea altogether, the founders came up with something else, something creative.
They bought a lot of cereal !
The best way they thought to raise the money for Airbed and breakfast (it was shortened to Airbnb later) was to sell cereal.Why on earth would they do that! Couldn’t they have taken a consulting gig or something? This is just lame.
Lame, it might appear at first, but they weren’t stupid; they had a plan for all of it.
It was the election season, they wanted to sell cereal, and they decided to ride the wave.
Each representative organised conventions all over the country, the campaigns were at their peak. People were flooding to every event in support of their candidate, each one of them wanting to hear what the person wanted to do for their country.
Team AirBnB printed two sets of boxes, both sets had the name of two different representatives on them. Both the representatives they chose were at the top of the race in those presidential elections.
They went from convention to convention selling their cereal boxes for $40 a box.
It was obvious that all of the people who went to a convention had to walk out more impressed with their candidate because both representatives were awesome speakers and knew how to influence people.
They took advantage of people’s emotions, sold them cereal with image of the candidate whom people came to support and listen to. Pure Genius.
From all of this they raised $30,000 for the website. Not much compared to where they are today, but enough to just get off the ground.
This is where average stories reach their end. The founders then launched the website, gained traction, raised funds and “lived happily ever after”.
Good stories begin at this point !
Even with the $30,000 in their bank account they weren’t able to gain good enough traction. Not many people were using their platform.
Even so, in any case the platform had to be kept online, for that one little shred of hope and belief that they had built something useful and people will use it.
They hit the real low point. In order to survive some hard decisions had to be taken, some really hard decisions.
Need more money?
Cut off the luxuries.
Still need more money?
Cut off the necessities.
They started feeding on the cereal they had left over after the sales of their “creative” fundraising campaign. Things were bad. Imagine yourself doing that.
I can’t.
But, luckily for them.
That phase didn’t last long.
The following spring they got a meeting with Paul Graham of Y Combinator. They got into the 2009 winter class of the accelerator from which they received $20,000 in funding. Not long after that they received $600,000 from Sequoia Capital and Y Ventures.
Not only that. Their success became the best revenge they could take from the same investors who denied them.
They made the people who rejected them regret their mistake of passing on. Fred Wilson from Union Square Ventures passed on Airbnb in a notorious manner when they approached him.
In 2011, Wilson said that they have a box of Obama O’s in their conference room to remind them to never make the same mistake again.
In Wilson’s words,
“Whenever someone tells me that they can’t figure out how to raise the first $25,000 they need to get their company started I stand up, walk over to the cereal box, and tell this story. It is a story of pure unadulterated hustle. And I love it.”
Now investors who passed on aren’t the bad guys in this story. Would you have given even a penny to them 6 years back?
They had an unproven and kind-of impractical concept at that time, all it took was for someone to prove the convention wrong. And all that it took was for someone to have that spirit and belief that whatever he is doing, it might not be easy, but it’ll be worth everything.
So don’t worry if people say this won’t work out, don’t worry if even the people you look up to say you won’t be able to do this. Prove them wrong. Show them you are not what they think you are.
That’s what Airbnb did. At that time the idea sounded foolish, they knew it did, but they had a strong belief that they could make it work.And they did !
At last, I’ll leave you with a line from one my favorite movies.
If no one had told you that bullets flew straight, and I gave you a gun, and told you to hit the target, what would you do?
Trust yourself like its a matter of life and death! Let your instincts guide you !
