> New ideas often seem crazy at first (e.g. renting out an airbed in your apartment to a stranger)<p>N.B. I'm currently travelling and using Airbnb almost exclusively for accommodation, if that's somehow relevant.<p>Airbnb seems to have become the cliche example of a 'crazy idea' that turns into a unicorn and, honestly, I struggle to see why people think the idea, per se, was crazy or groundbreaking.<p>It's not a crazy idea. In fact it's a very natural, obvious idea, that has existed forever. People have rented, and sub-let, rooms for decades. The problem has always been high barrier to entry (on both sides) and therefore low liquidity in the market, such that short term 'holiday' type lets are too much of a hassle to be tenable, and only longer term lets have been feasible.<p>The idea has always been there, what's not really been there until Airbnb, and what is their remarkable achievement, is the building of a singular, reputable, trustworthy, easily accessible marketplace for this, to get the liquidity to where it needs to be to be workable.<p>It's the execution on this, not the idea itself, that's the remarkable thing. If it was such a crazy idea, it would have taken much, <i>much</i> longer (+10 years perhaps) to have truly caught on. The fact that they've had such rapid growth points to the fact that a lot of hosts and travellers were ready for it and just waiting for the opportunity to take part in the short term lets marketplace.
Lots of these lessons are missing the bigger point. The original investor rejections had it right on the business model, except missed the determination of the founders. Sleeping on airbeds and having hosts serve breakfast is a niche market.<p>Airbnb changed their name and pivoted into the vacation rental rental space, and now shared rooms and "bed and breakfast" are a tiny fraction of their listings, but this opened up a much bigger market. IMO, this is the big lesson.
"Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats." -- Howard H. Aiken<p>The real difficulty seems to be to distinguish between ideas that genuinely deserve rejection and ones that are only rejected because they're new and seem crazy at first.
Anyone know why airbnb became so much bigger than flipkey, vrbo, and homeaway? Was it just being lucky to be being based in SF and the associated network effect? I.e. people could have theoretically used the aforementioned companies to rent their room in SF or NYC, but they didn't.
These are tough lessons to take at face value. Unicorns are even harder to replicate so their path to success is also fraught with unique challenges. The whole "keep going" and "don't give up" mentality is admirable, but it's also admirable to know when your product-market fit isn't there, or when it's time to close up shop. A healthy dose of skepticism and reality is the needed yang to balance the yin of persistence and resilience.
Investors like to categorise ideas into macro tech trends and hypotheses. There's a good reason for this but it also means you can miss the biggest ideas (the space-defining ideas).<p>I imagine a lot of investors looked at Airbnb and thought, "cute". Then someone coined the phrase, "sharing economy", in the wake of its growing success and a lot of other "cute" ideas raised money.<p>From my experience, what investors often lack is an understanding of the vision. I remember someone describing Airbnb to me back in 2010. I said it would never catch on for XY&Z obvious reasons, including it sounded like a bad experience. That's because I wasn't pitched the vision correctly. I bet the Airbnb guys took a long time to figure out the right way to pitch it.<p>Investors like to be objective/data-driven and therefore don't spend too long building an emotional relationship with the product. Again, there's a reason for that, but sometimes founders have products that don't look like anything that exists elsewhere, so it's super important to convey how it really works.
There's encouragement here for entrepreneurs to persist in the face of rejection.<p>It's hard to say the investors did anything wrong however. Anyone can pick a winner in hindsight. May as well make a list of winning lotto numbers and say "see the ones you didn't pick"?
I think the most salient point is #5.<p>This principle is similar to concepts in data science and medical statistics (esp patient reported outcomes). Take the answer as fact (you can worry about outliers later), and take the reasons and justifications with a grain of salt.
The idea was not crazy. Before AirBnB came to be, a "free" version of it, called Couchsurfing, already existed.<p>Hat tip to the AirBnB guys for finding a way to make money out of that idea.
Well written!
Thank you Jessica for sharing your thoughts.<p>My personal note on rejections:
When I decided to step up and found, I've made a decision to stop asking for permission from others and build something by myself. I remind myself of that on every rejection.<p>No rejection will define what I'm going to be. Rejection only define how better I'm going to become next time, until no investor/partner/person will wanna miss-out.
> When investors aren't sure what to make of these ideas, they write them off as inconsequential. Don't be misled by this into thinking your idea actually is inconsequential.<p>And perhaps that means it's time to change-up your pitch?
What about if your idea will never succeed? You also need to understand when to stop and move on.<p>With airbnb, there were rejections, but there were also two facts that makes me believe it was a different story:<p>* They could already make it profitable by just starting to use their own service<p>* There was an idea of making the world a better place by doing this. This might sound cheesy but I truly believe airbnb, couchsurfing, blablacar and others have really changed the world and how people travel/interact with each other, in a good way. I'm sure I'm not the only one who can see that.
Here we go again<p>What's being ignored is that the odds of your company becoming the next Air BNB or even 1/100 as successful as Air BNB are pretty slim.<p>I dunno what the stats on y combinator is, but I imagine the vast majority of start-ups are will never be sold for over $100 million<p>But I wish I were there, no doubt. I like the idea and I would have pitched then $10k as throwaway money and be a millionaire 100 times over.
The lesson it seems to me is that that is not the correct way to go about raising a small, $150k round. Founders should be able to round that up from friends and family.