As Molewood Consulting continues its series of articles on the internet power players – King Entertainment, WhatsApp, SnapChat and the likes, we stop to rest our attentions on Airbnb (boiled down from AirBed and Breakfast) and now simmering gently with their successful bounty from Funding Round D.
As of April, this business, founded by Brian Chesky, was worth a delicious $10 billion. This alternative site offers community users around the world, the chance to avoid giving money to faceless and (comfortable) hotels, instead promoting the spare rooms of anyone, from any city, with a bed a light and some kind of accommodation. Some cities are starting to turn the Airbnb power off, the likes of San Francisco spring to mind (which is awkward when you are based there).
Users from 33,000 cities across 192 countries will dip into the site over and over again. The hosts become users, the users become hosts. It has a self-perpetuating symbiosis where customers become suppliers. If only all businesses could create such magic harmony, where you the consumer, shop in Sainsbury’s then later that week sell them their produce – pineapple juice, newspapers and Fromage Frais… Voila, You are now Airbnb.
Airbnb have, since 2008 generated incredible growth, even Ashton Kutcher invested in it, demonstrating that art imitates life. Airbnb claims to have been enjoyed by a stunning 10 million guests since conception. Can it now use the extra bucks from investors to expand and add to the portfolio? Or will its appetites move into a lateral area of expansion? Its dollars come from the commission on bookings… Other companies playing in a similar space charge a tiered subscription fee.
Airbnb have grown initially organically but have been no stranger to acquisition, NabeWise, Accoleo, CrashPadded and Localmind were all eaten for breakfast. As the rate of venue sign ups slows and diminishes, Chesky’n’team (note that is grammatically accurate unlike Airbnb) seem to catalyse the process by acquiring others that are swimming in the same gene pool. Alterkeys, Roomorama and Travelmob, must be waiting for their phones to ring and for diligence to kick off. If you can’t beat them, join them…
In a time where Crowdfunding, Kick-starters and investors are looking to fund the next big thing, the growth in the community sites, like Airbnb are astounding in both their speed and in their ferocity. Relative obscurity, to revenue of billions in 4 years seems rightly or wrongly attainable. These businesses capture the empathy of the investors all around the world, partly because the model in this case is so simple, and partly because as the spirit of community continues to grow, individuals, firms and funders are looking for a big pay day, at the end of a swift journey. Today Airbnb, tomorrow Just Eat, Hailo, Venue10 and any other community listing site that takes a space and monetises it cleverly and engages the community audience. There are huge opportunities for investors looking for the next big thing in this space.
How can we all find a slice of what is no longer just American Pie?