The organisation that has been selected for analysis is an American hospitality company known as Airbnb. The company was founded by Joe Gebbia, Brian Chesky and Nathan Blecharczyk in 2008 and headquartered in San Francisco, California (Airbnb, 2017). The story of Airbnb started with just an idea of just making a few bucks, when the founders were having trouble paying their rent (Carson, 2016). They decided to convert their home into “Air Bed & Breakfast” by offering overnight stays on air mattresses for conference delegates trying to avoid high hotel rates during a San Francisco conference in 2007 (Guttentag, 2013).
With a simple website, airbedandbreakfast.com; they offered visitors a place to sleep and breakfast in the morning. For $80 per night, the idea succeeded and Airbnb had their first guests (Salter, 2012). Realising that they have a business idea, they turned the website into a service allowing people to advertise their spaces as shared accommodation for tourists, initially focusing on major events. Then, they relaunched the website as Airbnb.com which also include the rental of full residences (Guttentag, 2013). Since then, Airbnb has grown rapidly and now books millions of rooms for customers worldwide (Botsman and Rogers, 2010).
Airbnb creates a peer-to-peer (P2P) platform which allows individuals (hosts) to rent out their living spaces for tourists (guests) (Sundararajan, 2014). Rather than following the traditional way of renting rooms from hotels, Airbnb permits peer-to-peer accommodation whereby large-scale of living spaces is rented from one person to another (Guttentag, 2013). These spaces usually refer to private rooms, shared rooms, entire apartment and houses (Airbnb, 2017). As Airbnb continued to grow, more unique accommodations were added, including villas, boats, tree houses, igloos, castles and private islands (Lang, 2014).
Before the founders managed to get Airbnb off the ground, their proposal was rejected and ignored by 15 angel investors. However, a venture capital firm invested in the idea which helped the founders to refine the business (Carson, 2016). With the $20,000 seed investment, the founders engaged with the users, gathered feedback and promoted Airbnb in New York City (Lang, 2014). Soon after, the number of Airbnb registered users, properties listings and bookings has skyrocketed. As a result, Airbnb caught the attention of many venture capital firms as well as angel investors and they invested millions into the business (Thomas, 2017).
From a handful guests and three air mattresses, today, Airbnb connects over 200,000,000 people to list, discover and book a wide range of unique accommodations in more than 65,000 cities and 191 countries (Airbnb, 2017). As of 2017, the company received over $1 billion in additional funding, bringing total funding raised to more than $3 billion and making Airbnb worth approximately $31 billion (Thomas, 2017). Airbnb’s exponential growth not only made them a serious competitor in the hospitality industry (Oskam and Boswijk, 2016), but a disruptive innovation offering cost-saving, convenience and simplicity (Guttentag, 2013).