Two Designers Rented Out Their Apartment to Pay Rent

Airbnb began in 2008 when Brian Chesky and Joe Gebbia, two designers living in San Francisco, rented out air mattresses in their apartment to make money. They were struggling to pay their own rent and decided to list their spare space on a website they built themselves. They called it "Air Bed and Breakfast" — later shortened to Airbnb — and charged guests $80 a night to sleep on air mattresses in their living room.

The first guests were attendees of a design conference in the city. The experiment worked: Chesky and Gebbia made enough money to cover their rent that month. What started as a one-time solution to a cash flow problem became the foundation of a company that would eventually operate in nearly every country in the world.

Key Takeaways

  • Airbnb was founded in 2008 by Brian Chesky and Joe Gebbia, who rented air mattresses in their San Francisco apartment to pay rent.
  • The first guests came during a design conference, and the founders charged $80 per night for a spot on an air mattress.
  • Nathan Blecharczyk joined as the third co-founder and built the technical infrastructure that made the platform scalable.
  • The company raised venture capital in 2009 and expanded from San Francisco to other cities, then internationally.
  • Airbnb went public in December 2020 and is now one of the largest hospitality platforms in the world.

Nathan Blecharczyk Built the Technology Behind the Platform

Brian Chesky and Joe Gebbia handled the design and business side, but they needed someone to build the actual website. In 2009, they brought on Nathan Blecharczyk, a programmer who had recently moved to San Francisco. Blecharczyk wrote the code that made it possible for hosts to list properties and for guests to book them — the core mechanics that still run the platform today.

With Blecharczyk handling the technical work, the three founders could focus on growth. They began recruiting hosts beyond their own apartment, listing more properties in San Francisco, and then expanding to other cities. The platform's design was straightforward: hosts uploaded photos and a description, set a price, and guests could book directly through the website.

Early Growth Was Slow Until Venture Capital Arrived

The first year was difficult. By the end of 2008, Airbnb had only a handful of bookings. Investors were skeptical — the idea of renting out your home to strangers on the internet seemed risky and unproven. The founders struggled to convince people that the platform was safe and legitimate.

The turning point came in 2009 when Airbnb raised $20,000 in seed funding from Y Combinator, a startup accelerator in Silicon Valley. This money gave the founders runway to hire staff and market the service. They also began traveling to cities like New York and Los Angeles to photograph properties and recruit hosts in person — a labor-intensive approach that helped build trust in the early days.

By 2010, Airbnb had expanded to multiple cities and was processing thousands of bookings per month. The company raised larger rounds of venture capital, which funded further expansion and product development. Each round of funding allowed them to hire more people and enter new markets faster.

International Expansion and the Path to Going Public

After establishing itself in the United States, Airbnb began expanding internationally in 2010 and 2011. The company opened offices in Europe and Asia, adapted its platform for different languages and currencies, and worked to understand local regulations in each country. This global expansion was expensive but essential — the company's long-term value depended on becoming a worldwide service, not just an American one.

Growth accelerated through the 2010s. By 2015, Airbnb was operating in over 190 countries and had processed millions of bookings. The company raised billions of dollars in venture funding and became one of the most valuable private companies in the world. Investors saw the potential: Airbnb was disrupting the hotel industry by letting ordinary people monetize their spare rooms and empty homes.

In December 2020, Airbnb went public on the NASDAQ stock exchange under the ticker symbol ABNB. The company's initial public offering valued it at over $100 billion, making it one of the largest hospitality companies in the world — larger by market value than many traditional hotel chains, despite being only 12 years old at the time.

How Airbnb Made Money From the Start

Airbnb's business model was straightforward: the company took a cut of each booking. Hosts set their own nightly rate, and Airbnb charged both the host and the guest a percentage of the transaction. This meant the platform made money only when bookings happened, which aligned the company's interests with both hosts and guests.

In the early days, the commission was modest — around 10 to 15 percent — to encourage adoption. As the platform grew and became more valuable to hosts, Airbnb gradually increased its take. By the time the company went public, it was taking roughly 15 percent from guests and 3 percent from hosts on most bookings, though these percentages varied by market and booking type.

Challenges That Shaped the Company's Growth

Airbnb faced significant obstacles as it scaled. Hosts worried about property damage and theft. Guests worried about safety and whether listings matched their descriptions. Regulators in cities around the world questioned whether short-term rentals should be allowed at all, and some passed laws restricting or banning the practice.

The company responded by building trust mechanisms into the platform: a review system where guests and hosts rated each other, a host protection program that covered certain types of damage, and a customer service team to handle disputes. Airbnb also worked with city governments to understand their concerns and, in some cases, to help enforce local regulations.

The COVID-19 pandemic in 2020 created a sudden crisis — travel stopped, bookings collapsed, and the company's revenue plummeted. But demand for short-term rentals rebounded faster than expected as people began traveling again and sought alternatives to hotels. This recovery helped Airbnb's public offering succeed despite the uncertain economic environment.

The Founders' Backgrounds and Why They Started Airbnb

Brian Chesky studied industrial design at the Rhode Island School of Design. Joe Gebbia also studied design at the same school. Both moved to San Francisco to pursue careers in design but struggled financially in the expensive city. Their shared experience of financial stress and their design backgrounds made them well-suited to solving the problem they faced: how to make money quickly while creating something people would actually want to use.

Nathan Blecharczyk came from a computer science background and had already worked as a programmer before joining Airbnb. His technical skills were essential — without someone who could build and maintain the platform, the idea would have remained just that, an idea. The combination of two designers and one engineer gave the company a foundation of both user experience and technical capability.

Frequently Asked Questions

What year did Airbnb start?

Airbnb was founded in 2008 by Brian Chesky and Joe Gebbia. Nathan Blecharczyk joined as the third co-founder in 2009. The company launched publicly in 2009 and has grown continuously since then.

How much money did Airbnb make from its first rental?

Airbnb's first guests paid $80 per night to sleep on air mattresses in Chesky and Gebbia's San Francisco apartment. The exact number of nights they stayed is not widely documented, but the founders have said this initial rental was enough to help them pay their rent that month.

Where did Airbnb get its first funding?

Airbnb's first significant funding came from Y Combinator, a startup accelerator in Silicon Valley, which invested $20,000 in 2009. After that, the company raised larger rounds of venture capital from firms like Sequoia Capital and Andreessen Horowitz.

Why did Airbnb succeed when other rental platforms failed?

Airbnb succeeded because it solved a real problem for both hosts and guests, built trust through reviews and protection programs, and expanded globally at the right time. The company also had founders with complementary skills — design and engineering — and was willing to invest heavily in customer service and regulatory relationships.

Is Airbnb still owned by its founders?

Brian Chesky, Joe Gebbia, and Nathan Blecharczyk remain involved with the company. Chesky is the CEO. After the company went public in 2020, the founders' ownership stake was diluted by venture investors and public shareholders, but they remain significant shareholders and leaders.