- The speaker starts by acknowledging the large audience and expressing gratitude for their excitement.
- They show charts and numbers to demonstrate the rapid growth and success of Airbnb.
- The speaker emphasizes that success is not easy and compares it to training for the Olympics.
- They share their personal journey, starting with learning programming at a young age and running a business in high school.
- The speaker talks about their corporate job experience and realizing they were not learning enough, leading them to join a startup and learn from their mistakes.
- They highlight the importance of choosing the right partners in a business venture.
- The speaker describes how Airbnb started as a solution to their own rent problem, by renting out a vacant room during a design conference.
- They mention the positive experiences and relationships formed from that initial idea, leading them to consider expanding it to other events and people.

- The speaker was hesitant about a project pitched to him by designers for events and people.
- They decided to create a simplified version called Airbed and Breakfast Lite.
- The goal was to launch the site for South by Southwest in 2008.
- They quickly built a directory service with no payments or reviews.
- The idea to handle payments upfront came after a negative experience with a host.
- They realized they could expand their service beyond events and make it as easy to book as a hotel.
- They met with angel investors, but struggled to show progress and faced challenges.
- They eventually put fundraising on hold and focused on building their vision for the Democratic National Convention.
- They launched the new version with 800 properties and received media attention.

- The speaker's company initially gained attention and media coverage, but quickly lost relevance and experienced a demoralizing period.
- The financial crisis added to the challenges of raising money for the company.
- They decided to give it their all before considering quitting and applied to Y Combinator, despite doubts from Paul Graham.
- They focused intensely during their three-month period at Y Combinator, aiming for profitability by March.
- They received advice to focus on a few users who loved their product and to do things that don't scale.
- They traveled to New York to meet and build relationships with their users, leading to increased traction.
- They pitched their company to Greg McAdoo from Sequoia Capital and received a term sheet within two weeks, raising $600,000 in seed funding.
- The speaker emphasizes the importance of perseverance and pacing oneself in the long journey of entrepreneurship.

The speaker discusses the success of Airbnb and their personal journey in entrepreneurship. They highlight the importance of choosing the right partners, starting small, and focusing on building relationships with users. Despite challenges and setbacks, they emphasize the importance of perseverance in the entrepreneurial journey.

You know, I got some emails over the last 24 hours, people saying how excited they were to come to this talk.

I want you to know I'm humbled by that, and also a little intimidated.

So I wanted to start by showing you how crazy success can be through some charts and numbers, and then maybe paint a little bit more realistic picture for what it takes.

You launch your company and in the first year you see hockey stick growth.

And for us, This is number of guests who booked through Airbnb, now cumulatively.

And pay attention to the numbers on the Y-axis as I flip through this.

So hopefully, year 2 comes along, and you keep growing, still hockey stick growth.

But then year 3, year 4, and if you're really lucky, in year 5 you still have that hockey stick.

Now what happens when you append 5 hockey sticks together?

And so it took 4 years to service our first 4000000 guests, but in the last 9 months alone, we've done another 5000000.

And Brian was fortunate enough to come to start-up school back in 2010, so 3 years ago.

Fun fact, back then, it seemed like we were a pretty big deal, but since then we've grown 73x That's just like mind-bending right like You just lose track of what that means and on any given night.

We have 150,000 people around the world staying on our accommodations.

If you are this successful, it will be the hardest thing you ever do.

Think about it in terms of the Olympics or something.

If you're going to go compete in the Olympics for gold, what would that take?

You'd probably start pretty young, and you'd work up towards that, right?

And you might go to the Olympics multiple times before you actually succeed.

And I really think that's similar to the startup journey.

So I want to tell you a little bit about our journey.

When I was 12, 1 day I was home sick from school, and I picked up a book on my dad's bookshelf.

He was an electrical engineer and a computer enthusiast, so he just happened to have a book.

I got into programming, Taught myself how to program, started publishing my work on the internet.

At the age of 14, someone saw what I was doing and called me up and said, hey, I saw your work.

I'll pay you $1,000 if you write me this program.

So I go tell my dad, I said, Dad, someone on the internet wants to pay me $1,000.

He's like, son, no one's going to pay you $1,000 on the internet.

So I write this program in like 30 days, And the guy actually pays me.

And this is the beginning of a business that I run throughout high school.

I make enough money to pay my tuition, go to college.

But more importantly, it built confidence in me.

I mean, this is going to be a long journey.

You're gonna fail more times than you succeed.

And somewhere you need to get that confidence so you persevere.

And for me, I was fortunate enough to have that at a very young age.

So I go to school, and perhaps surprisingly, coming out of school, I get a corporate job.

Well, I found myself not learning very much.

I'm gonna go to quit, and boss says, oh, you can't leave us, you're our most productive engineer.

Which I chuckled to myself, because half the time I'd been trading stocks anyways.

And So I took this as a sign, like this is a place that I wasn't learning.

And on this journey, every experience should be additive.

It should be building up to that moment, right, when you go to the Olympics.

And I found myself not being challenged there, and I had to move on.

And so I headed out west and joined a start-up.

And there I learned everything not to do, which is actually really valuable.

As soon as I joined, the 2 lead engineers quit.

I should have taken that as a warning sign.

But nonetheless, it was a good experience.

I helped take a vision, distill it to a product spec, hire a team, build a product in 9 months.

It was challenging, I worked really hard.

It didn't end the way I had hoped, but along the way, I learned a ton of stuff.

And I think back, and there's a lot of things that I've done, hobbies, projects, favors, stuff like that.

A lot of them I lost interest in, maybe they weren't successful, but thinking about it now, every 1 of those experiences helped me to be successful now.

Every 1 of those experiences prepared me for Airbnb.

And I encourage you to think about your experiences that way.

So, when I moved out to the West Coast, I needed a place to live, and so naturally I went to Craigslist, and there I met Joe and moved into Rouse Street.

Rouse Street is also where we ran the company out of for a couple years.

And living with Joe, I noticed a couple things about him.

First, we were both up late into the night working on our projects.

We'd work a long day at work, and then we'd stay up even later working on different side projects, and even on the weekend.

And it's rare that you find people with that kind of work ethic.

You know, The worst thing is to have a partner that doesn't work as hard as you.

I also noticed that Joe could do a lot of things I couldn't do.

He was a designer, and he was making beautiful physical products.

He had just an immense mind for creativity.

And we're like, wow, we got really complimentary skills.

Meanwhile, Joe knew Brian from back at the Rhode Island School of Design.

And at graduation, Joe had told Brian, someday I think we're gonna start a company together.

I'm not sure if Brian took that seriously at the time, but fast forward, and the 3 of us decided we should start a company together, that with our skill sets, we could take on anything.

And I can't stress this enough, choosing your partners has got to be maybe the most important decision you'll ever make.

Whether you know personally and love or otherwise in business.

You can't change your partners without starting over.

And so I see so many people rushing into these relationships.

I mean, you should really give that a lot of thought.

This is something that hopefully will last years.

So the question was, what are we going to do at this point?

And so Joe and Brian tell me about something that happened a couple months ago.

In October 2007, they had decided to quit their jobs to become entrepreneurs, also known as unemployed.

And at the same time, the rent on the apartment was raised, and I decided to move out.

And they didn't have enough money now to pay rent, so they had a math problem.

Well, they're both designers, and they just so happened that there was going to be an international design conference in San Francisco the following weekend.

And that on their home page for this conference, they saw that all the hotels were sold out.

So they thought to themselves, why don't we rent out that vacant room to designers who need a place to stay?

So instead of calling it a bed and breakfast, they called it an airbed and breakfast, right?

And they put up a simple WordPress blog and emailed a few designers, bloggers, who wrote about it.

And within 24 hours, 3 designers wrote to them and said they wanted to stay.

There was a 35-year-old woman from Boston, a father of 4 from Utah, and a man from India.

They were expecting guys like themselves who wanted to crash.

And here they had 3 very different people who wanted to stay.

But they had a great experience that weekend.

Not only did they have a place to stay and make $1,000, but they all went to the conference together and had a great time, so much so that the woman from Boston ended up moving to San Francisco 6 months later, and the man from India invited Joe and Brian to his wedding a couple years later.

So real relationships were formed out of this 1 weekend project.

And when we talked and thought about this, we're like, that's powerful.

Maybe we can do this for other events, other people, and so that's what we talked about, and that's what they were sort of pitching me on.

I was a little hesitant, so as the engineer amongst us, they're both designers, I was very cautious knowing that, you know, these projects, they can kind of go on and on and on, and scope creep, and you gotta be realistic about what you can accomplish.

So we talked it over a bit, and then we wanted things like verification and reviews and Facebook integration.

Like, And we wanted to do it in a month, right?

I'm like, yeah, I'm good, but not that good.

And so they finally pitched me on Airbed and Breakfast Lite, which is really the same thing, minus a couple of those fancy features.

And after a couple of beers, I agreed to do this.

And again, we were making a pretty simple site.

We had different events in our database and you could put up air beds or extra rooms in association with those events It was really directory service.

It was really just a search engine and classifieds so we cranked this out in 3 weeks and our whole goal is to launch it for South by Southwest because we had heard Twitter had launched there the year before, and we're like, that's a sign we should launch in 2008 at South by.

So we cranked this thing out, and about, I would say about 12 people put up properties, or rooms, we'll say, and Brian goes down there and actually stays on an Airbnb, and it's a great experience.

The host picks him up at the airport, brings him to the house, the guy's wife makes them both dinner, the room's all set up.

At the end of the night, the host asks Brian, do you have the money?

Because this was before we handled the transaction.

And Brian's like, oh man, I forgot to go to the ATM.

The host said, oh hey, no problem, just bring it tomorrow.

So, the next night, they're in the kitchen again, and the host says, oh, Brian, were you able to get that money?

Because this guy started thinking to himself, who is Brian, this guy I just met on the internet, who's not fulfilling his end of the bargain and paying for my hospitality.

And the hospitality basically wore off at that point.

And so reflecting on this experience, we thought to ourselves, oh man, wouldn't it be good if we could just handle the money up front so that upon arrival, the focus could be on hospitality, right?

And so this is why we later started handling the payments.

It wasn't because we wanted a business model or something.

It was all in the interest of the experience.

People also afterwards were asking us, I'm going to London, not for an event, but I still want to use your service.

And we're like, oh no, it has to be for an event, whatever.

And so we came up with a new vision, which was, why don't we make it just as easy to book someone's home as a hotel?

And we had this motto, 3 clicks to book it.

So basically, you just go to the home page, like any travel site, type in where you want to go, look through some search results, and then click into a profile.

So down at South By, Brian met Michael Seibel.

Michael, at the time, was CEO of Justin.tv, later then Socialcam, later to be acquired last year.

And Brian pitched Michael on what we were doing.

And, of course, he was pitching it, right?

And Michael was like, wow, that sounds really cool.

I know these angel investors who over dinner could write you a 50k check.

And we were super excited by this, right?

And so, the next day or next week, Michael gets the time to actually look at the website.

And then he realizes that we had actually really been pitching him like heavy.

And maybe we weren't as far along as we had made it out to be.

And so he says, I'll make those introductions, but before I do that, there's a few things you need to do.

There's a few things you need to build, progress you need to show before this is gonna be realistic.

And so, every week, Joe and Brian would head down to the offices at Justin.tv, meet with Michael, give him a progress update, try to keep him excited about what we were doing.

And, you know, things got tough around this point.

So, I at this point decided to move back to Boston.

So, I had been doing long distance with my girlfriend for 3 years and I had to obviously figure things out, did I want to get married or not?

So, I had some other priorities in my life that had suddenly come up, and I was in Boston, and suddenly the pace really slowed down, right?

And meanwhile, we got these things that we're supposed to build for Michael, and Michael's wondering, as they come in every week, man, why is it taking you so long to build these features?

Meanwhile, I'm like, guys, have you been straight with Michael and told him that I'm doing some other things than his expectations?

Because they wanted to make sure he didn't lose interest.

I tell you this story because this is real life.

Sometimes, your partnership isn't always high-fives, right?

There's a lot of stress when you're starting a company and no one's getting paid.

And you've got to work through those moments.

And Michael makes those introductions to those angel investors.

I'm still in Boston, so Joe and Brian are going to the meetings, and I would always ask, how did the meeting go?

And they're like, oh yeah, they found it really interesting.

So only later did I get the full story about what was going on.

So this 1 time, they go down to University Cafe, meet with this well-known angel investor.

And the guy has a smoothie and they're pitching him.

The guy's just drinking a smoothie, just kind of nodding his head and listening.

Halfway through it, he just gets up and leaves.

And Joe and Brian are like, did he have to use the restroom?

They like sit around for half an hour, he never comes back.

I mean, but you know, I guess, I guess we didn't have much to show at that point.

This other time, happened to coincide with 1 of my trips out, and I'm like, oh great, I get to go to 1 of these pitches finally.

And so, the night before, we're looking at the slide deck, kind of reviewing who's going to do what, and we come to this slide, right?

And it's like, how much money are we going to make 3 years from now, like in 2011 or something, right?

It's like $200 million, 3 years from now.

I'm like, oh, guys, if you do that math, that's how you break it out here, that's like 30,000 transactions per day.

They're gonna like, the BS meter's gonna go off on that.

So, I'm like, how about like 20 million, that's more realistic.

So the next day we drive down to Sand Hill, we're pitching to VC, and we come to this slide, and they had changed it to this.

Well, I don't think it actually mattered too much.

I don't think the investor was interested from the start.

But I was like, guys, come on, what is this all about?

And Brian's like, oh, I was talking to Sam Altman, and He told me that investors don't want M's, they want B's, baby.

But We hadn't connected the dots between the airbeds and the billions yet.

So, at this point, we kind of put the fundraising on hold.

And, Well, on the horizon is the Democratic National Convention coming up in Denver.

And we're reading about this event, and it's going to be held at the stadium.

We look it up, there's like only 17,000 hotel rooms in Denver.

We're like, okay, people are going to need our solution.

We use this as a basically rallying call to get focused and build that new vision we had, that 3 clicks to book it.

We hadn't really made much progress on that.

If we start now and are really focused, we can get this out in time.

We're going to handle the payments and do reviews and all that.

And so we hustle, we launch maybe a couple of weeks before the event.

We get like 800 properties on there the first week.

I mean, sure enough, the locals are looking to get out of town, make some extra money.

And sure enough, the news is doing stories like, hey, historic event, all these people want to participate, but they can't afford to, there's no place to stay, etc.

So we start writing to some local blogs saying, we actually have 800 properties that are definitely available.

You should check us out or write something.

And within a day, that's picked up by the local news, and within a day later, CNN International picks it up, and we're doing video interviews with CNN.

And it's like, whoa, yeah, this is what launching your company should be like, right?

Like a lot of attention, a lot of clicks to this website.

Yeah, but a week later, there was nothing.

And this is Paul Graham's classic diagram of a life cycle of a startup, and it's so true.

You launch your company, you get a lot of attention, you get this big spike, but it really doesn't matter because a week later, you realize that everyone's attention has moved on, you're not really relevant, who cares?

And unfortunately, that's the beginning of something called the trough of sorrow.

It's a really hard period where you work really hard and nothing you do matters.

And so basically between August and the end of the year, it was only 4 months, but it seemed like an eternity, we worked really hard, and nothing we did seemed to matter.

And at the same time, the whole financial crisis happens, right, and the markets collapse, and Sequoia sends out this presentation saying like no one's gonna be able to raise money again and you know it's time to start saving your money etc.

And we're like, oh just like on top of everything, like it was already hard enough to get investors to give us money And now this.

And it really seemed like the end of the road.

We were really asking ourselves, when do you know it's time to quit?

See all Y Combinator transcripts on Youtube

Nate Blecharczyk at Startup School 2013