Startup tips: Surviving the first year

Smash startup Airbnb had money troubles until it entered an incubator, says co-founder Nate Blecharczyk.

Airbnb co-founder and CTO, Nate Blecharczyk, says Airbnb struggled with money in its first year. Credit: Airbnb

Airbnb co-founder and CTO, Nate Blecharczyk, says Airbnb struggled with money in its first year. Credit: Airbnb

A lack of money in Airbnb’s early days didn’t stop the American startup from expanding into an international player for short-term property rentals, according to the company’s CTO and co-founder, Nate Blecharczyk.

Airbnb lets users list their apartment, house or mansion as a holiday rental and facilitates the transaction between renter and seller. The startup launched a local office in Australia in November last year after finding great success in the market.

In the six months since the local launch, Airbnb added more than 3000 listings, compared to 8200 total listings in Australia since the company’s global launch in 2008.

With a growing startup scene in Australia, Blecharczyk offered Techworld Australia several tips for surviving a dearth of funds and achieving success.

  1. Persist
    “Airbnb was founded in 2008, but by the end of that year, we had made no money and had accrued a lot of costs,” Blecharczyk told Techworld Australia.

    “Back in 2008, Airbnb was just an idea. People didn’t understand the concept, so no one would even take a second meeting with us.”

    “The best advice I can give is to pace yourself,” he said.

    “Almost nothing is successful in its first year. It’s not a sprint. It’s an endurance race and you have to treat it as such.”

  2. Focus
    Airbnb overcame its initial struggles by putting more energy into making the business successful, Blecharczyk said.

    “We were getting desperate but realised, in a lot of ways, we still hadn’t given it 100 per cent. We each had side projects and weren’t living in the same place.”

    A mentor recommended that the startup join an incubator program, Y Combinator, which ended with the startup pitching to a room full of investors, Blecharczyk said.

    “We were able to raise our initial seed round of funding, and it was during that period that we figured out how to build our business.”

  3. Be ready to pivot
    “Be flexible, and listen to your users,” said Blecharczyk.

    “There are always going to be events that you can't predict, and your successes might come in surprising ways.

    “Early on, we never considered the idea of offering professional photography until our hosts in New York told us they wanted it. We were able to quickly implement it, and it's been one of our most successful programs.

  4. Australia is an important market
    Airbnb sees Australia as a critical international market for its business.

    “Australia is one of the top markets for travellers on our website,” Blecharczyk said. “Australians are global leaders in travel and are some of the most connected, well-travelled, open-minded people in the world.”

    “Australia is ahead of the curve when it comes to embracing the sharing economy and when you look at the size of the Airbnb community to the country’s population, it’s one of the most popular places in the world.”

  5. Asia is rising
    While the US is a frequent focus for Australian startups moving abroad, some investors and big corporates have lately advised a look north to South-East Asia.

    Blecharczyk agreed Asia is worth a look. “We’ve seen a lot of growth in Asia over the past year or two, and our community across Asia is growing rapidly.

    “We know that Asia is one of the largest tourism destinations in the world, and there are several markets across Asia that are going to be major markets for Airbnb.”

Follow Adam Bender on Twitter: @WatchAdam

Follow Techworld Australia on Twitter: @Techworld_AU

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Tags startupsfundingAsiaadviceAirbnbAustraliatipsincubatorinternational

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