FINAL DESTINATION

One of the most hotly awaited tech IPOs of a generation is inching closer to reality. Airbnb CEO Brian Chesky says the company will be “ready as absolutely soon as we can.”

March 2018 could see the giant of the sharing economy sector realise a valuation of over $60 Billion USD, we take a look at the journey that Chesky and his colleagues at Airbnb have been on over the last 10 years.... from inflatable air beds to $60 Billion USD 's?

 

 

Think globally, act locally.

10 YEAR JOURNEY

$60

BILLION USD.

Airbnb show why investing in the sharing economy should be on every investors bucket list.

An industry said to be worth $335 Billion USD by 2025, the market sector that has appeared from nowhere, created some of the largest most valuable privately held businesses in history but as businesses they own nothing that they sell? With much media coverage around the likes of Spotify, Uber as well as the eagerly awaited IPO of Airbnb predicted to be March 2018 worth a staggering $60 Billion USD, if you don't know this sector by now....... don't you think it's time to learn! Watch this.......

Pssst....D'know anything about

Sharing Economy?

Whitmore Capital connected

investment network

"Creativity is intelliegence having fun."

Albert Einstein

“Pure, Unadulterated Hustle” In The Face Of Initial Resistance

As they were starting out in the summer of 2008, the founders needed a way to raise money. They bought a ton of cereal and designed special edition election-themed boxes, released that fall—Obama O’s and Cap’n McCain’s, which they sold at convention parties for $40 a box. They sold 500 boxes of each cereal, helping them to raise around $30k for Airbed & Breakfast.

Raised $30,000USD

Seed funding by selling boxes of breakfast cereal!

Still, the site did not gain much traction initially, and the founders resorted to living off of leftover Cap’n McCain’s (the Obama O’s sold out)—a time they refer to as a real “low point.”

This low point did not last for long, however, as the following spring they had dinner with Paul Graham.

Paul Graham.

Co-Founder Y Combinator

(Provided $20,000 Seed funding through Y Combinator)

 

 

Despite recognizing the startup’s potential, Graham admits to having some initial doubts, explaining “I thought the idea was crazy. … Are people really going to do this? I would never do this.” Nevertheless, Airbed & Breakfast soon joined Y Combinator’s 2009 winter class, receiving another $20,000 in funding. They renamed the business Airbnb, and soon received another $600k in a seed round from Sequoia Capital and Y Ventures.  

Not everyone was as impressed with Airbnb’s business model, however, and the young startup was also notoriously rejected by Fred Wilson and Union Square Ventures—a decision Wilson now admits wasn’t a good one.

Wilson claimed in 2011 that Union Square kept a box of Obama O’s in their conference room to remind themselves not to make the same mistake again.

It also serves as an example of an early stage startup doing everything necessary to get off the ground.

But it wasn’t just Airbnb’s business model that posed a concern. When Gebbia and Chesky—both of whom are Rhode Island School of Design alums—were initially seeking funding for their startup, potential investors didn’t know what to make of a company with two designers, despite the fact that Blecharczyk, with a solid background in tech, had already signed on as an engineer.

Chesky explains that it was hard for many in the Valley to see the company’s potential because, “they thought we just made things pretty.”

Yet it was most likely this design background that helped Airbnb to find such innovative, unexpected solutions—like the limited edition presidential cereal campaign—to the very real problems that all early stage startups face. It is this ability to innovate that informs much of Airbnb’s growth strategy.

“they thought we just made things pretty.”

Brian Chesky referring to Silicon Valley's feelings towards designers

Text

Text

Chief Product Officer Joe Gebbia

Indeed, much of Airbnb’s growth can be attributed to the fact that—despite what venture capitalists thought—people wanted the service Airbnb offered.

One way in which this is apparent is with their approach the photographs on listings. In the summer of 2009, as the company was searching for new office space, Chesky stayed exclusively in Airbnb listings in order to gather firsthand data about the service.

That same summer, Airbnb wasn’t gaining much traction in New York, so Gebbia and Chesky flew out and booked spaces with 24 hosts to figure out what the problem was. As it turned out, users weren’t doing a great job of presenting their listings.

Problem

Bad Photo's

Solution

Rent $5,000 Camera and go door to door taking photo's!

According to Gebbia, “The photos were really bad. People were using camera phones and taking Craigslist-quality pictures. Surprise! No one was booking because you couldn’t see what you were paying for.”

Their solution was low-tech but effective.

According to Chesky, “A web startup would say, ‘Let’s send emails, teach [users] professional photography, and test them. “We said, ‘Screw that.'”

Instead, they rented a $5,000 camera and went door to door, taking professional pictures of as many New York listings as possible. This approach led to two to three times as many bookings on New York listings , and by the end of the month Airbnb’s revenue in the city had doubled. What was stunting growth in New York was also stunting growth in Paris, London, Vancouver, and Miami.

This led to the Airbnb photography program, which was officially launched in the summer of 2010.

Hosts could automatically schedule a professional photographer to come and photograph their space.

Though initially only 20 photographers were contracted by Airbnb, the service became an instant hit.

Though this initiative wasn’t cheap for the cash-strapped startup, the founders felt that the long-term benefits—enhanced listings resultings from this program are two and half times more likely to be booked, and they earn their hosts an average of $1,025 per month—were well worth the cost.

By 2012, that number had grown to more than 2,000 freelance photographers employed by Airbnb to photograph 13,000 listings on six continents.

airbnb photography program official launch summer 2010

The Facts

Think globally, act locally.

 

Established 2008 - 3 x Air Mattress $80

Created Market - Charge both sides (up to 18% commission)

200,000,000 Active Users

Projected Profits of $3.2 Billion USD by 2020

Profit making business for last 12 months

15 Acquisitions since 2008

2008 - 2014 $0 - $10 Billion USD Valuation

2014 - 2017 $10 - $31 Billion USD Valuation

(Series F funding Mar 2017 - $105 USD)

 

 

In the news.

Think globally, act locally.

 

30 Nov Airbnb Just Added Its Most Asked For Feature, And Here’s How It Works

25 Oct Airbnb CEO: “We’ll Be Ready” For IPO

 

21 Apr Airbnb: The Growth Story You Didn’t Know

 

 

Our Investment

Think globally, act locally.

 

Series D - 2014

$40.71 USD p/share

 

Series F - Sept.2016/Mar.2017

$105.00 USD p/share

 

 

Reason for sale

Think globally, act locally.

 

1. Business Strategy

2. Create liquidity for unexpected acquisition

3. Create WIN, WIN, WIN Scenario

Share Allocation Available

Think globally, act locally.

 

Series D @ $40.71 USD p/share

Series F @ $105.00 USD p/share

Conditions of purchase

Think globally, act locally.

 

Series D @ $40.71 USD p/share

Minimum purchase $75,000 USD+

Series F @ $105.00 USD p/share

$25,000 USD - $74,999 USD

Expected ROI

Think globally, act locally.

 

Minimum Valuation

$50,000,000 USD = $170 USD p/share

Confidently predicting

$60,000,000 USD+ = $200 USD p/share

Think globally, act locally.

 

Why so confident?

200 million active users

Affluent User base, travellers or property owners

Revenues/Profits of $3.2 Billion USD by 2020

Trend setting brand

Positive Market outlook

 

Think globally, act locally.

 

= HEAVILY OVERSUBSCRIBED

$200+ p/share

Repeat of Ali-Baba trading frenzy

154% ROI 2014

Largest most successful IPO in history.

Think globally, act locally.

 

Series F - ROI on 250 shares = $26,250 USD Investment

BUY $105 USD - SELL $170 USD x 250 = $42,500 USD

Profit = $16,250

The numbers

Series F - ROI on 250 shares = $26,250 USD Investment

BUY $105 USD - SELL $200 USD x 250 = $50,000 USD

Profit = $23,750+++

Think globally, act locally.

 

Series D - ROI on 2000 shares = $81,420 USD Investment

BUY $40.71 USD - SELL $170 USD x 2000 = $340,000 USD

Profit = $258,580

The numbers

Series D - ROI on 2000 shares = $81,420 USD Investment

BUY $40.71 USD - SELL $200 USD x 2000 = $400,000 USD

Profit = $318,580+++

Think globally, act locally.

 

Questions?