If you would like to see a collage of money making ingenuity that inspires, be sure to visit the Air Bed & Breakfast website at www.airbnb.com. There you will find how people are using extra space to their extreme advantage. Perusing listings in London you might come across “The Man with a Van” who opens his van up to sleep over guests for £15 a night. In Illinois you might find Daniel Alexander’s listing for his back yard tree house. For just $195 a night, up to 2 people can spend a comfortable time sleeping under the stars. All the basic amenities are included. And don’t forget the west coast. If you do a search for California’s silicon valley, you may see John Potter’s $46 a night listing for a tent. Think that’s too expensive? You can travel to the skid row area of San Pedro and enjoy an overnight tent stay in an alley for just $10.
Of course there are listings for houses and apartments, but it’s important to understand the diversity that’s available through Air Bed & Breakfast. If you are venturing north enough you can even book a stay for an igloo! Air Bed & Breakfast’s business model is not just one of those anomalies that could only exist in America, it’s taken the globe by storm. Virtually any city in the free world has multiple listings, providing discounted convenience to the consummate traveler.
So how did this whole thing get started? It happened one day when roommates Joe Gebbia and Brian Chesky had trouble coming up with their rent money. They heard that there was a convention in town and knew that all the surrounding hotels would be quickly booked. So after throwing up a website and getting the word out, Joe and Brian were able to host two guests for a week on air beds in their living room. Well, on top of being able to pay rent that month, they knew they were onto something. Soon after their initial success, they began scheduling short stays for convention attendees throughout the west coast. When the Democratic National Convention came to California in 2008, Joe and Brian had their big breakthrough with hundreds of people suddenly booking through their website. However, this spike was short-lived and when the convention was over they were both back to eating ramen.
After a lot of brainstorming, the two decided on a plan to get funding. They did this by masterfully creating serial boxes with the name “Obamaos” on the front. Then they filled them with Cherios and sold their limited edition product on eBay for around $46 a box. This idea brought in $20,000 to fund Joe and Brian’s operations and it also got their business A LOT of attention. News outlets and blogs began covering their story and best of all, they got help from an angel investor who saw their company’s potential. With the necessary building blocks in place and the addition of a third partner to the team, Air Bed & Breakfast began making its fabled ascent into connecting the world on a practical level.
People who learn about the company’s success no doubt have trouble believing how such a business model could exist. After all, if people’s personalities and backgrounds span the gamut, there must be some pretty bad encounters. The fact is that there are problems every now and then but they rare because the company asks guests to rate the hosts and vice versa. It’s almost like guests and hosts are on their best behavior so they can take advantage of the service in the future. I believe that after the coming economic crash, hosts will be even more accommodating in order to save their homes from foreclosure. Conversely, guests will become infinitely more polite since they won’t have jobs. Not being able to afford the high rates of hotels, their alternative will be sleeping on the streets.
As we come into hard economic times, you will have the opportunity to thrive if you own property and take advantage of Air Bed & Breakfast’s system. Notice how I haven’t mentioned the traditional model of directly renting out your home to a tenant on a monthly basis. There are passive income gurus out there that will throw this into a blog or a book without knowing the problems associated with being a landlord. I’m friends with someone who has just finished remodeling her rental home for the second time. It turns out that her tenant’s boyfriend destroyed the interior on a jealousy binge and the rent deposit covered only 20% of the damages. To make things worse, the tenant lost her job and wasn’t able to pay rent for 2 months. If something like this were to happen through Air Bed & Breakfast, your damages would be covered through their insurance guarantee.