The S1 Club's Airbnb report is here!
- $2.5B revenue YTD
- $3.4T reported TAM
- 91% of site traffic was organic
- Slowing growth (pre-c19)
H/t to @howardlindzon @packyM @itsmeeraclark @cm_brown90 @AnnikaSays @LennyIce @Stewbradley @kjlabuz + CCB.
thegeneralist.substack.com/p/airbnb-the-d…
- $2.5B revenue YTD
- $3.4T reported TAM
- 91% of site traffic was organic
- Slowing growth (pre-c19)
H/t to @howardlindzon @packyM @itsmeeraclark @cm_brown90 @AnnikaSays @LennyIce @Stewbradley @kjlabuz + CCB.
thegeneralist.substack.com/p/airbnb-the-d…
1
$ABNB in 1 minute.
- An absurdly resilient company
- Excellent management team
- Revenue down 32% YoY
- Big win for Sequoia and Founders Fund
$ABNB in 1 minute.
- An absurdly resilient company
- Excellent management team
- Revenue down 32% YoY
- Big win for Sequoia and Founders Fund
2
Number of mentions in the S-1.
- COVID-19: 215
- Connection: 203
- Belonging: 45
- Brian Chesky: 126
- Joe Gebbia: 60
- Airbnb Experiences: 15
- Resilience: 12
The story of the filing is the pandemic and $ABNB's response. That involved refocusing on values like "belonging."
Number of mentions in the S-1.
- COVID-19: 215
- Connection: 203
- Belonging: 45
- Brian Chesky: 126
- Joe Gebbia: 60
- Airbnb Experiences: 15
- Resilience: 12
The story of the filing is the pandemic and $ABNB's response. That involved refocusing on values like "belonging."
3
Origins.
Joe Gebbia wanted to pay rent. With a conference coming to SF, he thought of a crafty way to make some cash: rent air mattresses.
He wrote an email to Brian Chesky.
Origins.
Joe Gebbia wanted to pay rent. With a conference coming to SF, he thought of a crafty way to make some cash: rent air mattresses.
He wrote an email to Brian Chesky.
4
Refusal of the call.
Gebbia and Chesky didn't think they had a unicorn on their hands. Here's what Chesky told @reidhoffman:
"[W]e didn't think Air bed and breakfast would be a big idea...We thought it might be able to pay the rent until we could think of the big idea."
Refusal of the call.
Gebbia and Chesky didn't think they had a unicorn on their hands. Here's what Chesky told @reidhoffman:
"[W]e didn't think Air bed and breakfast would be a big idea...We thought it might be able to pay the rent until we could think of the big idea."
5
Struggle.
Along with third founder Nathan Blecharczyk, Gebbia and Chesky realized their first idea might be worth pursuing.
They struggled to attract customers or raise money. They only escaped credit card debt by selling novelty cereal boxes.
Struggle.
Along with third founder Nathan Blecharczyk, Gebbia and Chesky realized their first idea might be worth pursuing.
They struggled to attract customers or raise money. They only escaped credit card debt by selling novelty cereal boxes.
6
Turning point.
Paul Graham respected the ingenuity of the cereal hack. $ABNB was accepted in Y Combinator.
They took the "do things that don't scale" mantra to heart. They also changed their name from "AirBed & Breakfast" to "Airbnb."
Turning point.
Paul Graham respected the ingenuity of the cereal hack. $ABNB was accepted in Y Combinator.
They took the "do things that don't scale" mantra to heart. They also changed their name from "AirBed & Breakfast" to "Airbnb."
7
Take-off.
In the years that followed, $ABNB entered warp speed.
- Raised $4.4B in equity
- 327M nights and experiences booked
- 825M guest arrivals
- $110B earned by hosts
Take-off.
In the years that followed, $ABNB entered warp speed.
- Raised $4.4B in equity
- 327M nights and experiences booked
- 825M guest arrivals
- $110B earned by hosts
8
Market.
$ABNB makes bold claims about its potential opportunity.
- SAM: $1.5T
- TAM: $3.4T
It justifies this scale by arguing for the growth of the travel market, the opportunity to capture residential real estate spend, and the expansion of "Experiences."
Market.
$ABNB makes bold claims about its potential opportunity.
- SAM: $1.5T
- TAM: $3.4T
It justifies this scale by arguing for the growth of the travel market, the opportunity to capture residential real estate spend, and the expansion of "Experiences."
9
Geographies.
China and India are very important to $ABNB. It considers Asia Pac to be its biggest opportunity. As a % of $3.4T TAM:
- $1.5T Asia Pac (44%)
- $1.0T EMEA (29%)
- $0.7T North America (20%)
- $0.2T Latin America (5%)
Geographies.
China and India are very important to $ABNB. It considers Asia Pac to be its biggest opportunity. As a % of $3.4T TAM:
- $1.5T Asia Pac (44%)
- $1.0T EMEA (29%)
- $0.7T North America (20%)
- $0.2T Latin America (5%)
10
Product.
We're all familiar with the product. But it's worth understanding three key decisions that shaped the product.
Product.
We're all familiar with the product. But it's worth understanding three key decisions that shaped the product.
11
Professional hosts.
We talked to a pro host to understand how they operated. "Sylvia" ran 20 properties in SF, bringing in revenue of $200K/month.
Hosts like her use different tools to manage their businesses.
Professional hosts.
We talked to a pro host to understand how they operated. "Sylvia" ran 20 properties in SF, bringing in revenue of $200K/month.
Hosts like her use different tools to manage their businesses.
12
Management.
ABNB's cofounders are joined by an experienced leadership team.
- CFO: Dave Stephenson, ex-Amazon
- CTO: Aristotle Balogh, ex-Google
- Global Head of Hosting: Catherine Powell, ex-Disney
Intriguingly, Powell has extensive parks experience.
Management.
ABNB's cofounders are joined by an experienced leadership team.
- CFO: Dave Stephenson, ex-Amazon
- CTO: Aristotle Balogh, ex-Google
- Global Head of Hosting: Catherine Powell, ex-Disney
Intriguingly, Powell has extensive parks experience.
13
Investors.
The biggest shareholder is Sequoia, with 16.5% of Class B stock. Founders Fund holds 5.4%
Silver Lake and Sixth Street put in $2B of debt + equity in April at an $18B valuation. Depending on $ABNB's listing price, it may have been a clever deal.
Investors.
The biggest shareholder is Sequoia, with 16.5% of Class B stock. Founders Fund holds 5.4%
Silver Lake and Sixth Street put in $2B of debt + equity in April at an $18B valuation. Depending on $ABNB's listing price, it may have been a clever deal.
14
Financial performance.
Good news
- 91% of traffic to site was organic
- Host retention is strong
- Occasionally profitable
Bad news
- Revenue growth at just 32% pre-c19
- High operating leverage
Financial performance.
Good news
- 91% of traffic to site was organic
- Host retention is strong
- Occasionally profitable
Bad news
- Revenue growth at just 32% pre-c19
- High operating leverage
15
Competition.
Beware Booking. The company has nearly the same number of short-term rentals, and far greater inventory when hotel rooms are included.
Glenn Fogel, Booking CEO, plans to invest in pulling away US market share in the future.
Competition.
Beware Booking. The company has nearly the same number of short-term rentals, and far greater inventory when hotel rooms are included.
Glenn Fogel, Booking CEO, plans to invest in pulling away US market share in the future.
There's lots more in the briefing, available for free.
- The full effect of Covid-19
- Deeper financial analysis
- The insurgents that might displace $ABNB
Check it out, here.
thegeneralist.substack.com/p/airbnb-the-d…
- The full effect of Covid-19
- Deeper financial analysis
- The insurgents that might displace $ABNB
Check it out, here.
thegeneralist.substack.com/p/airbnb-the-d…
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