David here.
On Thursday, rental marketplace Airbnb (NASDAQ: ABNB) made its debut in what was one of the year’s most anticipated public offerings.
They opened their first day trading at $146 per share, and its valuation surged to just over $100 billion. (For context, Airbnb had an expected valuation of $47 billion going into their IPO.)
Airbnb’s mega-successful debut makes it the biggest IPO in the United States.
What started as just a couple of roommates renting out air mattresses in their apartment has now become one of the country’s most powerful publicly traded tech companies.
Their success today is the culmination of Airbnb’s years of hard work as a startup, including an incredible comeback in the wake of COVID-19.
In other words, Airbnb played the startup game correctly, and every other startup should take notes. And as startup investors ourselves, we should always be on the lookout for companies with their kind of drive.
By the way… Airbnb isn’t the only stock making waves these days.
There are five other tech stocks out there expected to create over $350 billion in wealth over just the next 18 months. Learn all the moves you need to play this market run by clicking here.
(You need to get all of these details quickly, though. You’ll only be able to score a discount for the next four days.)
Here’s exactly what Airbnb did right… way before they hit the public stage.
(The average rent in 2007 was around $1,700… but it’s since climbed to just over $3,000).
Looking for a way to make a couple of extra bucks, the pair decided to capitalize on the fact that there were no available hotel rooms for an upcoming conference in the city.
They built a simple site called “Air Bed and Breakfast” to offer conference-goers a place to sleep for $80 per night. A little while later, Nathan Blecharczyk joined the team, and Airbnb was born.
Now, Airbnb’s launch story is definitely unconventional. But in the end, they solved two major problems with unique solutions…
Not to mention, Airbnb literally created the idea of homesharing. They succeeded even when there was really no example to work from… a risky move by any measure that worked out in their favor.
But it wasn’t always easy…
In the summer of 2008, they did just that.
With their design background, the team designed special edition cereal boxes to release during the Democratic National Convention that year. They named their cereals “Obama-O’s” and “Cap’N McCain’s,” and they ended up raising around $30,000 for the company.
They then joined the Y Combinator and earned $20,000 in funding. A little while later, they completed a $600,000 seed round, and Airbnb took off.
By 2014, the Airbnb platform had over 550,000 property listings around the world with over 10 million guests. Their valuation at that time was $10 billion… more than leading hotel companies like Hyatt and Wyndham.
Two years later, they raised $1 billion in a Series F funding round, which brought the company to a $31 billion valuation. Airbnb continued to ride that success straight through to this year… but they hit a major bump in the road.
There’s no example greater than their performance in 2020.
COVID-19 hit the company hard as the pandemic froze travel… and Airbnb laid off 1,900 employees (around 25% of its entire workforce). Brian Chesky wrote a note to his employees stating that he would help them all find a new place to work.
At the time, Brian anticipated that Airbnb’s 2020 revenue would be less than half of what it was in 2019. The company’s valuation also dropped by 16%, going from $31 billion to $26 billion.
Ultimately, the company saw a 90% drop in bookings over the first three months of the pandemic, as well as $400 million in losses.
But over the summer, things changed. People who wanted to leave their houses turned to Airbnb listings as a safer alternative to travel… and the company made a major comeback.
They even achieved profitability in Q3 2020, and their success toward the end of the year was what fueled them to such a high profile public offering.
When I’m choosing where to put my own money, I always look for companies with Airbnb’s dedication and drive. And over at the Angels & Entrepreneurs Network, my colleagues and I have recommended a few startups that we believe have a shot at Airbnb’s kind of success.
Considering just how hot the tech market is these days, I doubt it’ll be long before we see even more future unicorns hit the stage. But in the meantime, if you’re looking for the five best stocks to consider buying right now… check this out.
I’ll be back soon with another update.
Very best,
David Weisburd
On Thursday, rental marketplace Airbnb (NASDAQ: ABNB) made its debut in what was one of the year’s most anticipated public offerings.
They opened their first day trading at $146 per share, and its valuation surged to just over $100 billion. (For context, Airbnb had an expected valuation of $47 billion going into their IPO.)
Airbnb’s mega-successful debut makes it the biggest IPO in the United States.
What started as just a couple of roommates renting out air mattresses in their apartment has now become one of the country’s most powerful publicly traded tech companies.
Their success today is the culmination of Airbnb’s years of hard work as a startup, including an incredible comeback in the wake of COVID-19.
In other words, Airbnb played the startup game correctly, and every other startup should take notes. And as startup investors ourselves, we should always be on the lookout for companies with their kind of drive.
By the way… Airbnb isn’t the only stock making waves these days.
There are five other tech stocks out there expected to create over $350 billion in wealth over just the next 18 months. Learn all the moves you need to play this market run by clicking here.
(You need to get all of these details quickly, though. You’ll only be able to score a discount for the next four days.)
Here’s exactly what Airbnb did right… way before they hit the public stage.
1. They solved a big problem with a unique solution.
Airbnb was founded in 2007 by roommates Brian Chesky and Joe Gabbia. They had just moved to San Francisco, where rent prices were absurdly high.(The average rent in 2007 was around $1,700… but it’s since climbed to just over $3,000).
Looking for a way to make a couple of extra bucks, the pair decided to capitalize on the fact that there were no available hotel rooms for an upcoming conference in the city.
They built a simple site called “Air Bed and Breakfast” to offer conference-goers a place to sleep for $80 per night. A little while later, Nathan Blecharczyk joined the team, and Airbnb was born.
Now, Airbnb’s launch story is definitely unconventional. But in the end, they solved two major problems with unique solutions…
- Finding an affordable place to stay in cities with expensive rental markets.
- Allowing people to supplement their income by listing their properties on the platform.
Not to mention, Airbnb literally created the idea of homesharing. They succeeded even when there was really no example to work from… a risky move by any measure that worked out in their favor.
But it wasn’t always easy…
2. They did whatever they could to grow their company.
In the earlier days of their venture, times were tough. It took a few years for Airbnb to gain any kind of traction, and the founding team had to think outside the box on how to raise money in their earliest days.In the summer of 2008, they did just that.
With their design background, the team designed special edition cereal boxes to release during the Democratic National Convention that year. They named their cereals “Obama-O’s” and “Cap’N McCain’s,” and they ended up raising around $30,000 for the company.
They then joined the Y Combinator and earned $20,000 in funding. A little while later, they completed a $600,000 seed round, and Airbnb took off.
By 2014, the Airbnb platform had over 550,000 property listings around the world with over 10 million guests. Their valuation at that time was $10 billion… more than leading hotel companies like Hyatt and Wyndham.
Two years later, they raised $1 billion in a Series F funding round, which brought the company to a $31 billion valuation. Airbnb continued to ride that success straight through to this year… but they hit a major bump in the road.
3. They made an incredible comeback in the face of economic downturn.
Airbnb was founded right before the 2008 Great Recession. They’ve been through hard economic times before, and they’ve always come out stronger on the other side.There’s no example greater than their performance in 2020.
COVID-19 hit the company hard as the pandemic froze travel… and Airbnb laid off 1,900 employees (around 25% of its entire workforce). Brian Chesky wrote a note to his employees stating that he would help them all find a new place to work.
At the time, Brian anticipated that Airbnb’s 2020 revenue would be less than half of what it was in 2019. The company’s valuation also dropped by 16%, going from $31 billion to $26 billion.
Ultimately, the company saw a 90% drop in bookings over the first three months of the pandemic, as well as $400 million in losses.
But over the summer, things changed. People who wanted to leave their houses turned to Airbnb listings as a safer alternative to travel… and the company made a major comeback.
They even achieved profitability in Q3 2020, and their success toward the end of the year was what fueled them to such a high profile public offering.
When I’m choosing where to put my own money, I always look for companies with Airbnb’s dedication and drive. And over at the Angels & Entrepreneurs Network, my colleagues and I have recommended a few startups that we believe have a shot at Airbnb’s kind of success.
Considering just how hot the tech market is these days, I doubt it’ll be long before we see even more future unicorns hit the stage. But in the meantime, if you’re looking for the five best stocks to consider buying right now… check this out.
I’ll be back soon with another update.
Very best,
David Weisburd
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Because!” WELCOMEING your angelablity today tommrow AND FOREVER?” Truth! Investing Angel
Great article!
1- However in 2008 they were renting their room $80/night, or $2,400/month compared to $1,700 that they were paying.
2- in 2020, a room is rented for a month with Airbnb at $1,500.
My question is: how “Airbnb solved a big problem”?
Hi Lydie,
Thanks for your question!
I think in this case, it’s a two-fold problem solve.
On one hand, people can rent out Airbnbs in cities where the cost of living is tremendous. If a room on Airbnb is $1,500/month, that’s still about half of what the average monthly rent in a city like San Francisco is (it’s around $3,000 this year!). And on the other hand, it allows people living in those expensive cities to pay their own rent easier by renting out rooms for Airbnb. Kind of a big win-win for both renters and homeowners!
Ultimately, it’s disrupting the rental and hotel markets in massive ways!
I hope this helps!
Best,
Sarah
Hi Sarah, and thanks for your feedback.
You made the point that currently in 2020, a room in SF costs $3,000 compared to $2,400 when the founders started renting their air mattress…Beyond any commentary, I admire their business idea. In my opinion, Airbnb founders saw a GREAT Opportunity (gap) and build up their strong bridge between hotel and residential stay. Kudos to them. A great opportunity is not necessarily solving a big problem.
The social downside is that it is becoming almost impossible to have a family member, or friend stay at one’s place for free. A little bit like Uber. Nobody is given a free ride anymore.