Converting good strategic thinking into action can be a challenge: examine how Airbnb has achieved this by considering the elements seen in Section 1.3.3. A unicorn is a mythical animal that is very rare, difficult to tame, and often referred to by the US venture capital industry to describe a start-up company whose valuation exceeds $1bn dollars. For instance, Airbnb, founded in 2007, and valued at $38bn in 2018, is the most valuable

‘unicorn’, and a symbol of the sharing economy.1 How could this start-up become so successful, so fast, and is it sustainable?

Origins The founders of Airbnb, Joe Gebbia and Brian Chesky, first met at Rhode Island School of Design. Five years later, both aged 27, they were struggling to pay their rent when a design conference came to San Francisco. All the hotels were fully booked, so they set up a simple website with pictures of their loft-turned-lodging space – complete with three air mattresses on the floor and the promise of a home-cooked breakfast in the morning. This site got them their first three paying guests at $80 each. They realised it could be the start of something big. Both wanted to be entrepreneurs and Brian already had some experience with designing a product and website.2 They created a website: airbedandbreakfast.com.

Targeting conferences and festivals across America they got local people to list their rooms on the website.

When, in 2008, Barack Obama was to speak in Denver at the Democratic Party National Convention where 80,000 people were expected to attend, Joe and Brian thought there would be a hotel room shortage. They recorded 800 listings in one week. However it did not make any money.

To survive they had to make use of their entrepreneurial skills, buying cereal in bulk and designing packaging such as ‘Obama’s O’s’ and ‘Cap’n McCain’ cereal, jokey references to the two Presidential candidates of the year. However, adding a payment facility to their website allowed them to charge up to 15 per cent of the booking (host pays 3 per cent; traveller 6–12 per cent). By April 2009 they were breaking even.